Legislature(2021 - 2022)ADAMS 519

05/04/2021 01:30 PM House FINANCE

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01:33:16 PM Start
01:34:00 PM HB70
02:14:54 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
+ Overview: Capitol Budget by Neil Steininger, TELECONFERENCED
Director, Office of Management & Budget
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 70                                                                                                             
     "An  Act   making  appropriations,   including  capital                                                                    
     appropriations,     reappropriations,     and     other                                                                    
     appropriations;  making   supplemental  appropriations;                                                                    
     making   appropriations   to  capitalize   funds;   and                                                                    
     providing for an effective date."                                                                                          
1:34:00 PM                                                                                                                    
NEIL STEININGER, DIRECTOR, OFFICE  OF MANAGEMENT AND BUDGET,                                                                    
OFFICE   OF   THE    GOVERNOR,   introduced   a   PowerPoint                                                                    
presentation titled  "State of  Alaska Office  of Management                                                                    
and   Budget:  House   Finance   Committee  FY2022   Capital                                                                    
Overview: HB  68, HB 70,  HB 71, HB  84," dated May  4, 2021                                                                    
(copy  on file).  He began  on slide  2 and  explained there                                                                    
were  capital  budget  items  across  several  appropriation                                                                    
vehicles introduced by the governor.  He detailed that HB 70                                                                    
was the governor's  standard FY 22 capital budget  and HB 71                                                                    
was  the mental  health  budget inclusive  of mental  health                                                                    
capital  items.  He  elaborated that  HB  70  included  some                                                                    
supplemental  capital  items  effective  in  FY  21,  HB  68                                                                    
represented  the fast  track supplemental  items, and  HB 84                                                                    
represented regular supplemental items.                                                                                         
Mr. Steininger reported that the  FY 22 total was just under                                                                    
$1.5 billion  in capital projects,  of which,  $62.2 million                                                                    
was funded with unrestricted  general funds (UGF). He listed                                                                    
the FY 21 supplemental items  at slightly over $142 million.                                                                    
He characterized the net reduction  in FY 21 UGF spending as                                                                    
a bit of  a misnomer. He explained that the  reduction was a                                                                    
repeal of prior year capital  projects completed on time and                                                                    
under  budget. He  elaborated that  the money  was deposited                                                                    
into the  Alaska Capitol Income  Fund. He detailed  that the                                                                    
deposit appeared as a positive  in the operating budget; the                                                                    
reduction was netted out with  the positive in the operating                                                                    
budget and  showed up  in the  capital budget  as designated                                                                    
general   fund   (DGF)   spending  primarily   on   deferred                                                                    
1:35:57 PM                                                                                                                    
Mr. Steininger  turned to slide  3 and addressed  a deferred                                                                    
maintenance backlog  facing the  state. He  highlighted that                                                                    
capital budget proposals showed  a fairly significant sum of                                                                    
money  dedicated   to  deferred   maintenance  due   to  the                                                                    
substantial  backlog of  just under  $600 million  excluding                                                                    
the university.  The number  was about  $2 billion  with the                                                                    
inclusion of  university facilities.  He explained  that the                                                                    
university had  been excluded from the  deferred maintenance                                                                    
numbers shown on slide 3  because the university tracked its                                                                    
deferred  maintenance separately  and  it did  not show  the                                                                    
scale  of the  distribution nearly  as  well to  add a  $1.4                                                                    
billion  column. He  pointed out  that the  majority of  the                                                                    
backlog was located in the  Department of Transportation and                                                                    
Public  Facilities (DOT).  The second  largest backlog  fell                                                                    
under  the  Department  of Administration  (DOA)  given  the                                                                    
department's  responsibility   for  managing  many   of  the                                                                    
state's office  buildings. He remarked that  agencies with a                                                                    
greater  number  of facilities  tended  to  have more  of  a                                                                    
backlog in deferred maintenance.                                                                                                
Co-Chair Merrick  asked about a  breakdown for  DOT deferred                                                                    
maintenance  in   terms  of  facilities  versus   roads  and                                                                    
Mr.  Steininger replied  that he  would follow  up with  the                                                                    
1:37:39 PM                                                                                                                    
Mr.   Steininger  reported   that  the   administration  had                                                                    
allocated   just   under    $65   million   across   several                                                                    
