Legislature(2017 - 2018)HOUSE FINANCE 519

05/13/2017 01:15 PM FINANCE

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01:19:36 PM Start
01:20:37 PM SB23
02:00:07 PM Public Testimony
02:59:20 PM Adjourn
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+ SB 23 APPROP: CAPITAL BUDGET TELECONFERENCED
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CS FOR SENATE BILL NO. 23(FIN) am                                                                                             
                                                                                                                                
     "An  Act   making  appropriations,   including  capital                                                                    
     appropriations,       supplemental      appropriations,                                                                    
     reappropriations,  and  other appropriations;  amending                                                                    
     appropriations;  making  appropriations  to  capitalize                                                                    
     funds; and providing for an effective date."                                                                               
                                                                                                                                
1:20:37 PM                                                                                                                    
                                                                                                                                
PAUL LABOLLE,  STAFF, REPRESENTATIVE NEAL  FOSTER, addressed                                                                    
the changes from the governor's  proposed capital budget and                                                                    
the  Senate version  of  the legislation.  He  read from  an                                                                    
explanation of changes:                                                                                                         
                                                                                                                                
     Section  1, Pages  2-9:  Agency capital  appropriations                                                                    
     proposed  by the  Governor and  amended  by the  Senate                                                                    
     Finance Committee                                                                                                          
                                                                                                                                
     Changes:                                                                                                                   
     Page   2,   lines   24-25  Adds   language   that   the                                                                    
     appropriation  to  the  Alaska Energy  Authority-  Bulk                                                                    
     Fuel  Program is  conditional  upon receiving  matching                                                                    
     federal funds.                                                                                                             
                                                                                                                                
     Appropriation  are made  from  the  Cruise ship  Vessel                                                                    
     Passenger Tax as follows:                                                                                                  
                                                                                                                                
     Page 2 lines 26 -30                                                                                                        
     The  Alaska  Railroad  Corporation for:  Seward  Cruise                                                                    
     Ship  Dock  Terminal   Planning  and  Design  $300,000,                                                                    
     Seward Dock Safety Enhancements $1,200,000                                                                                 
                                                                                                                                
     Page 3 Lines 11-16                                                                                                         
     The Hoonah Dock Company                                                                                                    
     Inner  Point Sophia  Phase I,  New  Dock Mooring  Buoys                                                                    
     $2,000,000                                                                                                                 
     Outer Point Sophia Dock Safety Improvements $500,000                                                                       
                                                                                                                                
     Page 4 Lines 4-5                                                                                                           
     City of Ketchikan                                                                                                          
     Cruise Ship Berth 4 Dock Expansion $2,000,000                                                                              
                                                                                                                                
     Available   funding  from   the   Cruise  Ship   Vessel                                                                    
     Passenger Tax  Account totals  $7.5 million.  The above                                                                    
     projects total $6 million.                                                                                                 
                                                                                                                                
Representative Wilson requested that Mr. Labolle slow down                                                                      
his explanation.                                                                                                                
                                                                                                                                
Mr. Labolle complied. He continued reading from an                                                                              
explanation of changes:                                                                                                         
                                                                                                                                
     Page 3  lines 20-24.  Reduces the appropriation  to the                                                                    
     Inter- Island Ferry Authority  by ($135,000)-There is a                                                                    
     Reappropriation   in   section  37   backfilling   this                                                                    
     reduction. Total appropriation $250,000                                                                                    
                                                                                                                                
     Page   3  line   25-27   Marine   Exchange  of   Alaska                                                                    
     appropriation is  reduced from  $600,000 to  $400,000 -                                                                    
     In line with FY17 funding level                                                                                            
                                                                                                                                
     Page  3  Line 30  -  Page  4  Line 3  Anchorage  Police                                                                    
     Department  for Patrol  of the  Seward Highway  between                                                                    
     Anchorage and  Indian.  $200,000. Adds  intent language                                                                    
     that the municipality and  the department coordinate on                                                                    
     patrol of the Seward highway                                                                                               
                                                                                                                                
     Page  5 lines  4-5 $20  million appropriation  from the                                                                    
     Alaska  Capital  Income  Fund  to  the  Office  of  the                                                                    
     Governor for  state-wide agency deferred  maintenance -                                                                    
     carry's out the intent of SB 107                                                                                           
                                                                                                                                
1:24:20 PM                                                                                                                    
                                                                                                                                
Mr. Labolle continued to read from an explanation of                                                                            
changes:                                                                                                                        
                                                                                                                                
     Page 5  lines 6-8  Intent language  that the  Office of                                                                    
     the Governor prioritize  deferred maintenance needs and                                                                    
     distribute the  funds to  address the  highest priority                                                                    
     issues                                                                                                                     
                                                                                                                                
     Page 6  lines 32-33  Alaska Permanent  Fund Corporation                                                                    
     Headquarters Renovation $4,050,000 APFC receipts                                                                           
                                                                                                                                
     Page 7 lines 19-20  Alaska Housing Finance Corporation-                                                                    
     Supplemental Housing  Development Program  -reduced the                                                                    
     appropriation from  $3 million to $2.25  million - this                                                                    
     was the FY17 funding level                                                                                                 
                                                                                                                                
Representative Guttenberg  asked Mr. Labolle to  restate the                                                                    
line reference.                                                                                                                 
                                                                                                                                
Mr.  Labolle  answered page  7,  line  19. He  continued  to                                                                    
discuss the changes:                                                                                                            
                                                                                                                                
     Page   7,   lines   21-22:   Alaska   Housing   Finance                                                                    
     Corporation   Teacher,   Health   and   Public   safety                                                                    
     Professionals  Housing reduced  the appropriation  from                                                                    
     $1.750 million to $1 million - FY17 funding level                                                                          
                                                                                                                                
     Page 7,  lines 31-33: AMHS Vessel  Overhaul the funding                                                                    
     source  was  switched  from  General  Funds  to  Marine                                                                    
     Highway  Vessel Replacement  Funds  and  reduced by  $1                                                                    
     million                                                                                                                    
                                                                                                                                
Representative  Wilson  asked  Mr. Labolle  to  restate  the                                                                    
location of  the change. Mr.  Labolle answered page  7, line                                                                    
31.                                                                                                                             
                                                                                                                                
Representative Wilson  asked for verification  the reduction                                                                    
had been $1 million.                                                                                                            
                                                                                                                                
Mr. Labolle replied  that the increment had  been reduced by                                                                    
$1 million and there was  a fund source change. He continued                                                                    
to address changes:                                                                                                             
                                                                                                                                
     Page 8,  lines 4-5. Reduced State  Equipment Fleet from                                                                    
     $15 million to $12.5 million                                                                                               
                                                                                                                                
     Page  8, line  13: Reduced  Federal Program  Match from                                                                    
     $58  million to  $12  Million, this  is also  reflected                                                                    
     same page line 10.                                                                                                         
     Page 8, lines 15-17:  Inserted language relating to the                                                                    
     re-appropriation  found  in  the language  Section  for                                                                    
     Federal-Aid Highway State  Match totaling $41.1 million                                                                    
     - providing  total match of $55.2  million (a reduction                                                                    
     of $2.8 million from $58 million)                                                                                          
                                                                                                                                
     Page 9,  lines11-12: Added $5  million from  the Alaska                                                                    
     Capitol  Income Fund  to the  University of  Alaska for                                                                    
     Deferred Maintenance                                                                                                       
                                                                                                                                
     Items removed  from the Governor's requested  budget in                                                                    
     Section 1:                                                                                                                 
                                                                                                                                
     The  appropriation to  the Life  Alaska Donor  Services                                                                    
     because  this   has  already   been  included   in  the                                                                    
     Operating Budget, $80,000 receipts                                                                                         
                                                                                                                                
