Legislature(2017 - 2018)HOUSE FINANCE 519

06/10/2017 10:00 AM FINANCE

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Audio Topic
11:20:43 AM Start
11:22:03 AM SB23
10:04:57 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 2:00 p.m. Sunday, 6/11/17 --
+= SB 23 APPROP: CAPITAL BUDGET TELECONFERENCED
Moved HCS CSSB 23(FIN) Out of Committee
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."                                                                               
                                                                                                                                
11:22:03 AM                                                                                                                   
                                                                                                                                
Co-Chair  Seaton  MOVED  to  ADOPT  the  proposed  committee                                                                    
substitute (CS) for CSSB 23(FIN)  am, Work Draft 30-GS1854\T                                                                    
(Martin,  6/9/17).  There  being  NO OBJECTION,  it  was  so                                                                    
ordered.                                                                                                                        
                                                                                                                                
11:23:00 AM                                                                                                                   
RECESSED                                                                                                                        
                                                                                                                                
2:15:49 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Foster  explained that  the  CS  had been  adopted                                                                    
earlier in the day.                                                                                                             
                                                                                                                                
PAUL LABOLLE,  STAFF, REPRESENTATIVE NEAL  FOSTER, explained                                                                    
the  changes in  the CS  from  the Senate  version to  House                                                                    
version T:                                                                                                                      
                                                                                                                                
     The first  change can be found  on page 7, on  line 19,                                                                    
     AHFC  Supplemental Housing  Development, $750,000  that                                                                    
     was decremented  in Senate has  been restored.  On Line                                                                    
     21,   AHFC   Teacher    Housing   and   Public   Safety                                                                    
     Professionals  Housing,  the  same  $750,000  that  was                                                                    
     decremented in  the Senate has  also been  replaced. On                                                                    
     Line 31,  Alaska Marine  Highway System  (AMHS) vessel,                                                                    
     there's a  fund source  change in the  numbers section,                                                                    
     page 11  and 12,  and it changes  the fund  source from                                                                    
     vessel replacement fund  to general fund as  was in the                                                                    
     original version of  the bill. Next page,  page 8, line                                                                    
     4, Public  and Community Transportation State  Match $1                                                                    
     million, this  was removed in  the Senate  and replaced                                                                    
     in this version.                                                                                                           
                                                                                                                                
2:18:56 PM                                                                                                                    
                                                                                                                                
Mr. Labolle turned to page 49, line 10:                                                                                         
                                                                                                                                
     This  is language  having  to do  with  the payment  of                                                                    
     settlements and judgements assessed  to the state, that                                                                    
     language  was   removed  in  the  Senate   version  and                                                                    
     replaced  with  line  item appropriations  of  specific                                                                    
     judgements    and   settlements.    That   line    item                                                                    
     appropriation  was   replaced  with  language   in  the                                                                    
     governor's supplemental.                                                                                                   
                                                                                                                                
Representative  Wilson   asked  why  they  went   from  more                                                                    
transparency to less.                                                                                                           
                                                                                                                                
Mr. Labolle replied  there was one settlement  that had been                                                                    
excluded  in   the  line  items,   which  was   for  Planned                                                                    
Parenthood. Legislative Legal  Services preferred open-ended                                                                    
language in the event  there were judgements and settlements                                                                    
that were unknown at the drafting of the bill.                                                                                  
                                                                                                                                
Representative  Wilson asked  about the  amount for  Planned                                                                    
Parenthood.                                                                                                                     
                                                                                                                                
Mr. Labolle  replied $1.1 million. The  next change appeared                                                                    
on page 57, line 20.                                                                                                            
                                                                                                                                
     The   Senate   had  put   in   language   to  make   an                                                                    
     appropriation   with  Alaska   Liquefied  Natural   Gas                                                                    
     (AKLNG)  project funds  to the  Department  of Law  for                                                                    
     additional  prosecuting attorneys.  In  our version  of                                                                    
     the  bill  we  extended  the  effective  years  of  the                                                                    
     appropriation so it  would include FY 18, FY  19 and FY                                                                    
     20.                                                                                                                        
                                                                                                                                
2:21:29 PM                                                                                                                    
                                                                                                                                
Representative Wilson  asked if  it would  allow contracting                                                                    
out for attorneys.                                                                                                              
                                                                                                                                
Mr. Labolle was not sure.                                                                                                       
                                                                                                                                
ROB  CARPENTER, ANALYST,  LEGISLATIVE FINANCE  DIVISION, did                                                                    
not know precisely; however, given  the language stating "to                                                                    
hire additional prosecuting attorneys"  that it would be in-                                                                    
house. He  noted it  would be  a Legislative  Legal Services                                                                    
question.                                                                                                                       
                                                                                                                                
Vice-Chair  Gara   noted  that   the  state   had  sometimes                                                                    
contracted  out  for  defense attorneys  at  a  lower  rate,                                                                    
sometimes for  civil attorneys, but  had not  contracted out                                                                    
for prosecutors.                                                                                                                
                                                                                                                                
Representative Wilson  noted that  she did not  know whether                                                                    
it had  been offered in light  of the case backlog.  She was                                                                    
curious about the  timeline of three years  versus one year.                                                                    
She could wait to hear from Legislative Legal Services.                                                                         
                                                                                                                                
2:23:27 PM                                                                                                                    
                                                                                                                                
Mr. Labolle turned to the next change on page 57, line 30:                                                                      
                                                                                                                                
     This is a reappropriation  that funds the ASTAR [Arctic                                                                    
     strategic transportation and  resources] project and it                                                                    
     reappropriates money from  Department of Transportation                                                                    
     and Public Facilities, Trunk Road  (phase one) from the                                                                    
     Department of Natural  Resources for reservoir studies,                                                                    
     North  Slope  and  Cook  Inlet;  and  from  the  Alaska                                                                    
     Railroad  for  Tanana  River  bridge  access,  and  the                                                                    
     amount of that reappropriation was $7.8 million.                                                                           
                                                                                                                                
Representative Wilson  thought it  looked like the  "road to                                                                    
resources."  She stated  there was  a lot  of discussion  of                                                                    
whether  AIDEA  [Alaska  Industrial Development  and  Export                                                                    
Authority] was going  to fund that project. She  asked if it                                                                    
was the same  project. If so, she wondered what  part of the                                                                    
project it would fund.                                                                                                          
                                                                                                                                
Mr. Labolle deferred to the department.                                                                                         
                                                                                                                                
ED   KING,   SPECIAL   ASSISTANT,  DEPARTMENT   OF   NATURAL                                                                    
RESOURCES, answered  the money  was for  the pre-engineering                                                                    
phase of the  project. The money would be used  to hire four                                                                    
people  for   contract  work.  He  referred   to  the  NPR-A                                                                    
[National  Petroleum  Reserve  in Alaska].  Currently  those                                                                    
activities were  not permitted under the  management plan of                                                                    
the NPR-A, but with the  recent signature of U.S. Department                                                                    
of Interior  Secretary Ryan Zinke  the department  could get                                                                    
the infrastructure into  the areas. The design  for the road                                                                    
was part  of the process. The  intent of the project  was to                                                                    
connect multiple communities and to open access.                                                                                
                                                                                                                                