appropriation  vehicles  in  proposed  deferred  maintenance                                                                    
spending.  He detailed  that about  $13.4  million had  been                                                                    
included  as fast  track  supplemental  items. He  explained                                                                    
that   there  had   been  no   appropriation  for   deferred                                                                    
maintenance  expenditures in  the FY  21 capital  budget. He                                                                    
elaborated that  with the understanding that  a supplemental                                                                    
bill   would   not   pass  early   in   the   session,   the                                                                    
administration had  allocated the  majority of  the deferred                                                                    
maintenance  proposals into  FY  22. He  noted that  certain                                                                    
projects had  been included in  the fast  track supplemental                                                                    
that  would  enable projects  to  begin  once the  bill  had                                                                    
passed. The  slide showed a breakdown  of statewide deferred                                                                    
maintenance  for general  state  buildings, public  building                                                                    
fund (primarily office buildings,  and court facilities that                                                                    
were managed separately).                                                                                                       
Co-Chair  Merrick noted  that  Representative Carpenter  had                                                                    
joined the meeting.                                                                                                             
Mr.  Steininger turned  to slide  5  and provided  an FY  22                                                                    
capital budget  snapshot by department. He  highlighted that                                                                    
the largest  percentage of  the funds  were directed  to DOT                                                                    
for the Surface  Transportation Infrastructure Program (sic)                                                                    
[Statewide  Transportation Improvement  Program (STIP)].  He                                                                    
pointed to a larger dollar  figure in the "FY22 Other" funds                                                                    
column than was typical in  the capital budget. He explained                                                                    
that part  of the  proposal was  to utilize  bonding through                                                                    
the Alaska  Housing Finance Corporation  (AHFC) to  fund the                                                                    
state   match  requirements   of  the   STIP,  the   Airport                                                                    
Improvement Program, and the Village  Safe Water Program. He                                                                    
explained that  the aforementioned  programs were  the areas                                                                    
with  the most  significant  federal match  on General  Fund                                                                    
dollar  spending. The  administration's  proposal would  use                                                                    
AHFC  bonding in  order to  take advantage  of low  interest                                                                    
rates to meet the need.                                                                                                         
Vice-Chair  Ortiz looked  at slides  4  and 5  and asked  if                                                                    
deferred maintenance  for statewide schools was  included in                                                                    
the figures.                                                                                                                    
Mr. Steininger  noted that the presentation  did not include                                                                    
any of  the general obligation bond  proposals. He explained                                                                    
that  the AFHC  bond  proposals were  included because  they                                                                    
were in  the governor's standard capital  budget. He relayed                                                                    
that  the general  obligation bond  proposal put  forward by                                                                    
the  administration  addressed   school  major  maintenance;                                                                    
however, it was  not included in the  normal capital budget.                                                                    
He  elaborated  that  the   administration  had  a  separate                                                                    
proposal to address the need,  which was not included in the                                                                    
current presentation.                                                                                                           
1:40:58 PM                                                                                                                    
Representative   Josephson   referred  to   the   governor's                                                                    
proposal to fund three items  with an AHFC bond proposal. He                                                                    
recalled the Village Safe Water  Program as one of the items                                                                    
and asked Mr. Steininger to repeat the first two.                                                                               
Mr.  Steininger  replied  that  the  other  items  were  the                                                                    
Airport Improvement Program  and the STIP. He  noted the two                                                                    
items were the primary DOT capital programs.                                                                                    
Co-Chair Merrick  asked for clarification on  the meaning of                                                                    
Mr. Steininger  answered that the  STIP was the  DOT program                                                                    
responsible  for  building and  improving  most  of the  DOT                                                                    
owned  roads throughout  the state.  He detailed  that there                                                                    
was  a  90/10  match  (90 percent  federal  and  10  percent                                                                    
Co-Chair Merrick asked how STIP projects were prioritized.                                                                      
Mr. Steininger provided  a high level answer  and noted that                                                                    
DOT  could  give more  detail.  He  explained there  was  an                                                                    
annual process  where DOT ranked  the projects and  put them                                                                    