     Public   and  Community   Transportation  State   Match                                                                    
     $1,000,000                                                                                                                 
                                                                                                                                
1:27:30 PM                                                                                                                    
                                                                                                                                
Co-Chair Seaton asked  for the page and  line reference. Mr.                                                                    
Labolle answered the items no  longer appeared in the bill -                                                                    
they  had  been in  the  governor's  version, but  had  been                                                                    
removed by the Senate.                                                                                                          
                                                                                                                                
Co-Chair Seaton asked for a repeat of the information.                                                                          
                                                                                                                                
Mr.  Labolle  detailed  that  the  $80,000  agency  receipts                                                                    
appropriation  to the  Life Alaska  Donor Services  had been                                                                    
moved to  the operating  budget because  it was  a recurring                                                                    
expenditure.                                                                                                                    
                                                                                                                                
Representative Guttenberg  requested a copy of  the items no                                                                    
longer in the budget.                                                                                                           
                                                                                                                                
Co-Chair Foster  replied that his  office would  provide the                                                                    
information.                                                                                                                    
                                                                                                                                
Mr.  Labolle  elaborated  that the  second  item  no  longer                                                                    
appearing  in Section  1 (that  had been  in the  governor's                                                                    
request) was  the public and community  transportation state                                                                    
match of $1 million.                                                                                                            
                                                                                                                                
Representative Wilson  asked if  there were any  other funds                                                                    
in  operating or  capital budgets  related  to the  matching                                                                    
funds.                                                                                                                          
                                                                                                                                
Mr. Labolle answered for the  match it was the only funding.                                                                    
He  added  it   was  funding  provided  by   the  states  to                                                                    
communities to make their own federal match.                                                                                    
                                                                                                                                
     Sec. 2 Pages  10-12: The breakout of  funding by agency                                                                    
     for the appropriations made in section 1                                                                                   
                                                                                                                                
     Sec.  3  Pages  13  & 14:  The  breakout  of  statewide                                                                    
     funding for the appropriations made in section 1.                                                                          
                                                                                                                                
     Sec. 4 page 15 &  16: Supplemental capital projects and                                                                    
     grants.                                                                                                                    
                                                                                                                                
Mr.   Labolle   noted    that   the   supplemental   capital                                                                    
appropriations had been a separate  bill, but the Senate had                                                                    
rolled the items into the capital budget.                                                                                       
                                                                                                                                
1:29:52 PM                                                                                                                    
                                                                                                                                
Mr.  Labolle  continued  to  read  from  an  explanation  of                                                                    
changes:                                                                                                                        
                                                                                                                                
     Items  not included  from  the Governor's  Supplemental                                                                    
     Capital request:                                                                                                           
                                                                                                                                
     Reappropriation  from the  Fairbanks University  Avenue                                                                    
     Project:                                                                                                                   
     Arctic Strategic  Transportation and  Resources Project                                                                    
     - $7,798,000                                                                                                               
                                                                                                                                
     Reappropriation from the Juneau Access Project:                                                                            
     Transportation  Infrastructure  Enhancement in  Greater                                                                    
     Lynn Canal $34,140,100                                                                                                     
                                                                                                                                
Representative   Guttenberg  asked   for  verification   the                                                                    
increment  related  to  Fairbanks,  University  Avenue.  Mr.                                                                    
Labolle answered in the affirmative.                                                                                            
                                                                                                                                
Representative Wilson asked for a repeat of the last item.                                                                      
                                                                                                                                
Mr.   Labolle    answered   "transportation   infrastructure                                                                    
enhancement in Greater Lynn Canal."  He detailed that in the                                                                    
governor's  request, Juneau  Access Project  funds had  been                                                                    
reappropriated to the infrastructure enhancement in Lynn                                                                        
Canal and ferry construction, which had been removed by the                                                                     
Senate. He continued to address changes in the bill:                                                                            
                                                                                                                                
     Sec. 5 page  16: The breakout of funding  by agency for                                                                    
     the appropriations made in section 4.                                                                                      
                                                                                                                                
     Sec. 6 page  17: The breakout of  statewide funding for                                                                    
     the appropriations made in section 4                                                                                       
                                                                                                                                
     Sec.  7  pages   18-38:  supplemental  operating  items                                                                    
     proposed by the                                                                                                            
     Governor by Department, set out in Sec. 8.                                                                                 
                                                                                                                                
     Sec. 8 pages  39-44: The breakout of  funding by agency                                                                    
     for the appropriations made in section 7                                                                                   
                                                                                                                                
1:31:18 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster asked for page numbers for Section 8.                                                                           
                                                                                                                                
Mr. Labolle answered that Section 8 was located on pages 39                                                                     
through 44; Section 9 was located on pages 45 through 47.                                                                       
                                                                                                                                
     Sections   10-19  are   primarily  Governor's   request                                                                    
     supplemental language sections as follows:                                                                                 
                                                                                                                                
     Sec.  10   (a)  page  48,  lines   1-6.  Department  of                                                                    
     Administration  -   labor  contract   negotiations  and                                                                    
     arbitration   support   $792,000-extends   lapse   date                                                                    
     through FY18                                                                                                               
                                                                                                                                
     Sec. 10 (b) Page 48  Lines 7- 11. Reappropriation of $3                                                                    
     million from  the Department  of Public  Safety Academy                                                                    
     driver   training   facility,  land   acquisition   and                                                                    
     construction for the Alaska Land Mobile Radio System                                                                       
                                                                                                                                
     Sec. 11  page 48,  line 12-16. Department  of Commerce,                                                                    
     Community, and Economic  Development - Appropriation of                                                                    
     $630,000  of  Federal  Receipts   to  the  Division  of                                                                    
     Insurance  for  the  health insurance  enforcement  and                                                                    
     consumer protection grant for  Fiscal years 17, 18, and                                                                    
     19.                                                                                                                        
                                                                                                                                
1:33:03 PM                                                                                                                    
                                                                                                                                
Mr. Labolle addressed Sections 12 through 15:                                                                                   
                                                                                                                                
     Sec.   12  page   48,   lines   17-21.  Department   of                                                                    
     Environmental  Conservation   -Appropriation  from  the                                                                    
     general  fund for  $5,740,000 to  fulfill the  terms of                                                                    
     the Settlement  in State v. Williams  Alaska Petroleum,                                                                    
     Inc. -  also referred  to as  the Flint  Hills refinery                                                                    
     settlement                                                                                                                 
                                                                                                                                
     Sec. 13 (a)  page 48, line 22-27.  Department of Health                                                                    
     and Social  Services -  Medicaid language  necessary to                                                                    
     cover potential program shortfall for FY17                                                                                 
     (b)  Lines 28-30.  Federal  Receipt  authority for  the                                                                    
     Medicaid program of $238,500,000 for FY17.                                                                                 
                                                                                                                                
     Sec. 14 page  48, line 31- page 49,  line 5. Department                                                                    
     of  Labor and  Workforce Development  - Reappropriation                                                                    
     to  the  Department  in  the  amount  of  $213,155  for                                                                    
     deferred maintenance, renewal, repair, and equipment                                                                       
                                                                                                                                
     Sec. 15  page 49, lines  6-29.  Department of  Law- (a)                                                                    
     Judgements   and  settlements   broken  out   -  total:                                                                    
     $228,671 (Language for  Planned Parenthood Judgment was                                                                    
     removed)  that   language  is  "The   necessary,  after                                                                    
     application of  the amount appropriated in  (a) of this                                                                    
     section, to pay judgments  awarded against the state on                                                                    
     or  before  June 30,  2017,  is  appropriated from  the                                                                    
     general fund to the  Department of Law, civil division,                                                                    
     deputy attorney  general's office,  for the  purpose of                                                                    
     paying judgments against the  state for the fiscal year                                                                    
     ending June  30, 2017" (c)  Line 21: (c)  extends lapse                                                                    
     provision   to   include   FY18  and   FY19   for   the                                                                    
     reappropriation  of $2,000,000  to  the Department  for                                                                    
     outside counsel  and experts and for  the state's share                                                                    
     of  interim remedial  actions  to  protect the  health,                                                                    
     safety, and  welfare of  the people  in the  North Pole                                                                    
     area for FY14-19  (simply added fiscal year  19 to this                                                                    
     language)                                                                                                                  
                                                                                                                                
