Legislature(2009 - 2010)BELTZ 211

03/12/2009 09:00 AM Senate STATE AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved SB 113 Out of Committee
Uniform Rule 23 Waived
Moved CSSB 130(STA) Out of Committee
Uniform Rule 23 Waived
Moved SCS HCR 7(STA) Out of Committee
Uniform Rule 23 Waived
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSSB 94(STA) Out of Committee
               SB 130-ECONOMIC STIMULUS TASKFORCE                                                                           
9:29:00 AM                                                                                                                    
CHAIR MENARD announced the consideration of SB 130.                                                                             
SENATOR LESIL MCGUIRE,  Alaska State Legislature, said  she is the                                                              
sponsor  of SB  130, which  is a  tool for  analyzing the  Federal                                                              
Recovery  and Reinvestment  Act  (ARRA)  that contains  almost  $1                                                              
trillion to  be spread among  the states.  It is coming  to Alaska                                                              
very  rapidly with  some complex  rules and  deadlines. The  first                                                              
deadline was  March 10.  There have been  people in  this building                                                              
hard  at  work  to  understand  this  stimulus  package  and  what                                                              
Alaskans  can do  to respond  to its  deadlines. The  bill is  not                                                              
aimed at  embarrassing anyone  or to imply  that nothing  has been                                                              
done. The  bill responds  to the  rapid nature  of ARRA  without a                                                              
logical  place  for the  public  to  turn  to,  and it  will  help                                                              
communications  between the  administration  and the  legislature.                                                              
Larry  Persily, in  the House, and  Steve Porter,  in the  Senate,                                                              
are lead staff  working on ARRA. The governor  has appointed Karen                                                              
Rehfeld  as the lead  from the  Office of  Management and  Budget.                                                              
Alaska  has   responded  to  ARRA  regarding   transportation  and                                                              
infrastructure.  The next  deadline is  April 3,  and it  includes                                                              
education and Medicaid.                                                                                                         
9:32:01 AM                                                                                                                    
SENATOR  MCGUIRE said  she  was  in Washington  DC  last week  and                                                              
discussed ARRA.  She wants SB 130  to go to the  finance committee                                                              
where it  can be considered  with other  tools and strategies  for                                                              
using  ARRA.  The narrower  scope  is  the  third portion  of  the                                                              
stimulus  package and pertains  to competitive  grants. There  are                                                              
grants  with large  pots of  money to  be applied  for across  the                                                              
United States with  a myriad of dates and deadlines.  There are 33                                                              
pots of  money for  renewable energy,  hunger, and more.  Alaska's                                                              
municipalities  and  nonprofits are  eligible  for  many of  these                                                              
grants.  The  taskforce  can  oversee   the  distribution  of  the                                                              
grants.  The bill  suggests that  the taskforce  consist of  three                                                              
members  each from  the House  and  Senate, two  members from  the                                                              
administration, and one from the Alaska Municipal League.                                                                       
9:34:06 AM                                                                                                                    
SENATOR  MCGUIRE  said the  taskforce  could  be  set up  for  the                                                              
interim  as a  natural  place for  people  to  go for  information                                                              
exchange.  One concern  stems from  individuals  from outside  who                                                              
announced  they had already  begun applying  for Alaska's  portion                                                              
of  the  energy  funds to  develop  algae  biomass  energy.  Savvy                                                              
people  may   be  ahead  of  the   curve  and  in   possession  of                                                              
information  that  Alaska lacks.  A  taskforce  is not  the  magic                                                              
answer but  has gotten a  lot of traction  from the  public. There                                                              
is concern about the money from the stimulus package.                                                                           
9:36:01 AM                                                                                                                    
CHAIR MENARD asked how many other states have a taskforce.                                                                      
SENATOR MCGUIRE  said many states have, including  Ohio, Virginia,                                                              
and  Maryland.  About 30  percent  of  the  states are  using  the                                                              
taskforce model,  which are largely organized with  members of the                                                              
legislatures  and the  administrations.  Some were  created by  an                                                              
assembly  or  through  the  governor,   and  some  states  include                                                              
members of  the public.  The committee  could consider  that. This                                                              
is  not  an  original  idea. The  majority  of  states  have  some                                                              
organized method of responding to ARRA.                                                                                         
9:37:49 AM                                                                                                                    
CHAIR MENARD  said Alaska  has money and  skilled people.  She has                                                              
some  reservations   because  she   recognizes  "the   quality  of                                                              