on the STIP with cost  estimates. He expounded that the list                                                                    
was sent to the Federal Highway Administration for review.                                                                      
Co-Chair  Merrick  noted  DOT would  address  the  committee                                                                    
later in the week.                                                                                                              
Mr. Steininger turned  to slide 6 and  addressed projects by                                                                    
department  beginning  with   the  Department  of  Commerce,                                                                    
Community and Economic Development  (DCCED). He relayed that                                                                    
projects  included in  the FY  22  capital budget  primarily                                                                    
were standard  projects included annually such  as community                                                                    
block  grants  and   the  Natural  Petroleum  Reserve-Alaska                                                                    
(NPRA)  Impact   Grant  Program.  He  elaborated   that  the                                                                    
projects  recurred  annually  and  generally  had  a  fairly                                                                    
generous federal to state ratio.  He highlighted there was a                                                                    
substantial amount  of federal  funding for  community block                                                                    
grants [$60  million] with very little  state match required                                                                    
[$6 million].                                                                                                                   
Mr.  Steininger continued  to address  slide  6. He  relayed                                                                    
there  were fewer  opportunities  for discretionary  capital                                                                    
spending,  meaning  most  projects  relied  on  the  federal                                                                    
match. He  noted he would  bring attention to  new, one-time                                                                    
projects throughout  the presentation. He pointed  to item 3                                                                    
showing  an increment  for the  replacement  of the  Alcohol                                                                    
Marijuana  Control  Office  (AMCO)  case  management  system                                                                    
funded with 50 percent UGF  and 50 percent program receipts.                                                                    
He highlighted  item 8  showing a $5  million grant  for the                                                                    
Alaska Travel Industry Association  (ATIA). He remarked that                                                                    
the  slide reflected  the governor's  December proposal  and                                                                    
subsequent amendments. He explained  that some of the items,                                                                    
like  the grant  to ATIA,  may be  accomplished through  the                                                                    
plans  the state  had been  working  to develop  for use  of                                                                    
federal  relief.  He   referenced  discussion  around  using                                                                    
American  Rescue   Plan  Act  (ARPA)  funding   for  tourism                                                                    
marketing and  noted there may  be some  discretionary items                                                                    
that could fit  within the category - details  that were not                                                                    
known when the budget had been developed.                                                                                       
1:44:52 PM                                                                                                                    
Co-Chair  Foster looked  at item  6 on  slide 6  showing $13                                                                    
million  for  bulk  fuel  upgrades   in  the  Alaska  Energy                                                                    
Authority  (AEA)   partially  funded   by  the   Power  Cost                                                                    
Equalization  (PCE)   endowment.  He  stated   that  statute                                                                    
outlined  uses for  PCE funds.  He referenced  the waterfall                                                                    
funding  structure. He  explained  that  originally PCE  was                                                                    
intended solely  for the PCE  Fund for energy  assistance in                                                                    
rural Alaska. He  detailed that several years  back a change                                                                    
had been made  that enabled any leftover funding  to be used                                                                    
for community  assistance. He elaborated that  any remaining                                                                    
funding could  then go toward  renewable energy  within AEA.                                                                    
He  asked   if  the  administration  considered   bulk  fuel                                                                    
upgrades   to   be   part   of   AEA's   renewable   energy.                                                                    
Alternatively,  he asked  if  the item  was  outside of  the                                                                    
scope  of all  three.  He asked  about the  administration's                                                                    
thoughts on using PCE funds for the highlighted purpose.                                                                        
Mr. Steininger  explained that based on  the available funds                                                                    
in  the CBR  and available  revenues to  the state  when the                                                                    
budget  had been  developed, the  administration had  looked                                                                    
for fund  sources to satisfy some  of the needs that  may be                                                                    
slightly  outside  of  the statutory  designation  but  that                                                                    
still  fit  within the  goal  of  reducing power  costs.  He                                                                    
explained that the  fund source had been selected  due to an                                                                    
unavailability of UGF when the budget had been drafted.                                                                         
1:46:53 PM                                                                                                                    
Mr.  Steininger moved  to the  Department of  Corrections on                                                                    
slide 7. The bill would  allow for the installation of seven                                                                    