Representative  Wilson   asked  if  it  would   be  a  state                                                                    
maintained road or would be free of restrictions.                                                                               
                                                                                                                                
Mr. King answered they were  in early stages of the project.                                                                    
Currently the  department was leaning  towards some  form of                                                                    
revenue bonding by the borough  to take on management of the                                                                    
road through arrangements with  industry partners. They were                                                                    
not envisioning the road would be state-maintained.                                                                             
                                                                                                                                
Representative Wilson  hoped if the  money was put  into the                                                                    
road that  everyone would  have access.  Some of  the monies                                                                    
were coming  from the  Tanana Bridge, which  can be  used by                                                                    
Fairbanks residents for a week  or two each year for hunting                                                                    
purposes.  She felt  it  was  putting a  lot  of money  into                                                                    
something  that   could  not  be  utilized.   She  preferred                                                                    
something that all Alaskans could use.                                                                                          
                                                                                                                                
2:27:23 PM                                                                                                                    
                                                                                                                                
Mr. Labolle spoke to page 57, line 12:                                                                                          
                                                                                                                                
     This is  Department of Public Safety  language that the                                                                    
     Senate  put  in  for  the hiring  of  additional  state                                                                    
     troopers.  Similar to  what we  did with  Department of                                                                    
     Law we extended the  fiscal years of that appropriation                                                                    
     to include FY 18, FY 19 and FY 20.                                                                                         
                                                                                                                                
Representative Guttenberg  spoke to  money taken out  of the                                                                    
AKLNG project fund. He wondered  if the committee could hear                                                                    
from the department regarding the impact of that decrement.                                                                     
                                                                                                                                
2:28:39 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:30:20 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Foster moved back to  the changes in the bill while                                                                    
waiting for a representative from the administration.                                                                           
                                                                                                                                
Mr. Labolle addressed the Juneau  Access project on page 59,                                                                    
line 8:                                                                                                                         
                                                                                                                                
     This  is  the  Juneau   Access  Project.  The  original                                                                    
     version of  the bill reappropriated funds  left in that                                                                    
     project to the Alaska class  ferry and to Northern Lynn                                                                    
     Canal transportation  improvements. The  Senate removed                                                                    
     those  reappropriations  and  this reinserts  the  same                                                                    
     reappropriations.                                                                                                          
                                                                                                                                
Co-Chair  Foster  noted  that  the  Department  of  Law  was                                                                    
online.                                                                                                                         
                                                                                                                                
JOHN  SKIDMORE, DIRECTOR,  CRIMINAL DIVISION,  DEPARTMENT OF                                                                    
LAW, was available for questions.                                                                                               
                                                                                                                                
Vice-Chair  Gara spoke  to  prosecutor  positions. He  asked                                                                    
whether, if $5  million was split over  a three-year period,                                                                    
it would suffice or whether they could make do with less.                                                                       
                                                                                                                                
Mr.  Skidmore replied  that  the figures  used  by DOL  were                                                                    
$225,000  per attorney.  He could  not  determine where  the                                                                    
prosecutors would be placed until  he had seen the resources                                                                    
appropriated by  the legislature. He reminded  the committee                                                                    
that  the department  had  not  requested additional  funds,                                                                    
however,  they would  evaluate where  those  funds would  be                                                                    
used if the money was allocated.                                                                                                
                                                                                                                                
Vice-Chair   Gara  referred   to  the   attorney  cost.   He                                                                    
calculated it  was approximately  seven or  eight attorneys.                                                                    
He asked if it met the need.                                                                                                    
                                                                                                                                
Mr. Skidmore  replied that in terms  of the need -  if there                                                                    
were  additional funds  appropriated,  the department  would                                                                    
use  funds  to engage  in  additional  prosecutions. It  was                                                                    
difficult  to  specify  the  need.  He  believed  they  were                                                                    
currently prosecuting cases with  11 prosecutors, and as the                                                                    
positions had been  reduced, they had reduced  the number of                                                                    
prosecutions. He  felt it was  a subjective  evaluation when                                                                    
it came  to the number  of prosecutions the state  wanted to                                                                    
carry out.                                                                                                                      
                                                                                                                                
2:35:53 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara remarked that the  department had lost about                                                                    
11 prosecutors and  the bill language would add  about 7. He                                                                    
asked  if the  increment  would be  sufficient to  prosecute                                                                    
more cases.                                                                                                                     
                                                                                                                                
Mr. Skidmore  answered that  it would  return the  number of                                                                    
prosecutors to  just below  the level  of about  three years                                                                    
earlier. He added  that during the same  timeframe the state                                                                    
had  been doing  fewer prosecutions  also because  there had                                                                    
been fewer referrals  from law enforcement. He  did not have                                                                    
the data on hand. He  believed the department would have the                                                                    
ability to do more prosecutions  with more staff, but he did                                                                    
not  believe it  was necessary  to return  to the  number of                                                                    
three years earlier.                                                                                                            
                                                                                                                                
2:38:35 PM                                                                                                                    
                                                                                                                                
Representative Wilson  spoke to the bill  that specified "to                                                                    
hire prosecutors."  She asked  whether the  department would                                                                    
only need it because some cases went on longer than others.                                                                     
                                                                                                                                
Mr. Skidmore answered that the  department did not generally                                                                    
hire  contractors for  prosecution cases.  The only  time in                                                                    
which this  would happen was  for a very specific  appeal or                                                                    
post-conviction  relief  in  which   there  was  an  obvious                                                                    
limitation  on the  work required.  He did  not believe  the                                                                    
department would;  however, the department had  found itself                                                                    
short-staffed on a number of  occasions and in order to fill                                                                    
gaps due to  family leave, DOL had  contemplated bringing in                                                                    
former experienced prosecutors.                                                                                                 
                                                                                                                                
Representative Wilson  asked if  Mr. Skidmore  was concerned                                                                    
that the  increment would  only last  three years,  and that                                                                    
hiring  people may  involve letting  them go  at the  end of                                                                    
that period.                                                                                                                    
                                                                                                                                
Mr. Skidmore answered  in the affirmative and  added that it                                                                    
would take considerable thought  from management on how that                                                                    
would be addressed.                                                                                                             
                                                                                                                                
2:41:53 PM                                                                                                                    
                                                                                                                                
Representative  Neuman   remarked  he  had   concerns  about                                                                    
appropriating leftover capital  monies from capital projects                                                                    
for an operating budget increment.  He discussed that in the                                                                    
past the  funds had  been used  to receive  federal matching                                                                    
funds  for  highway funds.  He  believed  it could  leave  a                                                                    
considerable hole in the operating budget of $500 million.                                                                      
                                                                                                                                
Representative  Guttenberg  found  it  frustrating  to  hear                                                                    
there  were  not  enough referrals  from  the  troopers.  He                                                                    
thought  it  may  be  that  more  prosecutors  without  more                                                                    
troopers may be the cause. He  spoke to a rise in burglaries                                                                    
in his district.                                                                                                                
                                                                                                                                
