Legislature(2021 - 2022)ADAMS 519

04/19/2022 01:30 PM House FINANCE

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as

Audio Topic
01:41:20 PM Start
01:42:03 PM HB414
02:11:26 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 414                                                                                                            
     "An  Act   making  appropriations  for   the  operating                                                                    
     expenses  of  state  government and  certain  programs;                                                                    
     making   capital    appropriations   and   supplemental                                                                    
     appropriations; capitalizing  funds; and  providing for                                                                    
     an effective date."                                                                                                        
1:42:03 PM                                                                                                                    
Co-Chair  Merrick  invited  the presenter  to  continue  his                                                                    
presentation [note:  HB 414 was  previously heard  on 4/7/22                                                                    
at 1:00 p.m.  See separate minutes for the  first portion of                                                                    
the presentation].                                                                                                              
MILES BAKER,  INFRASTRUCTURE INVESTMENT  COORDINATOR, OFFICE                                                                    
OF THE  GOVERNOR, reintroduced the  PowerPoint presentation:                                                                    
"Infrastructure Appropriation Bill: HB  414" (copy on file).                                                                    
He  continued on  slide 15  regarding  the coordination  and                                                                    
implementation  of the  bill,  which is  where  he left  off                                                                    
during   the   previous   bill  hearing.   He   noted   that                                                                    
Representative Carpenter  had questions about  Department of                                                                    
Environmental  Conservation's (DEC)  staffing. He  indicated                                                                    
that a  response from  the department  had been  supplied to                                                                    
the committee.                                                                                                                  
Mr. Baker  returned to  slide 7  to provide  a recap  of the                                                                    
presentation.  He reminded  members that  the bill  had been                                                                    
organized by  category, and that the  categories were listed                                                                    
on  the slide.  The  last categories  he  would be  covering                                                                    
during  the  presentation were  infrastructure  coordination                                                                    
and implementation and competitive opportunity investments.                                                                     
1:44:40 PM                                                                                                                    
Mr. Baker  returned to slide  15 regarding  coordination and                                                                    
implementation. He noted  it had become very  clear that the                                                                    
coordination would  take time. The governor  had worked with                                                                    
state  agencies  to  prepare the  bill  and  understand  the                                                                    
potential  influx  of  monies. There  was  also  significant                                                                    
coordination needed outside of  the state agencies and three                                                                    
stakeholders   were   involved.   There   was   $5   million                                                                    
appropriated  for  the  state  infrastructure  planning  and                                                                    
coordination. There  was also $500,000 for  local government                                                                    
capacity building and technical  assistance under the Alaska                                                                    
Municipal  League (AML).  The Alaska  Federation of  Natives                                                                    
(AFN) Navigator Program would receive  funding in the amount                                                                    
of $2.5 million that would  help continue the efforts of the                                                                    
program.   He    added   that    AML   was    also   hosting                                                                    
alaskafederalfunding.org   as   a   repository   for   grant                                                                    
opportunities  and other  additional  information about  the                                                                    
Co-Chair  Merrick asked  if there  was any  direct community                                                                    
outreach outside of AML and AFN.                                                                                                
Mr. Baker asked a clarifying question.                                                                                          
Co-Chair  Merrick asked  if there  would  be other  measures                                                                    
taken to communicate with Alaskans directly.                                                                                    
Mr. Baker indicated the Office  of the Governor did not want                                                                    
to initiate  any taskforces or  start working  groups before                                                                    
knowing  where  coordination  was  needed.  He  thought  the                                                                    
responsibility of  the bill  belonged in  the Office  of the                                                                    
Governor  for  the  time  being.   The  process  of  outside                                                                    
coordination  had begun,  and  an infrastructure  subcabinet                                                                    
would likely  be formed,  which would  include collaboration                                                                    
from  public  corporations   during  regular  meetings.  The                                                                    
broadband   requirements   were  fairly   prescriptive   and                                                                    
dictated  that the  state would  collect  regional input  to                                                                    
ensure there  was a coordinated statewide  plan. Many states                                                                    
had  a statewide  infrastructure  entity  which allowed  the                                                                    
programing of  new monies  into the  existing infrastructure                                                                    
process.  He  was  open  to   ideas  and  working  with  the                                                                    
1:51:32 PM                                                                                                                    
Representative  Johnson  asked   about  the  possibility  of                                                                    