1:35:18 PM                                                                                                                    
                                                                                                                                
Mr. Labolle moved to Section 16:                                                                                                
                                                                                                                                
     Sec.  16  page  49,  line  30  -  page  50  -  line  3.                                                                    
     Department  of Transportation  and Public  Facilities -                                                                    
     $5,500,000  appropriation  from  the General  Fund  for                                                                    
     fulfilling the  terms of  the signed  consent agreement                                                                    
     and final  order with  the United  States Environmental                                                                    
     Protection  Agency  regarding the  decommissioning  and                                                                    
     remediation  of  Class  V   injection  wells  (this  is                                                                    
     reduced from $8  million at $5.5 million  is the amount                                                                    
     needed for FY17 and FY18)                                                                                                  
                                                                                                                                
     Sec. 17 page 50,  lines 4 - 31 - Page 51  Lines 1 - 17.                                                                    
     Debt  and Other  Obligations -  subsection (a)  reduces                                                                    
     the  amount for  early  redemption on  debt related  to                                                                    
     international   airport   revenue  bonds   (about   $21                                                                    
     million)  Sec 17  (b)  Page 50,  line  26: reduces  the                                                                    
     amount  for debt  service on  Goose Creek  Correctional                                                                    
     Center  by  $655,500  due to  savings  associated  with                                                                    
     refinancing                                                                                                                
     Sec. 17 (c)  Page 51 Line 3:  appropriates $745,000 for                                                                    
     the   costs   associated    with   issuing   previously                                                                    
     authorized  GO  Bonds.  ($3 million  for  this  purpose                                                                    
     lapsed at the end of FY16)                                                                                                 
     Sec. 17 (d) Page 51 Line  7 If federal receipts are not                                                                    
     sufficient   to  cover   international  airports,   the                                                                    
     deficient  amount would  be borrowed  from the  General                                                                    
     Fund                                                                                                                       
     Sec. 17 (e)  Page 51 line 13: Allows  for the repayment                                                                    
     in (d) if  necessary (d) and are necessary  as a result                                                                    
     of IRIS functionality                                                                                                      
                                                                                                                                
1:37:17 PM                                                                                                                    
                                                                                                                                
Mr. Labolle moved to Sections 18 through 23:                                                                                    
                                                                                                                                
     Sec.  18 page  51, lines  18-22. Fund  Capitalization -                                                                    
     (a) $3,000,000  is appropriated  from the  General Fund                                                                    
     to the Disaster Relief Fund                                                                                                
     Sec 18  (b) Line 20: $288,000,000  is appropriated from                                                                    
     the  Statutory Reserve  Fund  to the  oil  and gas  tax                                                                    
     credit fund to pay  outstanding tax credit liabilities-                                                                    
     this is new added by the Senate                                                                                            
                                                                                                                                
     Sec.  19 page  51,  lines 23  - Page  52  Line 3:  Fund                                                                    
     Transfer-   Revises  the   date   and   amount  to   be                                                                    
     transferred   to  the   oil  and   hazardous  substance                                                                    
     prevention account  in the oil and  hazardous substance                                                                    
     prevention and  response fund  - Change  is on  page 52                                                                    
     lines 1 and 2 subsection (3)                                                                                               
                                                                                                                                
     Sec. 20 page 52, lines  4-12. Federal and Other Program                                                                    
     Receipts - Standard  Federal receipt authority language                                                                    
     for  agency's  to  receive Federal  and  other  receipt                                                                    
     authority from Legislative Budget and Audit                                                                                
                                                                                                                                
     Sec.  21  page  52,  lines 13-17.  Insurance  Claims  -                                                                    
     amounts  to  be  received in  settlement  of  insurance                                                                    
     claims are  appropriated to the  general fund  from the                                                                    
     (1) State insurance catastrophe  reserve account or (2)                                                                    
     appropriate state agency to mitigate the loss.                                                                             
                                                                                                                                
     Sec.  22  page  52,  lines  18-28.  National  Petroleum                                                                    
     Reserve  -  Alaska  Impact Grant  appropriated  to  the                                                                    
     Department   of  Commerce,   Community,  and   Economic                                                                    
     development for capital project  grants under the NPR-A                                                                    
     impact   grant  program.   This  year's   grants  total                                                                    
     $1,378,346  and  will be  distributed  to  the City  of                                                                    
     Barrow, City  of Wainwright, and the  City of Anaktuvuk                                                                    
     Pass.                                                                                                                      
                                                                                                                                
     Sec. 23  Page 53,  line 29  - Page  53, line  3: Alaska                                                                    
     Housing Finance  Corporation [AHFC]  - Amends  the FY18                                                                    
     Operating  Budget reducing  the AHFC  dividend that  is                                                                    
     deposited  into the  General Fund  by  the capital  and                                                                    
     operating  operations that  are  made in  FY18 using  a                                                                    
     portion of the AHFC dividend                                                                                               
                                                                                                                                
Mr.  Labolle  elaborated  that  the  change  to  Section  23                                                                    
essentially allowed  AHFC to retain  a part of  the dividend                                                                    
it paid the state for  internal capital projects rather than                                                                    
sending  the  state  the  entire   dividend  and  making  an                                                                    
appropriation back to AHFC from the General Fund.                                                                               
                                                                                                                                
1:40:13 PM                                                                                                                    
                                                                                                                                
Mr. Labolle advanced to Sections 24 through 28:                                                                                 
                                                                                                                                
     Sec. 24  page 53,  lines 4-12. Department  of Commerce,                                                                    
     Community, and Economic  Development - Reappropriations                                                                    
     for:   (a)    Alaska   Energy    Authority   Electrical                                                                    
     Emergencies- not to exceed $330,000.                                                                                       
     Page 53, line 10-12.  (b) reappropriates the unexpended                                                                    
     and unobligated  balance of the renewable  energy grant                                                                    
     fund estimated  to be $3,200,000  to the  Alaska Energy                                                                    
     Authority    for   Rural    Power   Systems    Upgrades                                                                    
     (contingency language in  section (contingency language                                                                    
     in section 41 50/50 match)                                                                                                 
                                                                                                                                
     Sec.   25  page   53,   lines   13-24.  Department   of                                                                    
     Corrections   -   Reappropriations   from   the   State                                                                    
     Libraries   Archives  and   Museum   project  to:   (a)                                                                    
     Underground   storage  tank   upgrades  -   not  exceed                                                                    
     $1,850,000 and                                                                                                             
     Subsection (b)  on Line  19: for  Deferred maintenance,                                                                    
     renovation,  repair,  and  equipment -  not  to  exceed                                                                    
     $740,000                                                                                                                   
     Sec.  26  page  53,  line   25  -  page  55,  line  28:                                                                    
     Department of Education and                                                                                                
     Early  Development  -  Reappropriation  of  past  major                                                                    
     maintenance  projects to  the  Major Maintenance  grant                                                                    
     fund - estimated to be $3,503,492                                                                                          
                                                                                                                                
     Sec.  27  page  55,  line   29  -  Page  56,  lines  6.                                                                    
     Department  of  Fish   and  Game  -Reappropriation  for                                                                    
     vessels   and   aircraft   maintenance,   repair,   and                                                                    
     upgrades- not to exceed $500,000.                                                                                          
                                                                                                                                