Mr. Skidmore responded  in the affirmative. He  spoke to the                                                                    
need  for balance  across the  criminal  justice system.  He                                                                    
thought that  in part  it was  due to  a lack  of deferrals;                                                                    
however, the percentage of  referrals declined had increased                                                                    
due to  a lack of  prosecutors. If the  referrals increased,                                                                    
the department would definitely need more prosecutors.                                                                          
                                                                                                                                
2:45:06 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg asked about  the impact on the $50                                                                    
million  allocation out  of the  AKLNG fund  on the  ongoing                                                                    
project negotiations and efforts to get gas to the market.                                                                      
                                                                                                                                
GENE  THERRIAULT, DEPUTY  DIRECTOR, STATEWIDE  ENERGY POLICY                                                                    
DEVELOPMENT,   ALASKA   ENERGY  AUTHORITY,   DEPARTMENT   OF                                                                    
COMMERCE, COMMUNITY  AND ECONOMIC DEVELOPMENT,  replied that                                                                    
the loss  of the  funding would  be severely  detrimental to                                                                    
moving forward.  He referred  to a  series of  very positive                                                                    
meetings in Washington,  D.C., and it was clear  the loss of                                                                    
funding would put the brakes on the project.                                                                                    
                                                                                                                                
Representative  Guttenberg  asked   for  more  detail  about                                                                    
conversations  Mr. Therriault  had  in  Washington, D.C.  He                                                                    
asked at which  level of personnel they  were discussing the                                                                    
project.                                                                                                                        
                                                                                                                                
Mr.   Therriault  answered   they  had   met  with   federal                                                                    
Department of  Transportation and with PHMSA  - Pipeline and                                                                    
Hazardous Materials Safety  Administration, which would make                                                                    
determinations  on the  investments  for infrastructure  and                                                                    
could  aid in  managing the  costs related  to the  project.                                                                    
Department  of  Interior Secretary  Zinke  had  been in  the                                                                    
state and had  indicated the desire to develop  more oil and                                                                    
gas on the North Slope,  and the state needed infrastructure                                                                    
to  get gas  to market.  They met  with staff  at the  White                                                                    
House  who were  working on  the president's  infrastructure                                                                    
endeavors, specifically energy  infrastructure and making it                                                                    
accessible  to  Alaska   citizens  and  supporting  military                                                                    
installations  in   Alaska.  The   CEO  of   Alaska  Gasline                                                                    
Development  Corporation (AGDC),  Keith  Meyer, had  changed                                                                    
his travel plans in order to  be present. He detailed it had                                                                    
been a  full afternoon  of meetings with  various department                                                                    
secretaries.  Vice-President Pence  had opened  proceedings.                                                                    
President Trump had heard the  recommendations at the end of                                                                    
the  meetings.   He  felt  very   positive  about   how  the                                                                    
administration was viewing the project.  He had met a number                                                                    
of agency  personnel who had  experience working  in Alaska,                                                                    
so they  understood the issues involved  and were interested                                                                    
in  ensuring there  was appropriate  latitude  given to  the                                                                    
project  in regards  to  construction  permitting. They  had                                                                    
impressed upon the federal agencies  that they would require                                                                    
appropriate resources  to ensure  the project  went forward.                                                                    
The  department  was  looking   to  advance  Federal  Energy                                                                    
Regulatory  Commission  (FERC)  and  regulatory  components.                                                                    
They had  come up  with draft letters  of intent.  The major                                                                    
efforts  were  aimed  at establishing  whether  the  project                                                                    
could be  regulated, financed, permitted, and  whether there                                                                    
were customers. Once those  components were established, the                                                                    
project could commence construction.                                                                                            
                                                                                                                                
2:52:44 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg  felt the project  discussions had                                                                    
gotten pretty far down the road.                                                                                                
                                                                                                                                
Representative  Neuman asked  how close  the project  was to                                                                    
establishing what the final cost was.                                                                                           
                                                                                                                                
Mr. Therriault answered  in the recent calendar  year, a lot                                                                    
of money had been spent on  engineering to get a better idea                                                                    
of costs. Previous calculations had  been brought down to an                                                                    
upper number of $43 billion, so  it was still a project with                                                                    
significant  cost. Going  from  three trains  to two  trains                                                                    
would  drop the  potential price  dramatically. There  would                                                                    
still  be  the  same  size  pipeline,  as  there  was  still                                                                    
interest  in  having  the  same  capacity.  The  agency  was                                                                    
examining the market demand to  discover how it might impact                                                                    
the price.                                                                                                                      
                                                                                                                                
Representative Neuman requested  the information through the                                                                    
chair's  office. He  remarked that  in going  from three  or                                                                    
possible  four trains  to two,  there  would be  significant                                                                    
change in the costs.                                                                                                            
                                                                                                                                
2:55:24 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Gara asked  why the  Trump Administration  would                                                                    
want to help Alaska transport gas internationally.                                                                              
                                                                                                                                
Mr. Therriault  answered it involved  balance of  trade, for                                                                    
example with  China. He described meetings  with the Chinese                                                                    
government and  large energy purchasers, both  in Alaska and                                                                    
in China.                                                                                                                       
                                                                                                                                
Vice-Chair Gara asked how much money was still available.                                                                       
                                                                                                                                
Mr.  Therriault  answered  there  was $102  million  at  the                                                                    
beginning of the calendar year. The  rest of FY 17 was drawn                                                                    
from  for  the  effort  with  FERC.  It  involved  a  larger                                                                    
expenditure  at  the  beginning  of  the  fiscal  year  then                                                                    
tapered off near the end of FY 18.                                                                                              
                                                                                                                                
Vice-Chair Gara asked  for verification the plan  was to use                                                                    
all of the available funds through FY 18.                                                                                       
                                                                                                                                
Mr. Therriault replied in the affirmative.                                                                                      
                                                                                                                                
Vice-Chair Gara  asked whether the permitting  work could be                                                                    
used a few years down the road.                                                                                                 
                                                                                                                                
Mr. Therriault answered that the  approval by FERC and based                                                                    
on his  experience working at Alaska  Energy Authority (AEA)                                                                    
there were some  FERC permits for hydro  projects that could                                                                    
be extended, which was not  unusual. The agency believed the                                                                    
project  worked even  at  the current  prices.  It was  felt                                                                    
there was $1  billion of free cash flow  just from operating                                                                    
the components  of the infrastructure, and  additionally the                                                                    
state would be selling gas molecules.                                                                                           
                                                                                                                                
3:00:15 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara  had been skeptical  that at  current prices                                                                    
the state could  profit. He queried whether  the money spent                                                                    
would  disappear as  the price  was so  low and  whether the                                                                    
money was  well spent at the  present time if the  price was                                                                    
higher in five or six years.                                                                                                    
                                                                                                                                
Mr. Therriault deferred to Mr. Richards.                                                                                        
                                                                                                                                
FRANK  RICHARDS,  SENIOR   VICE  PRESIDENT,  ALASKA  GASLINE                                                                    
DEVELOPMENT CORPORATION (AGDC)  (via teleconference), stated                                                                    
his understanding of the question.                                                                                              
                                                                                                                                
Vice-Chair Gara restated his question.                                                                                          
                                                                                                                                