federal funds being "clawed-back."                                                                                              
Mr. Baker indicated there was  a small amount of concern. He                                                                    
expressed that  the infrastructure  bill was  different than                                                                    
what had  been experienced with the  COVID-19 related bills.                                                                    
One of  the questions asked  by members of the  Alaska State                                                                    
Senate  was  whether  Alaska  was  eligible  for  any  other                                                                    
federal  funding, and  the  answer was  no.  He provided  an                                                                    
example  that from  year-to-year  the  Alaska Department  of                                                                    
Transportation and  Public Facilities (DOT)  received monies                                                                    
but did not always spend all  of the monies. The federal DOT                                                                    
reshuffled these monies every  August to make unspent monies                                                                    
available  for other  projects.  He  thought that  something                                                                    
similar could  happen in this  situation. He  predicted that                                                                    
the  grant  applications  would indicate  the  appetite  for                                                                    
various  projects.   The  state  had   received  significant                                                                    
funding for  lead service line replacements,  which had been                                                                    
facilitated  by the  Environmental  Protection Agency  (EPA)                                                                    
through a national distribution. There  was not as much lead                                                                    
service line  in Alaska as  in other states, so  perhaps the                                                                    
money would be redistributed and used in other areas.                                                                           
1:54:08 PM                                                                                                                    
Mr. Baker turned  to slide 16 to discuss  the investments in                                                                    
competitive  opportunities.  He  indicated that  Alaska  was                                                                    
uniquely   positioned   to   take   advantage   of   certain                                                                    
circumstances  and he  thought it  was beneficial  to invest                                                                    
some  unrestricted  general  fund   (UGF)  monies  into  the                                                                    
opportunities. He read from the list on the slide:                                                                              
     Electric Grid Modernization -AEA                                                                                           
          ?Grid  reliability,  resiliency  and  transmission                                                                    
          $6,000.0 ($1,000.0 UGF, $5,000.0 Fed)                                                                                 
     Clean Hydrogen Technologies -AGDC                                                                                          
          ?Clean   hydrogen    research,   development   and                                                                    
          demonstration  $6,000.0  ($1,000.0  UGF,  $5,000.0                                                                    
     Carbon Capture & Sequestration -DNR                                                                                        
          ?Carbon   technology    infrastructure   research,                                                                    
          development  and demonstration  $6,000.0 ($1,000.0                                                                    
          UGF, $5,000.0 Fed)                                                                                                    
     Rare Earth & Critical Minerals -UA                                                                                         
          ?Rare Earth Elements  (REE) Demonstration Facility                                                                    
          $500.0 UGF                                                                                                            
          ?Critical  Minerals   Security  Projects  $9,500.0                                                                    
          ($2,000.0 UGF, $7,500.0 Fed)                                                                                          
Mr.  Baker indicated  that there  was  a fairly  significant                                                                    
response  to   a  host  of  questions   that  Alaska  Energy                                                                    
Authority  (AEA)  had  in the  preparation  of  the  funding                                                                    
opportunities. He expected  that funding opportunity notices                                                                    
should  be  released  soon.   The  legislation  included  $5                                                                    
billion for reduced electrical outages  and the hardening of                                                                    
the grid against disruptive events.  There was an additional                                                                    
$5   billion  for   research   development  for   innovative                                                                    
approaches   to  grid   resiliency,  and   $1  billion   for                                                                    
infrastructure in  remote areas. There was  a transportation                                                                    
facility program  for the funding of  construction of grids.                                                                    
He explained  that AEA would coordinate  the projects around                                                                    
the large funding  opportunities and it would  be similar to                                                                    
the structure  of coordination  in the bill  as a  whole. In                                                                    
the area of  clean hydrogen, there would be  $8 billion made                                                                    
available  over  the  course  of five  years  to  support  a                                                                    
minimum  of four  regional clean  hydrogen  hubs. There  was                                                                    
also  $1   billion  for  clean  hydrogen   electrolysis.  He                                                                    
suggested that it was important  to get ahead of the initial                                                                    
funding opportunity  notices because the  opportunities were                                                                    
often  limited. There  could  be a  huge  return in  several                                                                    
areas if the state took advantage of the opportunities.                                                                         
1:59:42 PM                                                                                                                    
Representative Edgmon returned to  slide 15. It appeared the                                                                    
Office   of   the   Governor   would   be   increasing   its                                                                    