     Sec. 28 page  56, lines 7-26: Department  of Health and                                                                    
     Social  Services  Reappropriations  for  (from  various                                                                    
     sources, reference the bill) -                                                                                             
     (a)  Deferred  maintenance,   renovation,  repair,  and                                                                    
     equipment for  Alaska Pioneers' Homes  - not  to exceed                                                                    
     $773,432                                                                                                                   
     Line 17: (b)  Deferred maintenance, renovation, repair,                                                                    
     and equipment  for facilities  of the  department other                                                                    
     than Alaska Pioneers' Homes - not to exceed $382,143.                                                                      
                                                                                                                                
1:42:59 PM                                                                                                                    
                                                                                                                                
Mr. Labolle addressed Sections 29 through 34:                                                                                   
                                                                                                                                
     Sec. 29 page  56, line 27- Page 57,  line 5. Department                                                                    
     of  Labor  and Workforce  Development-  Reappropriation                                                                    
     for   deferred   maintenance,  renewal,   repair,   and                                                                    
     equipment - not to exceed $550,000                                                                                         
                                                                                                                                
     Sec. 30 page  57 lines 6 - 8. Appropriates  from the AK                                                                    
     liquefied  natural gas  project fund  to Department  of                                                                    
     Law   $5,000,000   to   hire   additional   prosecuting                                                                    
     attorneys.  This is only for fiscal year 2018.                                                                             
                                                                                                                                
     Sec. 31  page 57,  line 9- 14.   Department  of Natural                                                                    
     Resources -Reappropriation for  the national recreation                                                                    
     trails federal grant program - not to exceed $150,000                                                                      
                                                                                                                                
     Sec. 32  page 57  lines 15 -  17. Department  of Public                                                                    
     Safety appropriates  from the AK liquefied  natural gas                                                                    
     project   fund   to   Department   of   Public   Safety                                                                    
     $10,000,000 to  hire additional  state troopers.   This                                                                    
     is only for fiscal year 2018.                                                                                              
                                                                                                                                
     Sec. 33 Page  57, lines 18 - 23.  Department of Revenue                                                                    
     - (a)  appropriation from the  General fund to  the Tax                                                                    
     Division for  reprogramming the tax  revenue management                                                                    
     system and revenue  online tax portal - HB  111 oil and                                                                    
     gas tax  credit bill  implementation $1,200,000  - this                                                                    
     is  contingent  on  passage   of  HB  111  (Contingency                                                                    
     language found in Sec. 41)                                                                                                 
     Line  21: (b)  appropriation from  the General  fund to                                                                    
     the  Tax division  for Tax  Division for  reprogramming                                                                    
     the tax  revenue management  system and  revenue online                                                                    
     tax  portal  -   SB  25/HB  60  Motor   Fuel  Tax  bill                                                                    
     implementation  $50,000-this is  contingent on  passage                                                                    
     of SB 25/HB 60 (Contingency language found in Sec. 41)                                                                     
                                                                                                                                
     Sec. 34 page  57, line 24 - Page 77  line 9. Department                                                                    
     of    Transportation    and   Public    Facilities    -                                                                    
     Reappropriations  (a) for  the Izembek  Road project  -                                                                    
     not to exceed $10,000,000                                                                                                  
                                                                                                                                
1:45:34 PM                                                                                                                    
                                                                                                                                
Mr. Labolle continued to address Section 34:                                                                                    
                                                                                                                                
     Subsections   (b),  (c),   and  (d)   reappropriate  to                                                                    
     Federal-aid Highway match                                                                                                  
     Line 30: (b) Federal-aid Highway  match - not to exceed                                                                    
     $7,798,000                                                                                                                 
     Page  58  line  5:  (c)  Federal-aid  Highway  match  -                                                                    
     unexpended balance estimated to be $2,179,929                                                                              
     Page  58  Line  14:  (d) Federal-aid  highway  match  -                                                                    
     unexpended balance estimated to be $481,530                                                                                
     Page  58  Line  19:  (e)  -  the  unexpended  estimated                                                                    
     balance  of  $281,393  from  the  Hydaburg  small  boat                                                                    
     harbor is  reappropriated to the Harbor  facility grant                                                                    
     fund                                                                                                                       
     Page  58  Line  24:  (f) Federal-aid  Highway  match  -                                                                    
     estimated balance total:                                                                                                   
     $30,593,679 -  Reappropriations start  on page  58 line                                                                    
     27 - page 70 line                                                                                                          
     3 (118 reappropriations)                                                                                                   
                                                                                                                                
1:47:02 PM                                                                                                                    
                                                                                                                                
Mr. Labolle continued to subsection (g) of Section 34:                                                                          
                                                                                                                                
     Sec.  34 (g)  Page  70,  line 4  -  page  71, line  31:                                                                    
     Cleaning   up   Federal   Authorization   -Consolidates                                                                    
     previously      authorized     federal-aid      highway                                                                    
     appropriations   into   one   new   appropriation   for                                                                    
     efficiencies  in the  management of  the appropriations                                                                    
     in  IRIS -  estimated to  be a  total of  $675,600,000,                                                                    
     reappropriated to the  Department of Transportation and                                                                    
     Public  Facilities for  previously authorized  federal-                                                                    
    aid highway surface transportation program projects                                                                         
                                                                                                                                
Representative Wilson  asked if the cleanup  items pertained                                                                    
to federal,  state, or  a combination  of federal  and state                                                                    
dollars.                                                                                                                        
                                                                                                                                
Mr.  Labolle answered  that Section  34  dealt with  federal                                                                    
dollars  associated   with  the  federal   highway  program.                                                                    
Subsection (h) on  page 72 pertained to federal  aid for the                                                                    
aviation and rural airports.                                                                                                    
                                                                                                                                
Representative Wilson  clarified she was interested  in page                                                                    
70, subsection  (g). She asked  if it was a  cleanup because                                                                    
there was  additional state funding [allocated  to projects]                                                                    
that may  not have  been used, federal  funds the  state may                                                                    
still be able to use, or both.                                                                                                  
                                                                                                                                
Mr.  Labolle  replied that  funding  in  subsection (g)  was                                                                    
federal only. He elaborated that  there were several cleanup                                                                    
items in  subsections, some of  which were state  and others                                                                    
were  federal,  which  went  to  various  airport  and  road                                                                    
programs.                                                                                                                       
                                                                                                                                
Co-Chair  Seaton asked  if some  of  the unexpended  balance                                                                    
included both state and federal funds.                                                                                          
                                                                                                                                
Mr.   Labolle  answered   that   there   was  General   Fund                                                                    
authorization  in   subsection  (i),  but  funds   were  not                                                                    
expected  to be  there  - it  was  empty authorization  that                                                                    
needed  to  be taken  off  the  books.  He added  there  was                                                                    
language  included  that  specified  if  extra  funding  was                                                                    
available  it would  be  put in  the  federal highway  match                                                                    
program.                                                                                                                        
                                                                                                                                
Co-Chair Foster recognized  Representatives Harriet Drummond                                                                    
and Louise Stutes in the audience.                                                                                              
                                                                                                                                
1:49:51 PM                                                                                                                    
                                                                                                                                
Mr. Labolle addressed the final references to Section 34:                                                                       
                                                                                                                                
     Page 76, line 25: (k) Intent language for the cleanup                                                                      
    of past appropriations in the previous subsections                                                                          
     Page 76, line 29:  $10,000,000 is appropriated from the                                                                    
     Alaska  liquefied  natural  gas  project  fund  to  the                                                                    
     Department of  Transportation for road  maintenance and                                                                    
     plowing. This appropriation is only for FY 2018                                                                            
                                                                                                                                