Mr.   Richards  replied   the  FERC   process  was   for  an                                                                    
environmental  impact  statement.  It was  said  there  were                                                                    
50,000  pages  of  environmental,  safety,  reliability  and                                                                    
engineering  data. Once  FERC  made  the determination,  the                                                                    
normal  timeframe for  developing gas  was about  18 months.                                                                    
The  agency had  specifically asked  that they  complete the                                                                    
process by  the end  of 2018. If  approval were  received by                                                                    
December 31,  2018, the document  would remain  viable until                                                                    
2023.  If  construction  did   not  begin  immediately,  the                                                                    
document would  stay active for  three to five  years. After                                                                    
that, if FERC  saw that there was no  construction, it would                                                                    
ask for a refresh of the data.                                                                                                  
                                                                                                                                
3:04:26 PM                                                                                                                    
                                                                                                                                
Co-Chair Seaton stated it had  been generally described as a                                                                    
FERC license. He  referred to the $102 million  and asked if                                                                    
it would take  the project to a FERC license  or to a number                                                                    
of  other  unanswered  questions before  the  project  could                                                                    
begin.                                                                                                                          
                                                                                                                                
Mr. Therriault deferred to Mr. Richards.                                                                                        
                                                                                                                                
Mr.  Richards  answered that  the  budget  presented to  the                                                                    
board  for FY  17  and FY  18 was  the  anticipated cost  to                                                                    
advance  to the  FERC process.  Currently there  was a  very                                                                    
sound  environmental document  before FERC.  The information                                                                    
should be  able to  answer most of  the questions.  If there                                                                    
was an additional  request for wetlands data,  that could be                                                                    
carried out in  the field in a timely fashion.  The goal was                                                                    
to remain within  the funds appropriated in FY 17  and FY 18                                                                    
expenditure.                                                                                                                    
                                                                                                                                
Co-Chair  Seaton  asked  for clarification  of  whether  the                                                                    
agency did  or did not anticipate  additional questions that                                                                    
would extend the process.                                                                                                       
                                                                                                                                
Mr.  Richards did  not know  what was  in the  minds of  the                                                                    
regulators, but  there would be  questions. He  believed the                                                                    
questions that  were brought forward could  be answered with                                                                    
the funds available.                                                                                                            
                                                                                                                                
Mr.  Therriault   added  that  the  meetings   and  positive                                                                    
reception  had  been  surprising. Although  there  would  be                                                                    
questions,  the departments  were  not supposed  to use  the                                                                    
permitting process to grind projects  to a halt. He believed                                                                    
available  dollars  could  be   stretched  to  complete  the                                                                    
process.                                                                                                                        
                                                                                                                                
Representative Pruitt  asked whether during the  meetings in                                                                    
Washington,  D.C.,  there was  discussion  not  only of  the                                                                    
Alaska project, but many projects.                                                                                              
                                                                                                                                
Mr. Therriault  replied in the  affirmative. He  detailed it                                                                    
had  been clear  it  had  not been  to  focus on  particular                                                                    
projects;  however, as  they  talked  about mechanisms  that                                                                    
could be used,  it was implied that if  presenters wanted to                                                                    
use  their project  to highlight  how a  mechanism would  be                                                                    
beneficial, there would be that opportunity.                                                                                    
                                                                                                                                
3:10:19 PM                                                                                                                    
                                                                                                                                
Representative  Pruitt  was  trying  to  understand  whether                                                                    
there  was a  consensus  that the  administration was  fully                                                                    
with the state.                                                                                                                 
                                                                                                                                
Mr. Therriault answered  that the summit at  the White House                                                                    
had  been a  discussion  about incentivizing  infrastructure                                                                    
investment. While that had been  very positive, the meetings                                                                    
with  the  personnel  in  the agencies  had  been  the  most                                                                    
productive.  They all  knew that  the  administration had  a                                                                    
focus  on  infrastructure  and   that  their  agencies  were                                                                    
supposed  to  use  flexibility to  get  things  through  the                                                                    
process.                                                                                                                        
                                                                                                                                
3:12:45 PM                                                                                                                    
                                                                                                                                
Mr. Labolle asked members to return  to page 52 of the bill,                                                                    
line  24  was the  fiscal  note  adjustment associated  with                                                                    
passage of the Real ID Act.                                                                                                     
                                                                                                                                
Representative Pruitt  stated that the  above-mentioned line                                                                    
was regarding the Alaska Housing Finance Corporation.                                                                           
                                                                                                                                
Mr. Labolle clarified  he was referring to  Section 24, line                                                                    
28.                                                                                                                             
                                                                                                                                
Mr. Labolle turned to page 55, line 28:                                                                                         
                                                                                                                                
     This is  a reappropriation  from the Knik  Arm crossing                                                                    
     and  environmental  impact   statement  and  from  DMVA                                                                    
     deferred maintenance projects  arming facilities to the                                                                    
     Department of Education.                                                                                                   
                                                                                                                                
     It continues  on to  the next page  where it  lists the                                                                    
     Department  of Military  and Veterans  Affairs deferred                                                                    
     maintenance projects and it  reappropriates that to the                                                                    
     Department  of   Education  for  construction   of  the                                                                    
     Kivalina   K-12  replacement.   The   amount  of   that                                                                    
     appropriation is  approximately $7 million and  that is                                                                    
     the amount  that is short  in the original  estimate in                                                                    
     for  the construction  of that  school associated  with                                                                    
     the Kasayulie case.                                                                                                        
                                                                                                                                
3:15:18 PM                                                                                                                    
                                                                                                                                
Representative  Pruitt asked  how much  of the  $7.1 million                                                                    
was coming  from funding  for the Knik  Arm Project  and how                                                                    
much was from the Army Guard portion.                                                                                           
                                                                                                                                
Mr. Labolle  clarified that $5  million was coming  from the                                                                    
Knik Arm Project and the  remaining $2.1 million coming from                                                                    
DMVA.                                                                                                                           
                                                                                                                                
Representative Pruitt asked  whether it was for  the road or                                                                    
for  the  school.  Mr.  Labolle responded  it  was  for  the                                                                    
school.                                                                                                                         
                                                                                                                                
Representative Pruitt asked about the road funding.                                                                             
                                                                                                                                
Mr. Labolle deferred to Mr. Carpenter.                                                                                          
                                                                                                                                
Mr.  Carpenter asked  Representative  Pruitt  to repeat  his                                                                    
question.                                                                                                                       
                                                                                                                                
Representative Pruitt  asked whether  there was  still going                                                                    
to  be a  need for  money  in the  future for  the road.  He                                                                    
thought $8 million was needed for the road project.                                                                             
                                                                                                                                
Mr. Carpenter  responded that  the amount  for the  road was                                                                    
upwards of $54  million. He added that  this money completed                                                                    
what was  required to  fulfill Kasayulie  case to  build the                                                                    
Kivalina School.                                                                                                                
                                                                                                                                
Representative Pruitt  asked what  had changed  resulting in                                                                    
the need for an additional $7 million.                                                                                          
                                                                                                                                
Mr.  Carpenter answered  that  it was  a  timing issue.  The                                                                    
amount  in the  settlement was  determined, then  a new  CIP                                                                    
[Capital  Improvement  Project]  priority  report  came  out                                                                    
subsequently   with   higher   amounts.  Even   though   the                                                                    
settlement  gave a  certain number,  it was  determined that                                                                    
the  state  was  still  liable  for  the  additional  amount                                                                    
subsequently.                                                                                                                   
                                                                                                                                