responsibilities.  He wondered  where  all  of the  entities                                                                    
would converge.                                                                                                                 
Mr.  Baker  anticipated  the  inception  of  a  coordination                                                                    
office within  the Office  of the  Governor that  would work                                                                    
closely with the other organizations  and with the broadband                                                                    
office.  He  would  want   to  formalize  some  coordination                                                                    
efforts in  terms of committees  of coordination.  He wanted                                                                    
to  have the  ability  to  move quickly  to  assess the  new                                                                    
opportunities  and go  after them  as prescribed.  The grant                                                                    
applications  would  be  expensive, and  the  efforts  would                                                                    
focus  on funding  the applications.  He  thought the  state                                                                    
would  want  to be  judicious  with  taskforces and  working                                                                    
groups  that  would help  in  areas  such as  oversight  and                                                                    
reporting. He wanted to be sure  the state was aware of what                                                                    
had  value and  what did  not.  He wanted  to determine  the                                                                    
position  of  the  legislature   before  deciding  upon  the                                                                    
structure of the coordination.                                                                                                  
Representative  Edgmon remarked  that there  was significant                                                                    
coordination. He  thought the legislature  would need  to be                                                                    
coordinated as well.                                                                                                            
2:04:29 PM                                                                                                                    
AT EASE                                                                                                                         
2:04:51 PM                                                                                                                    
Representative LeBon referred  to slide 16 and  asked if the                                                                    
grants  were  competitive. He  noted  that  the state  would                                                                    
invest money in  order to seek grants,  however the awarding                                                                    
of  the grants  was  not  guaranteed. He  thought  it was  a                                                                    
worthy investment and  asked whether the state  was going to                                                                    
pursue the grants.                                                                                                              
Mr. Baker  responded in the  affirmative. He  explained that                                                                    
he was  asking for  the funding from  the legislature  to go                                                                    
after  the  grants.  The  exact nature  of  the  grants  was                                                                    
uncertain,  and   he  was  trying  to   capture  the  upside                                                                    
potential.  He stated  that the  grants  were technical  and                                                                    
would require a multi-team effort.  He thought it would cost                                                                    
the state about $1 million to respond to the opportunities.                                                                     
Representative Wool noted the  investments detailed on slide                                                                    
16 and  wondered if  the money  would be  used to  apply for                                                                    
grants for larger projects. He  asked how the money would be                                                                    
used specifically.                                                                                                              
Mr.  Baker clarified  that  UGF monies  would  be needed  to                                                                    
prepare  the applications  for the  grants.  If the  efforts                                                                    
were successful,  he expected the  federal money  amounts to                                                                    
be  much  higher.  There  would  need  to  be  some  receipt                                                                    
authority as  well. The  money was meant  to pay  for things                                                                    
like content development,  expertise, and technical writing.                                                                    
If  the state  was successful  in obtaining  the grants,  he                                                                    
would have  to come  back to  the committee  with additional                                                                    
Representative  Wool  shared   his  understanding  that  the                                                                    
federal   numbers  were   hypothetical   and   acted  as   a                                                                    
placeholder for  the time  being. He  thought Mr.  Baker was                                                                    
asking for $1 million in UGF for grant coordination.                                                                            
Mr. Baker responded in the  affirmative and added that there                                                                    
was one exception, which was  the critical minerals security                                                                    
projects. This  was a partnership between  the University of                                                                    
Alaska and  a number  of other  entities. He  explained that                                                                    
this was phase  2 of the project and expected  there to be a                                                                    
$7.5  million  of federal  monies  and  would require  a  $2                                                                    
million match. Apart from this  exception, he indicated that                                                                    
Representative Wool was correct in  that many of the federal                                                                    
numbers  were placeholders.  He  wanted to  use the  federal                                                                    
numbers  to   illustrate  the  multiplier  effect   and  the                                                                    
Co-Chair Merrick  thanked Mr. Baker and  reviewed the agenda                                                                    
for the following meeting.                                                                                                      
HB 414 was HEARD and HELD in committee for further                                                                              

Document Name Date/Time Subjects
HB 414 Public Testimony Rec'd by 041922.pdf HFIN 4/19/2022 1:30:00 PM
HB 414
HB 414 OMB Response to 04.07.22 HFIN IIJA.pdf HFIN 4/19/2022 1:30:00 PM
HB 414