new facility  body scanners at  a cost of $1.5  million UGF.                                                                    
He noted that the request put  forward the past year had not                                                                    
been accommodated  when the capital  budget had  been merged                                                                    
into the  operating budget. The  bill included  $1.5 million                                                                    
for   the   Point   Mackenzie  Correctional   Farm   Produce                                                                    
Processing  Plant. The  increment would  allow the  plant to                                                                    
distribute  produce  grown  at   Point  Mackenzie  to  other                                                                    
prisons.  He briefly  highlighted  four standard  increments                                                                    
for  the Department  of  Environmental  Conservation on  the                                                                    
second half  of the  slide, including clean  water, drinking                                                                    
water,  and  two  components  for  the  Village  Safe  Water                                                                    
Mr. Steininger moved to slide  8 and reviewed the Department                                                                    
of Fish and  Game (DFG) capital budget items.  He pointed to                                                                    
two funding  increments to address the  Pacific cod disaster                                                                    
and 2018  Sockeye salmon disaster.  Item 3  included federal                                                                    
and General Fund match in  addition to $750,000 UGF to allow                                                                    
the state  to research  species that  may be  considered for                                                                    
the Endangered  Species Act. The  funding would  also enable                                                                    
the  state to  do work  (funded by  the federal  government)                                                                    
related to species placed under  the Endangered Species Act.                                                                    
He highlighted items 8 and 9  as the standard sport fish and                                                                    
wildlife management  projects matched with funding  from the                                                                    
Fish and Game Fund.                                                                                                             
Mr. Steininger  continued to review DFG  increments on slide                                                                    
8.  He  pointed  out facility  maintenance  and  improvement                                                                    
items including  the Copper River  boat launch (item  5). He                                                                    
noted  that  item  6 -  facilities,  vessels,  and  aircraft                                                                    
maintenance repair  and upgrades  - had been  separated from                                                                    
the  main  deferred  maintenance appropriation  because  the                                                                    
main appropriation  tended to focus on  state facilities. He                                                                    
elaborated that  a direct appropriation  to DFG  enabled the                                                                    
department  to use  the funding  for maintenance  on vessels                                                                    
and aircraft  that were often  left out of  discussions that                                                                    
typically related to vertical facilities.                                                                                       
1:49:46 PM                                                                                                                    
Mr. Steininger advanced  to slide 9 and  reviewed the Office                                                                    
of   the  Governor   items   including  statewide   deferred                                                                    
maintenance. He  elaborated that  the increment  allowed the                                                                    
governor's office  to prioritize  projects across  all state                                                                    
agencies. He  explained that  many agencies  had facilities.                                                                    
The  goal was  to ensure  that money  was being  directed to                                                                    
deferred  maintenance projects  at the  highest need  of the                                                                    
state.  Item 2  was a  capital project  for the  Division of                                                                    
Elections to implement 2020 Ballot Measure 2.                                                                                   
Mr. Steininger  addressed items in the  Department of Health                                                                    
and  Social Services  (DHSS)  budget on  slide  9. He  noted                                                                    
there were several items that  were not necessarily deferred                                                                    
maintenance but  needed work at  some of the  facilities run                                                                    
by DHSS including the Ketchikan  Pioneer Home and the Palmer                                                                    
Veterans and Pioneer  Home. Item 3 was  an appropriation for                                                                    
the Health  Information Exchange,  often called  the Hi-Tech                                                                    
program. He noted  the program was in its last  year and the                                                                    
appropriation  would be  the final  funding. He  highlighted                                                                    
item  9,  a reappropriation  to  capital  projects from  the                                                                    
Office of the Governor. He  detailed that several years back                                                                    
a few information technology  projects had been appropriated                                                                    
to the Office of the  Governor for other state agencies. The                                                                    
administration  had discovered  that the  change had  slowed                                                                    
the process down instead  of providing additional management                                                                    
oversight; therefore, the  authority would be reappropriated                                                                    
to the managing departments.                                                                                                    
1:51:51 PM                                                                                                                    
Mr.  Steininger   reviewed  items  for  the   Department  of                                                                    
Military  and  Veterans  Affairs  (DMVA)  on  slide  10.  He                                                                    