Representative  Pruitt asked  if  it was  expected that  all                                                                    
obligations  would be  fulfilled within  a relatively  short                                                                    
time.                                                                                                                           
                                                                                                                                
Mr. Carpenter believed the  amount fulfilled the obligation.                                                                    
He remarked there  was nothing eminent because  the road had                                                                    
to be  built prior  to its construction.  He would  defer to                                                                    
DOT [Alaska Department of Transportation] on that issue.                                                                        
                                                                                                                                
Representative  Pruitt  asked   about  appropriations  being                                                                    
necessary at the  current time, and whether  the costs would                                                                    
increase  over  time,  given  that   there  was  no  current                                                                    
timeline.                                                                                                                       
                                                                                                                                
Co-Chair Foster  asked if Department of  Education and Early                                                                    
Development (DEED) could become available for questions.                                                                        
                                                                                                                                
3:21:07 PM                                                                                                                    
                                                                                                                                
Representative  Tilton asked  about required  follow-through                                                                    
regarding the Knik Arm Project  and whether any monies would                                                                    
have to be returned to the federal government.                                                                                  
                                                                                                                                
Mr. Carpenter believed  no money would have  to be returned.                                                                    
He thought it would be a good idea to hear from DOT.                                                                            
                                                                                                                                
Representative  Neuman asked  about  the total  cost of  the                                                                    
school  and the  road. He  also  asked about  the number  of                                                                    
students that would attend the school.                                                                                          
                                                                                                                                
Mr. Labolle  responded $45 million  for the school  and then                                                                    
later $7  million was added  to the assessment. The  cost of                                                                    
the road was approximately $57  million. He deferred to DEED                                                                    
for the number of students.                                                                                                     
                                                                                                                                
Representative Neuman  confirmed that  the total  was around                                                                    
$110  million  and  reiterated  his  interest  in  receiving                                                                    
student numbers.                                                                                                                
                                                                                                                                
Mr. Labolle replied in the affirmative.                                                                                         
                                                                                                                                
3:23:24 PM                                                                                                                    
                                                                                                                                
MIKE VIGUE,  DIRECTOR OF PROGRAM DEVELOPMENT,  DEPARTMENT OF                                                                    
TRANSPORTATION   AND    PUBLIC   FACILITIES,    replied   to                                                                    
Representative Tilton's  question regarding  monies returned                                                                    
to the federal government and  stated that there would be no                                                                    
requirement to re-pay money for that project.                                                                                   
                                                                                                                                
Representative  Pruitt  asked   whether  there  was  federal                                                                    
participation in the road project  and what the timeline was                                                                    
for the school construction.                                                                                                    
                                                                                                                                
Mr.  Vigue  answered  the  department  was  currently  using                                                                    
federal  highway funds  to  complete  an EIS  [environmental                                                                    
impact study]  in collaboration with  the borough.  He would                                                                    
find out what  the schedule was but the design  could not be                                                                    
completed  until  the  NEPA [National  Environmental  Policy                                                                    
Act] document was completed.                                                                                                    
                                                                                                                                
Representative Pruitt asked about  the typical timeframe and                                                                    
expectation of the design after that phase.                                                                                     
                                                                                                                                
Mr. Vigue  replied there were numerous  variables that would                                                                    
dictate the timeframe.  Typically it would take  a couple of                                                                    
years, but this would assume that permitting was immediate.                                                                     
                                                                                                                                
Representative  Pruitt   stated  the   road  would   not  be                                                                    
completed  for  several years  and  he  believed the  school                                                                    
could not  begin construction until  the road  was complete.                                                                    
He asked for  confirmation that it would  take anywhere from                                                                    
two to ten years to complete.                                                                                                   
                                                                                                                                
Mr. Vigue answered in the affirmative.                                                                                          
                                                                                                                                
3:27:22 PM                                                                                                                    
                                                                                                                                
Representative Neuman  asked what  authority DOT had  to use                                                                    
federal highway funds for the road project to the school.                                                                       
                                                                                                                                
Mr. Vigue  answered that the  department was allowed  to use                                                                    
apportionments  from the  Federal Highway  Administration on                                                                    
any public road  in the state of Alaska. It  was not unusual                                                                    
to use such fund to build the road.                                                                                             
                                                                                                                                
Representative  Wilson stated  the  school was  in a  unique                                                                    
position with the road issue.  She asked whether there was a                                                                    
problem  of violations  as  the state  could  not build  the                                                                    
school until the road was built.                                                                                                
                                                                                                                                
HEIDI  TESHNER,  DIRECTOR,  SCHOOL FINANCE  AND  FACILITIES,                                                                    
DEPARTMENT   OF  EDUCATION   AND   EARLY  DEVELOPMENT   (via                                                                    
teleconference), replied  there had been  conversations with                                                                    
the  borough and  the school  district. It  seemed the  road                                                                    
piece was moving forward so  that construction on the school                                                                    
could commence.                                                                                                                 
                                                                                                                                
Representative  Wilson asked  whether  the  amount of  money                                                                    
named was to avoid problems with the court case.                                                                                
                                                                                                                                
Ms. Teshner asked for verification  she was referring to the                                                                    
$7.1 million.                                                                                                                   
                                                                                                                                
Representative  Wilson was  talking  more  broadly than  the                                                                    
$7.1 million.  She asked what  the exact figure was  for the                                                                    
project.                                                                                                                        
                                                                                                                                
Ms.  Teshner  responded  that the  full  amount  was  almost                                                                    
$63 million to build  the school, and that  $7.1 million was                                                                    
in  addition   to  the  $43   million  already   given.  The                                                                    
understanding  was that  this was  the full  amount required                                                                    
and no more would be asked for.                                                                                                 
                                                                                                                                
Representative   Wilson   thought   it   meant   they   were                                                                    
$13 million short.                                                                                                              
                                                                                                                                
Mr. Carpenter thought she had said $53 million total.                                                                           
                                                                                                                                
Ms. Teshner clarified that she had meant $63 million.                                                                           
                                                                                                                                
Representative Wilson  asked for a  firm number so  that the                                                                    
school  would be  fully funded  and  the state  would be  in                                                                    
compliance.                                                                                                                     
                                                                                                                                
Mr. Carpenter  asked Ms. Teshner  whether she  was including                                                                    
the local match.                                                                                                                
                                                                                                                                
3:33:02 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:51:33 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair   Foster   referred   to    a   letter   from   the                                                                    
administration pertaining to the Kivalina School.                                                                               
                                                                                                                                
Representative Wilson  noted the letter was  currently being                                                                    
copied for members.                                                                                                             
                                                                                                                                
Co-Chair Foster thought the final number had been reached.                                                                      
                                                                                                                                
Representative   Wilson   explained    they   were   capital                                                                    
improvement funds and there was  a 20 percent match required                                                                    
by the  borough, which added  up to the $63  million figure.                                                                    
There was a difference between the state and borough share.                                                                     
                                                                                                                                
Vice-Chair  Gara asked  for verification  that the  road had                                                                    
not been funded in the past.                                                                                                    
                                                                                                                                