Representative  Wilson  remarked   that  language  had  been                                                                    
included  specifying that  two previous  appropriations were                                                                    
for FY  18. She stated  the appropriation [on page  76, line                                                                    
29]  did  not  include  the  same  language  specifying  the                                                                    
appropriation was for FY 18.  She asked if the funding could                                                                    
be  used "more  like capital"  that could  be used  for five                                                                    
years.                                                                                                                          
                                                                                                                                
Mr. Labolle  answered that  unless otherwise  specified, any                                                                    
appropriation in the capital budget was a one-time item.                                                                        
                                                                                                                                
Representative  Wilson  replied  that  she  understood  that                                                                    
appropriations were one-time only,  but she thought that the                                                                    
recipient had five years to  utilize the funds. She referred                                                                    
to the items  for DOL and DPS that were  specifically for FY                                                                    
18. She wondered if the  appropriation for the item [on page                                                                    
76, line 29] could be spread out over a five-year period.                                                                       
                                                                                                                                
Mr.  Labolle  answered  that  the  item  was  a  maintenance                                                                    
project, not a  capital project. He clarified that  it was a                                                                    
one-time appropriation for FY 18  that could be spent over a                                                                    
period of five years.                                                                                                           
                                                                                                                                
Co-Chair  Foster asked  for clarification  on  the page  and                                                                    
line  references. Mr.  Labolle answered  he was  speaking to                                                                    
page 76, line 29.                                                                                                               
                                                                                                                                
1:51:45 PM                                                                                                                    
                                                                                                                                
Mr. Labolle addressed Sections 35 through 37:                                                                                   
                                                                                                                                
     Sec. 35 page 77, lines 1-5.: Fund Transfer - Transfer                                                                      
     of the large passenger vessel gaming and gambling tax                                                                      
     account  balance  to  the Alaska  Capital  Income  Fund                                                                    
     estimated to be $8,100,000                                                                                                 
     Line 4 Subsection (b)  appropriates 25,000,000 from the                                                                    
     Alaska  liquefied  natural  gas  project  fund  to  the                                                                    
     public school trust fund.                                                                                                  
                                                                                                                                
     Sec. 36 page  77, lines 6- 9.  Appropriates $37,500 for                                                                    
     Arctic Winter  Games Team  Alaska for  participation in                                                                    
    the 2018 Arctic Winter Games (contingent on sec 41)                                                                         
                                                                                                                                
     Sec 37 Page  77 Lines 10- 15. House Districts  33 -36 -                                                                    
     Reappropriation to the  Inter-Island Ferry Authority as                                                                    
     identified  in Section  1 to  provide them  $250,000 in                                                                    
     total  for  service  between Ketchikan  and  Prince  of                                                                    
     Wales Island (backfill mentioned in section 1)                                                                             
                                                                                                                                
1:53:05 PM                                                                                                                    
                                                                                                                                
Mr. Labolle moved to Sections 38 and 39:                                                                                        
                                                                                                                                
     Sec. 38  page 77, lines 16  - Page 79, line  23. Office                                                                    
     of  the Governor  - Reappropriations  to the  Office of                                                                    
     the Governor  subsections (a)  and (b)  for facilities,                                                                    
     and state government efficiency  efforts, and to pursue                                                                    
     economic  development  opportunities for  consideration                                                                    
     at  the state  and federal  levels -estimated  to be  a                                                                    
     combined total of $2,738,000                                                                                               
     Page  78,  line 16:  (c)  to  advance state  government                                                                    
     efficiency   efforts  and   to  evaluate   the  current                                                                    
     structure and  focus of AHFC,  AEA, and  AIDEA updating                                                                    
     date to include FY19 - estimated to be $850,000                                                                            
     Page 79, line  13: (d) for costs  associated with state                                                                    
     government   efficiency   and    to   pursue   economic                                                                    
     development  opportunities  for  consideration  at  the                                                                    
    state and federal levels - estimated to be $950,000                                                                         
                                                                                                                                
Representative Wilson  did not  know what the  agencies were                                                                    
using the  money for. She  requested the  backup information                                                                    
to  understand whether  the funds  would be  spent on  a new                                                                    
program or other.  She observed the funding was  close to $4                                                                    
million and she did not know what it would be spent on.                                                                         
                                                                                                                                
Mr. Labolle answered that he would get the information from                                                                     
the Senate for the committee. He continued to read from an                                                                      
explanation of changes:                                                                                                         
                                                                                                                                
     Sec.  39  Page   79,  line  24  -  Page   80  lines  7.                                                                    
     Reappropriation   of  Legislative   Appropriations  -To                                                                    
     Legislative   renovations,  projects,   and  technology                                                                    
     improvements - estimated to be $6,465,000                                                                                  
                                                                                                                                
     Sec.  40, starting  on page  80,  line 8:  Lapse -  (a)                                                                    
     capital  projects, Insurance  claims to  state agencies                                                                    
     to  mitigate   loss,  and   NPR-A  grants   lapse,  (b)                                                                    
     capitalization of  funds do not  lapse and  (c) capital                                                                    
     projects lapse unless a fiscal year is specified                                                                           
                                                                                                                                
1:56:02 PM                                                                                                                    
                                                                                                                                
Mr. Labolle addressed Sections 41 through 43:                                                                                   
                                                                                                                                
     Sec. 41, Page 80, lines 15-26. Contingency Language-                                                                       
     (a)  Rural  power  system  upgrades  state  funding  is                                                                    
     contingent on  federal matching funds (section  24 page                                                                    
     53 line 10)                                                                                                                
     Line 18. (b)  Appropriation of $1.2 million  to the Tax                                                                    
     division for  reprogramming the tax  revenue management                                                                    
     system is contingent on the  passage of HB 111- oil and                                                                    
     gas tax credits                                                                                                            
     Line  21.  (c)  Appropriation  of $50,000  to  the  Tax                                                                    
     division for  reprogramming the tax  revenue management                                                                    
     system  is contingent  on  the passage  SB  25/HB 60  -                                                                    
     motor fuel tax                                                                                                             
     Line  24.   (d)  Appropriation  made  in   Sec.  36  is                                                                    
     contingent on the raising of  $450,000 by Arctic Winter                                                                    
     Games Team  Alaska for team  participation in  the 2018                                                                    
     Arctic Winter Games.                                                                                                       
                                                                                                                                
     Sec.  42  page 80,  lines  27-28.  Effective Dates  for                                                                    
     Agency  appropriations,  debt  and  other  obligations,                                                                    
     fund capitalization, fund transfer,  and the motor fuel                                                                    
     tax passage implementation                                                                                                 
                                                                                                                                
     Sec.  43 page  80 lines  29 -  30. Effective  Dates for                                                                    
     Agency   reappropriations,    other   reappropriations,                                                                    
     contingency language for rural power system upgrades                                                                       
                                                                                                                                
     Sec. 44  page 80,  line 31- Page  81 line  1: Effective                                                                    
     Date  except sections  42 and  43 take  effect July  1,                                                                    
     2017.                                                                                                                      
                                                                                                                                
1:58:13 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:59:37 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Mr. Labolle  made a correction  to his statement  related to                                                                    
Section 44.  He clarified that  the effective date  would be                                                                    
July 1, 2017 except as provided in Sections 42 and 43.                                                                          
                                                                                                                                
^PUBLIC TESTIMONY                                                                                                             
                                                                                                                                
2:00:07 PM                                                                                                                    
                                                                                                                                
Co-Chair   Foster  provided   detail  on   public  testimony                                                                    
protocol.                                                                                                                       
                                                                                                                                