reviewed  item 2,  an increment  for  the mass  notification                                                                    
system  for Joint  Base Elmendorf  Richardson ($2.5  million                                                                    
General Fund  match/$2.5 million  federal receipts).  Item 3                                                                    
was  an  increment  for   Joint  Base  Elmendorf  Richardson                                                                    
digital  control, generator,  and preventative  maintenance.                                                                    
He noted  that some of  the maintenance items for  DMVA were                                                                    
separately appropriated  outside of the  statewide increment                                                                    
because  DMVA was  often able  to leverage  federal receipts                                                                    
for facility maintenance.                                                                                                       
Representative Wool asked about  projects on military bases.                                                                    
He asked  when the state  was responsible to pay  for things                                                                    
on federal military bases.                                                                                                      
Mr.  Steininger answered  that because  there  was a  shared                                                                    
state  responsibility with  DMVA, there  were facilities  on                                                                    
the base that  were used by DMVA. He noted  there was also a                                                                    
shared responsibility  included in the operating  budget for                                                                    
some of  the maintenance.  He elaborated  that it  could get                                                                    
complicated because  some of the maintenance  was completely                                                                    
paid for within the [U.S.]  Department of Defense budget and                                                                    
did not flow through the  state. He explained that the items                                                                    
on slide  10 reflected facilities the  state was responsible                                                                    
for that had some shared costs with the federal government.                                                                     
Mr. Steininger moved  to slide 11 and reviewed  items in the                                                                    
Department   of   Natural   Resources   (DNR)   budget.   He                                                                    
highlighted  a  $4.5  million  specialty  agricultural  crop                                                                    
block  grant (item  1).  Item 2  was  for critical  minerals                                                                    
mapping  referred  to  as Earth  MRI  (previously  known  as                                                                    
3DEEP). Item 4  was an increment for  geological mapping for                                                                    
energy development.  He explained  that items  2 and  4 used                                                                    
general  funds  to  leverage  federal   match.  Item  5  was                                                                    
Cooperative Water  Resource Program Pass-through  funding to                                                                    
USGS for  Stream Gaging  Projects. Item  7 was  an increment                                                                    
related   to  land   sales  and   the  development   of  new                                                                    
subdivisions funded  with state land disposal  income (money                                                                    
received  when state  land was  sold  - a  portion of  which                                                                    
could be  used to promote and  manage the sale of  new state                                                                    
1:55:04 PM                                                                                                                    
Mr.  Steininger continued  to review  the items  in the  DNR                                                                    
budget on  slide 12. Item  10 was an increment  for national                                                                    
recreational  trails that  was  primarily federally  funded,                                                                    
but also used some Parks  Division receipts. Item 11 was for                                                                    
state  park  electronic  fee stations.  He  elaborated  that                                                                    
previous  appropriations used  for  building electronic  fee                                                                    
stations had shown some successes  in the collection of fees                                                                    
without as  much involvement by parks  staff. He highlighted                                                                    
the  Kenai  River  Bookey Parcel  Purchase  and  Eagle  Rock                                                                    
Bookey Parcel  Improvements paid  for with Exxon  Valdez Oil                                                                    
Spill Settlement (EVOSS) funds.                                                                                                 
Mr. Steininger  addressed items in the  Department of Public                                                                    
Safety  (DPS) budget  on the  second  half of  slide 12.  He                                                                    
relayed that  DPS marine fisheries patrol  improvements were                                                                    
funded by federal receipts. The  budget included funding for                                                                    
equipment replacement  at the  state crime  laboratory (item                                                                    
3) to  ensure the lab was  up to date in  providing adequate                                                                    
evidence  for cases.  The budget  also included  funding for                                                                    
the  replacement of  worn or  outdated  field equipment  for                                                                    
wildlife troopers and state troopers.                                                                                           
1:56:50 PM                                                                                                                    
Mr. Steininger  turned to  slides 13  and reviewed  items in                                                                    
the Department  of Revenue (DOR)  budget. Items 1  through 9                                                                    
were   all  Alaska   Housing   Finance  Corporation   (AHFC)                                                                    
appropriations for housing  programs including rental relief                                                                    
assistance,  teacher  and  health housing,  senior  housing,                                                                    