Mr. Labolle  replied that the  road had not been  funded. He                                                                    
could  not  guarantee  the   appropriation  would  fund  the                                                                    
construction of the road.                                                                                                       
                                                                                                                                
Vice-Chair  Gara  asked  about   the  Alaska  State  Trooper                                                                    
appropriation.                                                                                                                  
                                                                                                                                
Co-Chair Foster noted the issue was separate.                                                                                   
                                                                                                                                
PAT  PITNEY,  DIRECTOR,  OFFICE OF  MANAGEMENT  AND  BUDGET,                                                                    
OFFICE  OF  THE  GOVERNOR,  addressed   a  letter  from  the                                                                    
administration related to the  Kivalina School [addressed to                                                                    
Senator Anna  MacKinnon from the Department  of Law, related                                                                    
to the  Kasayulie v State  case, dated April 9,  2015, (copy                                                                    
on file)]. She stated  that making the appropriation cleaned                                                                    
up the obligation from the state for the settlement.                                                                            
                                                                                                                                
Representative Wilson read from page 2 of the letter:                                                                           
                                                                                                                                
     …another possibility that we believe fully complies                                                                        
     with the consent decree would be an appropriation,                                                                         
     effective no later than July 1, 2015, in the amount of                                                                     
     $50,475,822.  The  sum  of $50,475,822  represents  the                                                                    
     total  current  eligible  amount  the  Kivalina  School                                                                    
     could  receive, minus  the  Northwest Arctic  Borough's                                                                    
     participating share.                                                                                                       
                                                                                                                                
She  believed it  would be  the best  the legislature  would                                                                    
receive in  terms of a  guarantee. She highlighted  that the                                                                    
road was not part of it.                                                                                                        
                                                                                                                                
3:56:34 PM                                                                                                                    
                                                                                                                                
Representative Ortiz asked about  the current situation with                                                                    
the students  in the  Kivalina region.  He asked  where they                                                                    
currently attended school.                                                                                                      
                                                                                                                                
Ms. Teshner  replied the students were  continuing to attend                                                                    
school at  the existing  facility. There  were approximately                                                                    
56 unhoused students.                                                                                                           
                                                                                                                                
Representative Pruitt asked for clarification.                                                                                  
                                                                                                                                
Ms.  Teshner  answered that  at  the  time of  the  original                                                                    
application  the  Kivalina  School  had  about  56  unhoused                                                                    
students which  meant that there  had not been  enough room.                                                                    
They  were  attending,  but  they  were  over  capacity,  so                                                                    
considered  unhoused.  Hence  the  need  for  a  replacement                                                                    
school.                                                                                                                         
                                                                                                                                
Representative Wilson  shared that she had  been to Kivalina                                                                    
and the  school had to  use outbuildings. There  was another                                                                    
legal memorandum  dated April  13, 2016,  and within  it the                                                                    
November 2013  CIP priority list.  She remarked that  if the                                                                    
required  amount  was growing  by  $7 million  every two  or                                                                    
three years,  it was pretty  alarming. She  would distribute                                                                    
the document to members.                                                                                                        
                                                                                                                                
3:59:12 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Gara  spoke  to  two  increases  in  the  Senate                                                                    
capital budget.  He spoke to  an increment related  to state                                                                    
troopers.  He asked  for verification  the operating  budget                                                                    
contained funds for  20 trooper positions that  had not been                                                                    
filled.                                                                                                                         
                                                                                                                                
Ms. Pitney replied in the  affirmative. The state was having                                                                    
difficulty with trooper recruitment  and retention. Once all                                                                    
positions were filled, the administration  would be happy to                                                                    
request additional funds for troopers.                                                                                          
                                                                                                                                
Vice-Chair  Gara  did not  realize  there  were 20  unfilled                                                                    
trooper positions. He mentioned a  new 6 percent increase in                                                                    
the trooper labor contract in  the current year. He asked if                                                                    
the  state  would  still  have   the  ability  to  hire  the                                                                    
additional positions.                                                                                                           
                                                                                                                                
Ms.  Pitney answered  there was  sufficient funding  to hire                                                                    
for the positions. She added  that there had recently been a                                                                    
trooper  graduation with  only five  graduates. The  funding                                                                    
was available and it would take time to hire new troopers.                                                                      
                                                                                                                                
Vice-Chair  Gara  asked  if  Ms.  Pitney  could  confirm  in                                                                    
writing  that  there was  funding  for  20 or  however  many                                                                    
positions in  order to  have an  informed discussion  on the                                                                    
House floor.                                                                                                                    
                                                                                                                                
Ms. Pitney complied.                                                                                                            
                                                                                                                                
Representative Wilson asked if  the state library was bonded                                                                    
or had been paid for in full with different appropriations.                                                                     
                                                                                                                                
Ms. Pitney  replied it  had been  a GO  [general obligation]                                                                    
bond appropriation in 2012.                                                                                                     
                                                                                                                                
Representative  Wilson spoke  to numerous  reappropriations.                                                                    
She  wondered why  they were  not paying  off the  bond debt                                                                    
instead of reappropriating funds.                                                                                               
                                                                                                                                
Ms. Pitney  answered there was  a combination, but  the bulk                                                                    
was GO bonded.                                                                                                                  
                                                                                                                                
Representative Wilson remarked there was still had debt.                                                                        
                                                                                                                                
Representative  Ortiz  asked  for  verification  there  were                                                                    
numerous  vacant   Village  Public  Safety   Officer  (VPSO)                                                                    
positions.  He  asked if  there  was  funding available  for                                                                    
those as well.                                                                                                                  
                                                                                                                                
Ms.  Pitney  spoke  to   recruitment  challenges  with  VPSO                                                                    
positions. She  stated that the Department  of Public Safety                                                                    
(DPS) was working on that challenge.                                                                                            
                                                                                                                                
4:04:29 PM                                                                                                                    
                                                                                                                                
Mr. Labolle turned to page 76, line 12:                                                                                         
                                                                                                                                
     This   is  for   the   Alaska  class   ferry.  It's   a                                                                    
     reappropriation  for $1.2  million that  was set  aside                                                                    
     for  art in  the  original appropriation  and that  was                                                                    
     being reappropriated  to the  Alaska class  ferries for                                                                    
     equipment.                                                                                                                 
                                                                                                                                
Representative  Wilson asked  if it  meant money  originally                                                                    
for artwork could be used for other purposes.                                                                                   
                                                                                                                                
Mr.  Labolle  answered  that the  reappropriation  had  been                                                                    
requested by the department.                                                                                                    
                                                                                                                                
BRIAN  FECHTER, ANALYST,  OFFICE OF  MANAGEMENT AND  BUDGET,                                                                    
explained  that  in  statute  1  percent  of  the  value  of                                                                    
facilities had  to be  spent for  art. As  the M/V  Taku was                                                                    
being decommissioned,  the art on  the ferry could  be moved                                                                    
elsewhere.                                                                                                                      
                                                                                                                                
4:06:46 PM                                                                                                                    
                                                                                                                                
Representative Wilson  asked if the same  principle could be                                                                    
applied to other buildings.                                                                                                     
                                                                                                                                