2:00:50 PM                                                                                                                    
                                                                                                                                
FRED STURMAN, SELF, KENAI  (via teleconference), spoke about                                                                    
companies  leaving  the state  for  other  locations due  to                                                                    
better  treatment.  He  surmised  there  appeared  to  be  a                                                                    
substantial amount  of [oil]  drilling in  the Lower  48. He                                                                    
supported  the legislature's  action of  taking $50  million                                                                    
from the gas  pipeline - he thought all of  the funds should                                                                    
be withdrawn.  However, he  did not  support reappropriation                                                                    
of the funds - he thought  the funds should be saved because                                                                    
the money would be needed in  the future. He shared that the                                                                    
Kenai Peninsula Borough was taking  about $4 million to $6.5                                                                    
million out  of the  economy. He remarked  that the  City of                                                                    
Kenai seemed  to be short on  money as it had  lost $500,000                                                                    
in sales  taxes. He thought  sales taxes were much  lower in                                                                    
many  cities  than  they  had been  the  previous  year.  He                                                                    
supported further  cuts to the  budget and  was disappointed                                                                    
that the  legislature was still giving  raises to government                                                                    
employees. He did  not support that the  legislature and the                                                                    
state  had offered  to pay  more than  the government  could                                                                    
afford.                                                                                                                         
                                                                                                                                
2:03:36 PM                                                                                                                    
                                                                                                                                
ELSTUN LAUESEN,  SELF, ANCHORAGE,  addressed the  portion of                                                                    
the capital budget providing subsidies  for oil companies in                                                                    
the amount of  $288 million. He did not know  when the state                                                                    
had   gotten  into   the   business   of  guaranteeing   the                                                                    
profitability  of private  oil  companies. He  wanted it  to                                                                    
stop. He thought  it was a corrupt practice  on the Senate's                                                                    
side.  He  stressed that  it  was  not  the state's  job  to                                                                    
underwrite the risks at the  cost of the state's fundamental                                                                    
services or  the diversification of  its economy. He  read a                                                                    
small portion of  a blog written by Brad  Keithly related to                                                                    
the $288  million subsidy.  He surmised  that the  state was                                                                    
choosing the  investors over the  interests of  the families                                                                    
of the state (whose Permanent  Fund Dividends had been cut).                                                                    
He stressed it was not the role of the legislature.                                                                             
                                                                                                                                
2:07:15 PM                                                                                                                    
                                                                                                                                
KARLA  HART,  SELF,  JUNEAU,  spoke  in  opposition  to  the                                                                    
proposed $288 million appropriation  from the budget reserve                                                                    
fund  to  the oil  industry.  She  stressed the  substantial                                                                    
figure. She  reasoned that  some programs  required $10,000,                                                                    
$100,000, or $1 million, which  really made a difference for                                                                    
those programs.  She discussed that  the $288  million could                                                                    
be spent on  things like capital or  operating budget items,                                                                    
education,   matching   federal   funds,  and   other.   She                                                                    
underscored  that  the  money   was  going  to  the  richest                                                                    
industry in the  state. She believed the usage  of the money                                                                    
made  no  sense.  She  urged the  committee  to  remove  the                                                                    
amount.                                                                                                                         
                                                                                                                                
Vice-Chair  Gara noted  that  there were  two  sides of  the                                                                    
issue and  he tended to  be on  Ms. Hart's side.  He relayed                                                                    
that  the Senate  operating budget  included $75  million in                                                                    
oil  tax credit  payments;  therefore, the  total was  about                                                                    
$350 million.                                                                                                                   
                                                                                                                                
Ms. Hart replied that it was worse than she had known.                                                                          
                                                                                                                                
Co-Chair Foster clarified that  the committee was addressing                                                                    
the  Senate's  version  of the  capital  budget.  The  [$288                                                                    
million]  increment had  been included  by  the Senate.  The                                                                    
committee would be considering whether  it would address the                                                                    
item in the coming days.                                                                                                        
                                                                                                                                
2:09:41 PM                                                                                                                    
                                                                                                                                
WOLFGANG  FAULKE,  SELF,   FAIRBANKS  (via  teleconference),                                                                    
spoke in  favor of eliminating the  Permanent Fund Dividend.                                                                    
He discussed that  it had attracted numerous  people for the                                                                    
extra money  and due to  the one-year  residency requirement                                                                    
for eligibility.  He urged the committee  cut and eventually                                                                    
eliminate the dividend. He spoke  to the need for attracting                                                                    
residents who could help develop  the state and do something                                                                    
productive.  He  noted that  the  state  had much  to  offer                                                                    
including mining.  He did  not want Alaska  to be  a welfare                                                                    
state. He  liked the  dividend, but  he believed  there were                                                                    
more useful ways to spend the funds.                                                                                            
                                                                                                                                
2:12:03 PM                                                                                                                    
                                                                                                                                
COLLEEN  DOSHKIN,   ADMINISTRATOR,  ASSOCIATION   OF  ALASKA                                                                    
HOUSING   AUTHORITIES,   ANCHORAGE   (via   teleconference),                                                                    
testified  in   support  of   the  Alaska   Housing  Finance                                                                    
Corporation  (AHFC) supplemental  housing development  grant                                                                    
program. The  organization requested to fund  the program at                                                                    
a minimum level  of $3 million. She shared  that the program                                                                    
provided up  to 20  percent of  the total  development costs                                                                    
for   energy  efficiency,   water   and  sewer,   electrical                                                                    
distribution,  and access  roads for  housing projects.  She                                                                    
explained that  the program was  a wise investment  of state                                                                    
funds and  when combined  with additional  resources results                                                                    
in  a  critical  boost  to local  economies  throughout  the                                                                    
state. The program had been  an incredible value to Alaska's                                                                    
affordable  housing by  providing  development gap  funding.                                                                    
She explained  that in many  cases the grant was  a make-or-                                                                    
break  funding  source  that  enabled   a  project  to  move                                                                    
forward.  She  asked for  the  committee's  support for  the                                                                    
funding for state sanitary development.                                                                                         
                                                                                                                                
2:14:34 PM                                                                                                                    
                                                                                                                                
CHRIS KOLEROK,  PRESIDENT AND  CEO, BERING  STRAITS REGIONAL                                                                    
HOUSING  AUTHORITY, NOME  (via teleconference),  thanked the                                                                    
committee for its time. He  requested the minimum funding of                                                                    
$3  million  for  the  Alaska  Housing  Finance  Corporation                                                                    
(AHFC)  supplemental housing  development grant  program. He                                                                    
detailed  that regional  housing authorities  were primarily                                                                    
funded by  federal appropriations;  however, the  funds were                                                                    
less  than they  had  been  in the  past.  He stressed  that                                                                    
inflation had cut  the housing authority budget  in half and                                                                    
people were  feeling the  pain. He  provided examples  of 19                                                                    
individuals living  in 3 bedroom  homes. The AHFC  helped to                                                                    
fill an  ever shrinking  gap. He provided  information about                                                                    
materials the  authority had purchased  for projects  in the                                                                    
current year.  He shared that  90 percent of the  funds were                                                                    
spent  on  Alaska  workers or  with  Alaska  businesses.  He                                                                    
concluded  that  funding the  program  at  a minimum  of  $3                                                                    
million was a wise investment for the state's economy.                                                                          
                                                                                                                                