energy efficiency, and various  grants for different housing                                                                    
related  items. He  continued to  slide  14 and  highlighted                                                                    
three additional AHFC energy efficiency programs.                                                                               
Mr. Steininger  looked at  the Department  of Transportation                                                                    
and Public Facilities (DOT) budget  items on the second half                                                                    
of slide  14. He highlighted  funding for the third  year of                                                                    
the  computerized  maintenance   management  system  in  the                                                                    
amount of  $1.5 million UGF.  He detailed that  the software                                                                    
system was used to categorize  and rank maintenance of state                                                                    
facilities  and  inform  the decision  on  the  $49  million                                                                    
appropriation to  the Office of  the Governor  for statewide                                                                    
deferred maintenance.  He briefly  noted there  were several                                                                    
weigh stations  needing repair and replacement  [item 2] and                                                                    
$15  million  for typical  annual  vessel  overhaul for  the                                                                    
Alaska Marine Highway System.                                                                                                   
1:58:20 PM                                                                                                                    
Representative  Edgmon  looked   at  the  AHFC  supplemental                                                                    
housing  development  program  on  slide 13.  He  had  heard                                                                    
concerns  that  the  budget   underfunded  the  program.  He                                                                    
detailed  that AHFC  was able  to  effectively leverage  the                                                                    
program   and  fully   funding   the   program  returned   a                                                                    
considerable amount  of work  and effort.  He looked  at the                                                                    
AHFC energy  programs weatherization increment (item  10) at                                                                    
the  top  of  slide  14.  He remarked  that  the  state  was                                                                    
challenged for funding, but in  an ideal world the increment                                                                    
would  be much  higher.  He stressed  that  the program  had                                                                    
tremendous value in terms of  jobs and economic development.                                                                    
He shared that  the program resulted in  energy cost savings                                                                    
of 30 to 40 percent in homes.                                                                                                   
Vice-Chair  Ortiz  asked   Representative  Edgmon  what  the                                                                    
weatherization program funding level  had been in past years                                                                    
when there had been more UGF available.                                                                                         
Representative Edgmon  answered that in 2008  and 2009 there                                                                    
had been  $300 million  in the program  when oil  prices had                                                                    
been  around $146  to $147  [per barrel].  He reported  that                                                                    
approximately 15 percent of the  homes in the state had been                                                                    
weatherized. He stressed  it had been a  tremendous value in                                                                    
his region  where there were  many older homes.  He detailed                                                                    
that  the program  had resulted  in jobs  and value  for the                                                                    
Representative LeBon  looked at  DPS items  on slide  12. He                                                                    
reported  that  the  [House Finance]  DPS  subcommittee  had                                                                    
looked at  a request for  nearly $1.5 million  for vehicles,                                                                    
radios,  and  other  safety  equipment  items  that  it  had                                                                    
declined to  fund in the  operating budget. He asked  if the                                                                    
capital budget  request was  to offset  the action  taken by                                                                    
the subcommittee.  He asked if  there was any  connection to                                                                    
the action.                                                                                                                     
Mr.  Steininger  answered there  was  no  connection to  the                                                                    
action  taken  by the  DPS  subcommittee,  but there  was  a                                                                    
connection  to the  original  proposal.  He elaborated  that                                                                    
addressing how the state managed  the cost of replacement of                                                                    
worn  out  equipment for  troopers  could  be considered  an                                                                    
ongoing  operating  cost.  The  capital  budget  item  would                                                                    
enable  the  troopers  to  catch  up  with  some  needs.  He                                                                    
explained  that the  proposal  to add  funding  to the  base                                                                    
budget  would  have  baked  in  the  funding  as  an  annual                                                                    
operating cost.                                                                                                                 
Representative LeBon  surmised that if the  subcommittee had                                                                    
approved $1.5  million, the $500,000 increment  would not be                                                                    
included in the capital budget.                                                                                                 
2:01:45 PM                                                                                                                    
Mr. Steininger advanced to a  continuation of DOT increments                                                                    
on  slide 15.  The slide  included funding  for the  airport                                                                    