Mr.  Fechter stated  it would  require special  language but                                                                    
art that was not displayed could be used that way.                                                                              
                                                                                                                                
Representative  Wilson  hoped  to   utilize  the  money  for                                                                    
library books and other needs.                                                                                                  
                                                                                                                                
Mr. Labolle advanced to page 76, line 20:                                                                                       
                                                                                                                                
     This  is   language  that  allows  the   department  to                                                                    
     backfill the federal  highway match if reappropriations                                                                    
     made  in  this  bill  did not  equal  the  $58  million                                                                    
     originally appropriated  in the governor's  budget. So,                                                                    
     Representative Wilson  earlier mentioned there  being a                                                                    
     number  of appropriations  in this  budget. The  Senate                                                                    
     version  of  the  bill  took  numerous  -  over  100  -                                                                    
     appropriations  to offset  general funds  that were  in                                                                    
     the  original  version of  the  bill.  Another item  to                                                                    
     discuss  ties  into that,  which  is  several of  those                                                                    
     reappropriations  were  either  not  available  or  the                                                                    
     amount  of  money was  incorrect  and  we've made  that                                                                    
     technical fix  in the  bill as  well, though  you won't                                                                    
     see  it because  you  can't show  something that's  not                                                                    
     there, so  going through that  process and  finding out                                                                    
     ok,  well  we've   identified  these  approximately  25                                                                    
     reappropriations that are not  available or the amounts                                                                    
     were incorrect,  so this language  is in there  in case                                                                    
     any  of those  remaining appropriations  were also  not                                                                    
     available or the amounts were not correct.                                                                                 
                                                                                                                                
Representative  Wilson asked  if  they  were backfilling  it                                                                    
with general funds.                                                                                                             
                                                                                                                                
Mr. Labolle replied in the affirmative.                                                                                         
                                                                                                                                
Representative Wilson asked  if DOT was required  to use the                                                                    
money only for match.                                                                                                           
                                                                                                                                
Mr.  Labolle  replied  in the  affirmative  -  it  specified                                                                    
federal highway  match. He moved  to the next change  on the                                                                    
same page:                                                                                                                      
                                                                                                                                
     This  is,  again,  the reappropriation  of  the  Alaska                                                                    
     Liquefied  Natural Gas  project and  it's $25  million.                                                                    
     The  Senate version  appropriated  that  to the  Public                                                                    
     School  Trust  Fund.  We   changed  that  language  and                                                                    
     appropriated it to the Public Education Fund.                                                                              
                                                                                                                                
Representative  Ortiz  asked if  it  had  been part  of  the                                                                    
$50 million appropriation.                                                                                                      
                                                                                                                                
4:10:27 PM                                                                                                                    
                                                                                                                                
Mr. Labolle replied that it was  $25 million and that it was                                                                    
indeed part of the $50 million appropriation.                                                                                   
                                                                                                                                
Representative  Wilson  thought  they   had  skipped  a  $10                                                                    
million appropriation for road maintenance and plowing.                                                                         
                                                                                                                                
Mr. Labolle noted no change had been made to the provision.                                                                     
                                                                                                                                
Representative   Wilson   requested   to   hear   from   the                                                                    
department. She asked how DOT  was planning on utilizing the                                                                    
funds.                                                                                                                          
                                                                                                                                
Mr. Vigue  answered that the  $10 million would be  used for                                                                    
items  which   were  not  typically  federally   funded.  He                                                                    
specified that federal funds could  not be used for potholes                                                                    
and similar maintenance items.                                                                                                  
                                                                                                                                
Representative   Wilson   asked   if  the   department   had                                                                    
maintenance  lists for  those  things  which required  state                                                                    
money.                                                                                                                          
                                                                                                                                
Mr.  Vigue replied  that DOT  had  a long  list of  deferred                                                                    
maintenance needs. He  would ensure that it  was provided to                                                                    
the legislature.                                                                                                                
                                                                                                                                
Representative  Wilson  asked  whether there  would  be  new                                                                    
hires  to accomplish  this  or whether  the  money would  be                                                                    
utilized for materials.                                                                                                         
                                                                                                                                
Mr. Vigue answered  the money would be for  current crew and                                                                    
for commodities.                                                                                                                
                                                                                                                                
4:13:12 PM                                                                                                                    
                                                                                                                                
Mr. Labolle  addressed the last  change - the  House version                                                                    
removed the  $288 million  appropriation from  the Statutory                                                                    
Budget Reserve (SBR) to the oil and gas tax credit fund.                                                                        
                                                                                                                                
Representative  Neuman  asked  for   the  page  number.  Mr.                                                                    
Labolle replied that it had been removed from the bill.                                                                         
                                                                                                                                
Representative   Neuman   asked   for  a   repeat   of   the                                                                    
information. Mr. Labolle complied.                                                                                              
                                                                                                                                
Representative  Pruitt asked  where  that  left the  state's                                                                    
remaining  obligation.  Mr.  Labolle  replied  that  it  was                                                                    
approximately $1 billion.                                                                                                       
                                                                                                                                
Representative Neuman asked if  $288 million remained in the                                                                    
SBR. Mr. Labolle replied in the affirmative.                                                                                    
                                                                                                                                
4:14:56 PM                                                                                                                    
                                                                                                                                
Representative  Wilson asked  about  the difference  between                                                                    
the Public School Trust Fund and the Public Education Fund.                                                                     
                                                                                                                                
Mr. Labolle replied  that the trust fund put  out money used                                                                    
for  education   versus  the  public  education   fund  that                                                                    
directly paid for the Base Student Allocation (BSA).                                                                            
                                                                                                                                
Ms. Teshner asked for clarification on the question.                                                                            
                                                                                                                                
Representative Wilson  spoke to the funding  change from the                                                                    
Public School Trust  Fund to the Public  Education Fund. She                                                                    
wanted to know the difference was between the two funds.                                                                        
                                                                                                                                
Ms. Teshner  replied that the  public school trust  fund was                                                                    
managed by  DOR and had to  do with income from  the sale or                                                                    
lease  of land  through an  act of  Congress. The  education                                                                    
fund  was  the  mechanism  paying  for  the  BSA  and  pupil                                                                    
transportation.                                                                                                                 
                                                                                                                                
Co-Chair Foster asked for verification  the BSA was paid out                                                                    
of that.                                                                                                                        
                                                                                                                                
Ms. Teshner replied in the affirmative.                                                                                         
                                                                                                                                
Representative  Wilson  asked  for verification  that  funds                                                                    
were not  typically put into  the trust fund, only  into the                                                                    
education fund.                                                                                                                 
                                                                                                                                
Ms. Teshner  answered in the  affirmative. She  detailed the                                                                    
trust  was  the  investment,  used   to  help  pay  for  the                                                                    
foundation program.                                                                                                             
                                                                                                                                
4:17:31 PM                                                                                                                    
                                                                                                                                
Representative Neuman  believed when the  federal government                                                                    
gave  Alaska its  portion  of federal  lands,  part of  that                                                                    
money went into the "Public Trust School Education Fund."                                                                       
                                                                                                                                
Representative Pruitt  asked about  reappropriation language                                                                    
very similar to  what had originally been  in the governor's                                                                    
budget  related to  the Juneau  Access project.  He believed                                                                    
the  governor  was  not  opposed  to  Senate  language  that                                                                    
removed the item from the budget. He asked for detail.                                                                          
                                                                                                                                