2:16:51 PM                                                                                                                    
                                                                                                                                
SCOTT  MACMANUS,   SUPERINTENDENT,  ALASKA   GATEWAY  SCHOOL                                                                    
DISTRICT, TOK  (via teleconference),  thanked the  House for                                                                    
its support for  education. He shared that  the district was                                                                    
not unaware  that budget issues  existed and that  it needed                                                                    
to  do  its part  to  address  them.  He detailed  that  the                                                                    
district had been planning for  the contingency for a number                                                                    
of  years. He  expounded that  the district  had implemented                                                                    
biomass heating  systems and power  supplement systems  in a                                                                    
couple  of  its  schools.  Additionally,  the  district  had                                                                    
implemented pay freezes, it was  not filling some positions,                                                                    
and  it would  probably  have to  cut  music and  counseling                                                                    
programs  in  the  present year.  He  disputed  claims  that                                                                    
teachers in Alaska  were paid more than in  other states. He                                                                    
spoke to  the inability to  attract quality teachers  due to                                                                    
low pay, which was frustrating  when trying to create a good                                                                    
team for students.  He had spoken at a  recent University of                                                                    
Alaska  commencement ceremony  and  shared that  a Tok  high                                                                    
school  student had  received their  associate's degree  and                                                                    
would be graduating  from high school as well.  He urged the                                                                    
committee to hold the line with the budget.                                                                                     
                                                                                                                                
Vice-Chair Gara asked  if the district was  losing music and                                                                    
counseling  positions based  on a  flat budget  or with  the                                                                    
Senate's proposal.                                                                                                              
                                                                                                                                
Mr. MacManus replied  the positions would be  lost under the                                                                    
Senate's budget.                                                                                                                
                                                                                                                                
2:19:43 PM                                                                                                                    
                                                                                                                                
GEORGE PIERCE,  SELF, KASILOF (via teleconference),  did not                                                                    
support the  bill. He was  in favor of removing  funding for                                                                    
specific  items. He  was  opposed to  using  money from  the                                                                    
Permanent Fund.  He did not  support paying $288  million to                                                                    
the oil  and gas industry. He  stated that the Senate  was a                                                                    
joke. He  detailed there was  $25 million for  election, yet                                                                    
the  Senate was  proposing to  cut state  school funding  by                                                                    
nearly 6 percent. He asked if  it was called giving from one                                                                    
hand  and taking  from another.  He did  not support  a $700                                                                    
million tax credit  for the oil industry  annually. He asked                                                                    
the committee to  correct all of the  giveaways. He stressed                                                                    
that state  funding for nonprofits  had to stop. He  did not                                                                    
support corporations  and LLCs  being exempt from  taxes. He                                                                    
stressed that  more cuts were  needed. He asked  why funding                                                                    
had not been removed from the Juneau Access road project.                                                                       
                                                                                                                                
2:23:23 PM                                                                                                                    
                                                                                                                                
JAMES  KOWALSKY,   SELF,  FAIRBANKS   (via  teleconference),                                                                    
testified in  opposition to a $10  million appropriation for                                                                    
the Izembek road.  He stated that more than  $50 million had                                                                    
already  been spent  on evacuation  considerations for  King                                                                    
Cove. He continued that federal  tax money had been used. He                                                                    
explained  that tens  of millions  already spent  on a  road                                                                    
partially  north.  He  spoke   to  other  expenditures.  The                                                                    
proposed  road would  mean that  evacuations from  King Cove                                                                    
would take  about two hours.  He continued that  $52,000 per                                                                    
King Cove resident had already  been spent. He elaborated on                                                                    
costs  that would  be  incurred by  the  state. He  believed                                                                    
medical  evacuations  on the  road  would  be dangerous.  He                                                                    
thought  the   seafood  industry   was  still   the  primary                                                                    
justification for  the road. He provided  further detail. He                                                                    
referred to  hundreds of teachers  losing their jobs  due to                                                                    
the  budget  shortfall.  He   underscored  there  were  much                                                                    
greater needs for the money than for use on the road.                                                                           
                                                                                                                                
2:27:50 PM                                                                                                                    
                                                                                                                                
ABUL  HASSAN,  DIRECTOR,   PUBLIC  TRANSPORTATION,  CITY  OF                                                                    
ANCHORAGE, ANCHORAGE  (via teleconference), shared  that the                                                                    
bus ridership  was 4 million.  He referenced  other programs                                                                    
that ran  between Anchorage and  Mat-Su. He  provided detail                                                                    
about   his  professional   background.  He   spoke  to   an                                                                    
allocation  from  the governor  that  he  believed could  be                                                                    
added  back  into  the legislation.  He  detailed  that  the                                                                    
matching  funds enabled  Anchorage to  get an  additional $1                                                                    
million   from   the   federal  government.   He   discussed                                                                    
individuals who  relied on public  transportation to  get to                                                                    
school, work, the store, and  other. He underscored that the                                                                    
$1  million  cut   would  impact  a  large   number  of  the                                                                    
legislature's  own constituency.  He implored  the committee                                                                    
to restore  the funding for public  transportation. He added                                                                    
that  public transportation  was  the only  agency that  had                                                                    
reduced  its own  budget and  was making  innovative changes                                                                    
that were making national headlines.                                                                                            
                                                                                                                                
2:31:21 PM                                                                                                                    
                                                                                                                                
JOHN  SONIN,   SELF,  JUNEAU,  spoke  on   behalf  of  human                                                                    
civilization. He  did not  want the  House to  capitulate to                                                                    
the Senate version of the income  tax. He did not want funds                                                                    
to  be  robbed  from transportation,  education,  and  other                                                                    
services. He stated that the  legislature would have to take                                                                    
money  from   vital  services.  He  spoke   about  a  recent                                                                    
education  rally  at the  capitol  building.  He wanted  the                                                                    
legislature to act on its  constituents' behalf and not take                                                                    
money  from education.  He supported  new  revenues. He  was                                                                    
concerned that  the Senate may  get the House  to reconsider                                                                    
its income  tax proposal, which  he believed was  a critical                                                                    
component.                                                                                                                      
                                                                                                                                
2:35:07 PM                                                                                                                    
                                                                                                                                
SCOTT ANAYA,  SELF, ANCHORAGE (via  teleconference), thanked                                                                    
the   committee  for   its  work.   He  stressed   that  the                                                                    
legislature's action  would determine how bleak  the state's                                                                    
financial  future would  be or  how the  state would  emerge                                                                    
from the financial deficit. He  urged the committee to stand                                                                    
strong  against  the  Senate's  proposal.  He  believed  the                                                                    
House's  work was  the best  option  for coming  out of  the                                                                    
deficit  as  unscathed  as  possible.   He  spoke  from  the                                                                    
perspective of  a small business  owner and shared  that the                                                                    
recession had really hit main  street retailers the previous                                                                    
summer. He urged the committee  to scrap the oil tax program                                                                    
all together. He did not  want further cuts to the Permanent                                                                    
Fund Dividend. He was in favor  of an income tax. He did not                                                                    
want further damage to the  economy. He stated that children                                                                    
were the state's future.                                                                                                        
                                                                                                                                
2:38:44 PM                                                                                                                    
                                                                                                                                
PAT   LAVIN,   DEFENDERS   OF   WILDLIFE,   ANCHORAGE   (via                                                                    
teleconference), thanked  the committee for its  work to try                                                                    
to balance  the budget. He  did not support further  cuts to                                                                    
education and  critical services. He urged  the committee to                                                                    
delete  the  $10  million  appropriation  for  the  proposed                                                                    
Izembek  Road. He  discussed that  the road  was unnecessary                                                                    
and  did  not  make  sense as  an  emergency  transportation                                                                    
solution  in  the region.  He  noted  that road  maintenance                                                                    
stations  around the  state had  been closed  due to  budget                                                                    
cuts; over  100 maintenance  workers had  been laid  off. He                                                                    
urged  investing  funds  in priority  projects  that  served                                                                    
well-defined  state needs.  He  beseeched  the committee  to                                                                    
look  into the  project further  before authorizing  the $10                                                                    
million in funds.  He added that the $10  million cost would                                                                    
be the tip of the iceberg if the road was built.                                                                                
                                                                                                                                