improvement  program  and  STIP.  Items 6  and  8  were  the                                                                    
associated federal  receipts with  the state match  shown in                                                                    
items 9 and 10 as AHFC bonds.  He noted that the use of AHFC                                                                    
bonding  required passage  of a  separate bill  to authorize                                                                    
the issuance  of the bonds.  The slide included a  couple of                                                                    
standard   projects  such   as  the   international  airport                                                                    
systems,  federal emergency  projects,  and Federal  Transit                                                                    
Administration (FTA)  grants. He noted  that item 14  on the                                                                    
slide did  not reflect a  late amendment put forward  by the                                                                    
administration  the previous  day that  would raise  the FTA                                                                    
grant amount to $30 million.                                                                                                    
2:03:25 PM                                                                                                                    
Mr. Steininger  continued to review  DOT items on  slide 16.                                                                    
He  highlighted a  mental health  coordinated transportation                                                                    
project annually  recurring in the mental  health budget. He                                                                    
moved  to  item 18,  an  increment  for the  Anton  Anderson                                                                    
Memorial and Portage Lake  Tunnel capital improvements using                                                                    
tunnel  toll receipts.  Additionally, the  slide included  a                                                                    
reappropriation  of capital  projects  from DOA  to DOT  for                                                                    
capital  projects  on  public building  fund  buildings.  He                                                                    
expounded  that  with  the  proposed  shift  of  the  public                                                                    
building  fund  management  to  DOT,  it  was  necessary  to                                                                    
reassign some  of the older  capital projects that  were not                                                                    
yet complete to DOT management.                                                                                                 
Mr. Steininger briefly highlighted  the one request from the                                                                    
Alaska Court  System for  statewide deferred  maintenance on                                                                    
court-owned facilities [on slide 16].                                                                                           
2:04:15 PM                                                                                                                    
Representative LeBon  looked at  slide 13 and  mentioned the                                                                    
Cold Climate  Research Center in Fairbanks  located near the                                                                    
University of  Alaska. He recalled  hearing the  program had                                                                    
received AHFC funding.                                                                                                          
Mr.  Steininger  believed  the  program  had  received  AHFC                                                                    
funding directly  in the  past. He would  have to  follow up                                                                    
with funding history details.                                                                                                   
Representative LeBon  believed the AHFC dividend  included a                                                                    
carve out for the Cold Climate Research Center.                                                                                 
Mr. Steininger  responded that he  would follow up  with the                                                                    
Mr. Steininger addressed a table  showing FY 21 supplemental                                                                    
capital projects  on slide  18. He  noted that  the negative                                                                    
amounts  in   the  table  represented   reappropriations  of                                                                    
capital projects  completed under budget. He  expounded that                                                                    
the funds primarily  went to the Alaska  Capital Income Fund                                                                    
to support deferred maintenance projects.                                                                                       
2:06:24 PM                                                                                                                    
Mr.  Steininger  turned  to  slide  19  showing  outstanding                                                                    
supplemental  capital projects  that  were not  incorporated                                                                    
into  the  operating budget.  He  noted  that the  operating                                                                    
budget  had   included  quite  a   few  of   the  governor's                                                                    
supplemental  requests.   He  highlighted  a   $1.5  million                                                                    
increment   for  deferred   maintenance   on  court   system                                                                    
buildings,  $500,000  to  cover DFG  facility,  vessel,  and                                                                    
aircraft   maintenance,  and   $5.9   million  for   general                                                                    
statewide  deferred  maintenance.  He noted  that  the  $5.9                                                                    
million  for  deferred  maintenance was  significantly  less                                                                    
than the  funding in  the FY  22 budget  to account  for the                                                                    
fact that the administration would  only be able to deploy a                                                                    
small  amount of  the money  in the  timing provided  once a                                                                    
supplemental bill  passed. However,  there were  more urgent                                                                    
deferred   maintenance  needs   or  items   that  could   be                                                                    
benefitted by starting prior to July 1.                                                                                         
2:07:40 PM                                                                                                                    
Mr. Steininger advanced to slide  20 and continued reviewing                                                                    