Ms. Pitney  answered that  the governor  was not  opposed to                                                                    
the  Senate's action.  The Senate  left the  funding in  the                                                                    
project.                                                                                                                        
                                                                                                                                
Representative  Pruitt  noted  the funds  were  intended  to                                                                    
match other  federal money. He  asked for the  total project                                                                    
cost.                                                                                                                           
                                                                                                                                
Ms. Pitney believed the total  project cost was estimated at                                                                    
$550  million  -  others  had estimated  it  would  be  $750                                                                    
million. It did not impact the federal matching funds.                                                                          
                                                                                                                                
4:20:31 PM                                                                                                                    
                                                                                                                                
Representative  Pruitt clarified  that  no additional  money                                                                    
was  needed.   He  asked   for  confirmation   that  state's                                                                    
obligation was complete and the  reset would be fulfilled by                                                                    
federal money.                                                                                                                  
                                                                                                                                
Ms. Pitney responded it depended  on the total project cost.                                                                    
Through the  highway process, the selection  of the no-build                                                                    
option had been submitted.                                                                                                      
                                                                                                                                
Representative  Pruitt stated  that the  City of  Juneau and                                                                    
City Assembly  had recently passed  a resolution  of support                                                                    
for the project that had been sent to the governor.                                                                             
                                                                                                                                
Ms.  Pitney replied  that the  governor understood  that the                                                                    
City of Juneau was in support of the project.                                                                                   
                                                                                                                                
Vice-Chair  Gara  verified  that adding  the  Juneau  Access                                                                    
project  would not  increase the  amount of  federal funding                                                                    
coming in.                                                                                                                      
                                                                                                                                
Ms. Pitney replied in the affirmative.                                                                                          
                                                                                                                                
Vice-Chair  Gara  surmised in  the  future  a future  Juneau                                                                    
access  road  would take  federal  funds  away from  another                                                                    
project.                                                                                                                        
                                                                                                                                
Ms. Pitney answered in the affirmative.                                                                                         
                                                                                                                                
Vice-Chair  Gara asked  for verification  that the  governor                                                                    
had not  been planning on  spending funds on the  project in                                                                    
the current year because the project had been put on halt.                                                                      
                                                                                                                                
Ms. Pitney answered in the affirmative.                                                                                         
                                                                                                                                
Vice-Chair Gara surmised  if the money were put  back in the                                                                    
fund, that project would still be on halt.                                                                                      
                                                                                                                                
Ms.  Pitney  answered  it  would take  a  reopening  of  the                                                                    
project and  review, which would take  a considerable amount                                                                    
of  time. The  money  was  to stay  in  the  bank with  that                                                                    
project name on it.                                                                                                             
                                                                                                                                
Representative   Neuman   thought   there  had   been   some                                                                    
misinformation  stated.  He  spoke   to  the  Juneau  Access                                                                    
project and  the Knik Arm  Bridge project. He  had submitted                                                                    
letters to the  governor from the then  DOT commissioner and                                                                    
the chief planner, Mr. Otteson,  both stating there would be                                                                    
no issue  of losing  federal funding at  the time  for other                                                                    
state  projects.  The Statewide  Transportation  Improvement                                                                    
Program (STIP)  would be re-evaluated  but would  not remove                                                                    
funds from any project in the state.                                                                                            
                                                                                                                                
Representative  Pruitt  wanted  to  confirm  there  was  not                                                                    
another $500  million project the  funds would be  moved to.                                                                    
He stated  there were  not that many  large project  so this                                                                    
would impact federal funds.                                                                                                     
                                                                                                                                
4:25:12 PM                                                                                                                    
                                                                                                                                
Co-Chair  Seaton asked  about  the approximate  size of  the                                                                    
STIP.  He wondered  if it  was  large enough  to absorb  any                                                                    
funds in the project.                                                                                                           
                                                                                                                                
Ms.  Pitney answered  that her  colleague Mr.  Vigue had  to                                                                    
ensure  projects  were moving  and  that  more were  in  the                                                                    
pipeline. The  department planned not to  have any available                                                                    
federal funds not utilized in the state.                                                                                        
                                                                                                                                
Representative Pruitt countered there  were a limited number                                                                    
of projects for which federal funds were available.                                                                             
                                                                                                                                
Ms.  Pitney  answered  there  were   more  projects  on  the                                                                    
planning  list for  transportation  than  there was  federal                                                                    
funding available.  The department consciously  maintained a                                                                    
larger list  in the event a  project higher on the  list ran                                                                    
into  problems.  There  were enough  priorities  to  utilize                                                                    
federal funds  for the  timeframe of the  STIP, which  was a                                                                    
six-year outlook.                                                                                                               
                                                                                                                                
4:27:25 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  asked LFD  for  the  amounts in  the                                                                    
Public Education Fund and in the trust fund.                                                                                    
                                                                                                                                
Co-Chair Foster  noted the committee  would recess  prior to                                                                    
taking up amendments.                                                                                                           
                                                                                                                                
Representative   Pruitt  asked   whether   there  would   be                                                                    
flexibility  regarding format  and submission  of conceptual                                                                    
amendments.                                                                                                                     
                                                                                                                                
Co-Chair   Foster  responded   there  had   been  amendments                                                                    
submitted to  a prior version  of the bill and  whether they                                                                    
would  match  up would  be  addressed  by Legislative  Legal                                                                    
Services.                                                                                                                       
                                                                                                                                
Representative   Pruitt   explained   there   were   several                                                                    
substantial  changes  in  the CS.  He  believed  there  were                                                                    
members with  concerns about  having amendments  prepared to                                                                    
meet the timeframe.                                                                                                             
                                                                                                                                
4:30:43 PM                                                                                                                    
                                                                                                                                
Co-Chair   Foster   stated   there   were   currently   four                                                                    
amendments. He  understood the timeline  was very  short and                                                                    
would allow amendments up until 2 p.m.                                                                                          
                                                                                                                                
4:31:14 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:36:00 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Foster  noted the meeting  would recess  to address                                                                    
some of the issues discussed during the meeting.                                                                                
                                                                                                                                
4:36:20 PM                                                                                                                    
RECESSED                                                                                                                        
                                                                                                                                
10:04:11 PM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Foster relayed the meeting  would recess until 2:00                                                                    
p.m. the following day.                                                                                                         
                                                                                                                                
Co-Chair Seaton  relayed that the  committee was  waiting on                                                                    
the drafting of amendments.                                                                                                     
                                                                                                                                
[Note: Meeting  Reconvened the  following day,  see separate                                                                    
minutes  document  dated June  11,  2017  at 2:00  p.m.  for                                                                    
detail.]                                                                                                                        
                                                                                                                                

Document Name Date/Time Subjects
SB 23 version T.pdf HFIN 6/10/2017 10:00:00 AM
SB 23
SB 23 DOL Letter RE Kasayulie v. State.pdf HFIN 6/10/2017 10:00:00 AM
SB 23
SB 23 - Amendment packet v. T.pdf HFIN 6/10/2017 10:00:00 AM
SB 23