2:42:00 PM                                                                                                                    
                                                                                                                                
ROB  PICOU,  SUPERINTENDENT,  LOWER YUKON  SCHOOL  DISTRICT,                                                                    
MOUNTAIN  VILLAGE   (via  teleconference),   encouraged  the                                                                    
committee to  restore the Senate's proposed  5.6 percent cut                                                                    
to public  education. He stressed  that the cut  would bring                                                                    
many  districts  across  the   state  dangerously  close  to                                                                    
implosion.  The  district  had a  $13.6  million  structural                                                                    
deficit  as a  result  of flat  funding.  He understood  the                                                                    
fiscal  crisis  facing  the  state   and  the  district  had                                                                    
eliminated all  counselors and had cut  administrative staff                                                                    
by  60 percent.  He shared  that  he had  worked in  various                                                                    
roles in  school districts  in both  rural and  urban Alaska                                                                    
for  the past  20  years. He  supported  the restoration  of                                                                    
funds to  the governor's  recommendation for  teacher health                                                                    
and  public  safety housing.  He  spoke  to a  recent  study                                                                    
related  to  costs  of education  in  Alaska.  He  discussed                                                                    
reasons for  teachers leaving the district  including decent                                                                    
housing conditions.  The district was working  with regional                                                                    
partners to upgrade teacher housing.  The district had spent                                                                    
$4.3  million   to  renovate  substandard   and  dilapidated                                                                    
teacher  housing  - funds  that  could  have otherwise  been                                                                    
spent  on  students. He  spoke  about  teacher housing  that                                                                    
flooded annually. He continued  that a six-plex construction                                                                    
project   was  costing   the  district   $2.3  million.   He                                                                    
reiterated his request to restore  funding to the governor's                                                                    
request of  $1,750,000 for teacher health  and public safety                                                                    
housing.                                                                                                                        
                                                                                                                                
2:45:47 PM                                                                                                                    
                                                                                                                                
MARK  SPRINGER,  TULUKSAK   NATIVE  COMMUNITY,  BETHEL  (via                                                                    
teleconference), spoke in support  of a request for $300,000                                                                    
for power  plant upgrades. He  did not see the  increment in                                                                    
the current  bill version and  asked for it to  be restored.                                                                    
He explained  that the project was  economic development and                                                                    
community  sustainability issue.  He  provided detail  about                                                                    
the current  power plant operations.  He explained  that the                                                                    
community did  not currently have  capacity to  supply power                                                                    
to  the school,  which it  would like  to have.  He detailed                                                                    
that Tuluksak had  made a significant investment  of its own                                                                    
funds to  improve capacity. He continued  that several years                                                                    
earlier the  community had  several million  dollars through                                                                    
the  Alaska Energy  Authority (AEA)  for fuel  upgrades, but                                                                    
the  money  had been  swept  up  for  a parking  garage.  He                                                                    
elaborated on the usage of requested funds.                                                                                     
                                                                                                                                
Co-Chair  Foster noted  that a  few years  earlier when  the                                                                    
state  was  flush  with  funding   each  district  had  been                                                                    
allocated  capital funds  to provide  for projects  like the                                                                    
power plant  upgrades. He  explained that  for the  past few                                                                    
years the legislature  had not allocated the  funding due to                                                                    
a  lack in  funds.  He  elaborated that  there  had been  no                                                                    
discretionary  and  reappropriation  funding over  the  past                                                                    
several years, which  in all likelihood would  continue.  He                                                                    
noted that  things would be taken  on a case by  case basis.                                                                    
He  encouraged  people to  continue  to  advocate for  their                                                                    
funding requests.                                                                                                               
                                                                                                                                
2:49:48 PM                                                                                                                    
                                                                                                                                
SUSAN  HANSEN, SELF,  FAIRBANKS (via  teleconference), spoke                                                                    
against the $10  million increment for the  road through the                                                                    
Izembek  Wildlife Refuge.  She explained  that the  road had                                                                    
initially been proposed  in the 1990s as a  road to expedite                                                                    
shipping  of seafood  from canneries  in King  Cove to  Cold                                                                    
Bay. She  detailed that the drive  would take 1 hour  and 50                                                                    
minutes and  the proposed goal was  to use the road  for the                                                                    
emergency transportation of patients.  She believed the road                                                                    
would  not be  practical  for that  purpose.  She asked  the                                                                    
committee to  remove the  item. She did  not believe  it was                                                                    
prudent to ask taxpayers to fund the item.                                                                                      
                                                                                                                                
2:51:14 PM                                                                                                                    
                                                                                                                                
JOE BANTA,  SELF, ANCHORAGE  (via teleconference),  spoke in                                                                    
strong  support for  education.  He asked  the committee  to                                                                    
reject cuts proposed in the  Senate's budget. He stated that                                                                    
the  Senate's  budget favored  tax  cuts  for big  oil  over                                                                    
adequate  education   funding,  housing,  and   other  basic                                                                    
infrastructure   needs.   He  underscored   that   education                                                                    
provided a  future for  the state's  children. He  urged the                                                                    
committee  to   develop  a   comprehensive  fiscal   plan  -                                                                    
including new  revenues - to  deal with the  budget deficit.                                                                    
He  remarked  that  taking  the  dividend  could  negatively                                                                    
impact the state's economy. He  urged a bipartisan effort to                                                                    
solve  the   state's  budget   problem.  He   supported  the                                                                    
implementation of  an income tax.  He stressed  that credits                                                                    
of $350  million to the  oil industry  represented corporate                                                                    
welfare. He did  not support a change to the  former oil tax                                                                    
structure  Alaska's Clear  and Equitable  Share (ACES)  that                                                                    
had taken place several years earlier.                                                                                          
                                                                                                                                
2:54:21 PM                                                                                                                    
                                                                                                                                
PAM  GOODE, SELF,  DELTANA  (via teleconference),  supported                                                                    
further spending cuts to reduce  the size of government. She                                                                    
believed  further cuts  would make  government stronger  and                                                                    
more efficient.  She believed  the best  way forward  was to                                                                    
keep  the money  in the  hands of  the people.  She did  not                                                                    
support an income tax. She  stressed that the Permanent Fund                                                                    
Dividend needed  to go  back into the  hands of  the people.                                                                    
She  was opposed  to the  appropriation of  $288 million  in                                                                    
credits  to the  oil industry.  She urged  the committee  to                                                                    
make more cuts.                                                                                                                 
                                                                                                                                
Co-Chair Foster CLOSED public testimony.                                                                                        
                                                                                                                                
CSSB 23(FIN) am was HEARD  and HELD in committee for further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair Foster noted amendments were  due on Monday, May 16                                                                    
at 6:00 p.m.                                                                                                                    
                                                                                                                                
Representative  Wilson stated  there were  projects included                                                                    
in  the budget  that she  did not  know anything  about. She                                                                    
asked about  resources to contact  over the weekend  to gain                                                                    
more information.                                                                                                               
                                                                                                                                
2:57:20 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:58:25 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Foster  replied that his  staff and staff  from the                                                                    
Legislative Finance Division  and Legislative Legal Services                                                                    
would be available for questions.                                                                                               
                                                                                                                                
Co-Chair  Foster addressed  the schedule  for the  following                                                                    
meeting.                                                                                                                        
                                                                                                                                

Document Name Date/Time Subjects
SB 23 Lower Yukon SD.pdf HFIN 5/13/2017 1:15:00 PM
SB 23
SB 23 ASTAR Letter NSB MAYOR.PDF HFIN 5/13/2017 1:15:00 PM
SB 23
SB 23 ASTAR funding request to House Fin-signed.pdf HFIN 5/13/2017 1:15:00 PM
SB 23
SB 23 Naneng Testimony Gara.pdf HFIN 5/13/2017 1:15:00 PM
SB 23