outstanding supplemental capital  projects. He highlighted a                                                                    
$4 million  capital project  for DOL  prosecutor recruitment                                                                    
and housing.  The increment was  related to the  increase in                                                                    
prosecutor  positions  in the  FY  22  budget to  allow  for                                                                    
advance recruiting. He reported  that several items included                                                                    
in  the FY  21  budget  request for  DMVA  had  not made  it                                                                    
through  the budget  process due  to the  truncated session;                                                                    
therefore, the  administration had put the  items forward in                                                                    
the supplemental budget. He detailed  that most of the items                                                                    
were maintenance  related for DMVA facilities  including the                                                                    
Bethel  Readiness  Center,  Kotzebue Readiness  Center,  and                                                                    
statewide  roof   repairs.  The   budget  also   included  a                                                                    
reappropriation from  DOA for the  Alaska Land  Mobile Radio                                                                    
System (ALMR) outstanding capital  projects. He relayed that                                                                    
the  program had  moved  from DOA  to  DMVA; therefore,  the                                                                    
projects  needed to  be trued-up  and moved  to the  correct                                                                    
2:08:45 PM                                                                                                                    
Co-Chair  Merrick asked  about the  justification for  using                                                                    
higher  education  funds  for  DOL  prosecutor  housing  and                                                                    
Mr.  Steininger answered  that when  the administration  had                                                                    
included  the  item in  the  fast  track supplemental  bill,                                                                    
there had  been an  effort to  avoid using  UGF in  order to                                                                    
move the item through the  process as there were some urgent                                                                    
needs in the fast track  supplemental. He elaborated that in                                                                    
the interest  of avoiding  the use of  dwindling UGF  or CBR                                                                    
funds (at the time the  CBR projections showed the fund near                                                                    
the lowest possible balance),  the administration had looked                                                                    
to other funds  with available balances to meet  some of the                                                                    
needs. He  clarified that the administration  was not trying                                                                    
to draw  any connection between  the purposes of  the higher                                                                    
education fund and  the need to address  sexual assault; the                                                                    
higher education  fund was merely  a fund source  that could                                                                    
satisfy the funding need.                                                                                                       
Representative Wool asked for  the definition of a readiness                                                                    
center [increments shown on slide 20].                                                                                          
Mr. Steininger  deferred to DMVA  for detail.  He understood                                                                    
that  the  facilities  were located  around  the  state  for                                                                    
members  of  the guard  to  convene  for training  or  other                                                                    
2:10:48 PM                                                                                                                    
Mr. Steininger reviewed  additional outstanding supplemental                                                                    
capital  projects  on  slide   21.  The  slide  included  an                                                                    
increment  of  $3.25 million  for  DNR  to assess  landslide                                                                    
hazards.  The funding  would allow  for advanced  warning of                                                                    
events  should a  landslide occur  and cause  a tsunami.  He                                                                    
reviewed a  reappropriation of a prior  year capital project                                                                    
for  DOR. The  reappropriated funds  would be  used for  tax                                                                    
expertise and economic impact analysis  of any tax proposals                                                                    
that  may come  forward.  Additionally,  the slide  included                                                                    
reappropriations  of  unexpended  balances  of  DOT  capital                                                                    
projects that came in under budget.                                                                                             
Vice-Chair Ortiz  looked at the  first item on slide  21. He                                                                    
asked if the Alaska landslide  hazards request was annual or                                                                    
specific to an event.                                                                                                           
Mr. Steininger answered that the  funding was for a specific                                                                    
item and was  not an annual recurring cost. He  did not have                                                                    
the detail on the event.                                                                                                        
Co-Chair   Merrick   thanked    Mr.   Steininger   for   the                                                                    
2:12:38 PM                                                                                                                    
AT EASE                                                                                                                         
2:14:03 PM                                                                                                                    
HB  70  was   HEARD  and  HELD  in   committee  for  further                                                                    
Co-Chair  Merrick reviewed  the schedule  for the  following                                                                    

Document Name Date/Time Subjects
HB 70 HFIN Capital Budget OMB Overview 5.4.2021.pdf HFIN 5/4/2021 1:30:00 PM
HB 70