financial people that we do have, even in this building."                                                                       
SENATOR FRENCH said  he thinks this is a wonderful  idea. There is                                                              
no  clear  central   entity  steering  this  money   and  that  is                                                              
unfortunate. It  looks like  April 3 is  a crucial date.  He asked                                                              
what the taskforce will do after that date.                                                                                     
9:39:26 AM                                                                                                                    
SENATOR  MCGUIRE   said  this  bill  has  been   referred  to  two                                                              
committees,  which   made  that  date   null  and  void   for  the                                                              
taskforce.  It can  deal  with the  myriad  of  deadlines for  the                                                              
competitive  grants that  occur in May,  June, August,  September,                                                              
December,  and  January.  At  this  stage,  Larry  Persily,  Steve                                                              
Porter,  and the  co-chairs of  the finance  committees will  have                                                              
the leadership  for the  April 3 date.  This taskforce  will begin                                                              
right  after  legislative   session  on  April  19   by  gathering                                                              
information  and distributing  it to  communities and  nonprofits.                                                              
That money  doesn't come through  the state; it comes  directly to                                                              
the  boroughs and  nonprofits, which  makes it  more onerous.  The                                                              
taskforce will  help guide folks  who do not have  financial savvy                                                              
and experience.  The legislature will  be held accountable  in the                                                              
end. "If we want  to put our hands up and say you  folks out there                                                              
apply  for it and  so on,  if they  miss deadlines,  if the  money                                                              
goes  to people  from  outside who  are more  savvy  or snake  oil                                                              
salesmen  ... we, the  elected members  of the  House and  Senate,                                                              
are going to be held accountable anyway."                                                                                       
9:42:26 AM                                                                                                                    
SENATOR FRENCH  asked about  the existing  entities that  could do                                                              
the  work,   including  Senator   Meyer   who  chairs  the   joint                                                              
Legislative  Budget and  Audit Committee.  "Why  wouldn't that  be                                                              
the perfect interim entity to do this work?                                                                                     
9:43:20 AM                                                                                                                    
SENATOR MCGUIRE  said that  could be the  place, but there  are no                                                              
members  of  the public  or  the  municipal  league. She  is  just                                                              
looking for  someone to recognize  the magnitude of this  and take                                                              
the reins.  If the bill moves to  the next committee it  will keep                                                              
the  pressure and  momentum for  the  topic. If  Senator Meyer  is                                                              
designated  the czar of  Alaska competitive  grants, she  would be                                                              
grateful. He and his committee would be well-suited.                                                                            
SENATOR PASKVAN asked about the act being repealed in July 2009.                                                                
SENATOR MCGUIRE said that needs to be changed.                                                                                  
SENATOR PASKVAN asked if February 1, 2010, would be better.                                                                     
9:44:56 AM                                                                                                                    
SENATOR  MCGUIRE  said that  is  a  good  question. The  bill  was                                                              
drafted to  set up a  framework right away.  There are  dates that                                                              
go through  2012, but the  drop-dead date  is January 1,  2011. It                                                              
could  be  left  until  the  taskforce   finishes  its  work.  She                                                              
suggested repealing it in April 2010.                                                                                           
SENATOR PASKVAN said that is appropriate.                                                                                       
SENATOR MEYER  said this is a  concept that should  be considered.                                                              
There  are  a lot  of  people  working  on this  issue,  including                                                              
Alaska's congressional  senators. Larry  Persily has  been working                                                              
on it  more than anyone  and at the  request of the  House Finance                                                              
Committee. The  Senate has hired  Steve Porter. The next  key date                                                              
is April  3, and it  will be up  to the administration  to request                                                              
the  funds, and  it  is uncertain  that  if the  governor  doesn't                                                              
request  them, what  role,  if any,  the  legislature plays.  Some                                                              
people think  the legislature  has 45 days  to request it.  He has                                                              
found  that most  of this  will  require the  executive branch  to                                                              
make  the request  and  apply  for the  grants.  The  role of  the                                                              
legislature   is  unknown.  It   may  be   to  just  oversee   the                                                              
administration.   Thus  far,   Karen  Rehfeld   has  been   fairly                                                              
cooperative.  It  is  still  early  in  the  process.  Things  are                                                              
working pretty  well, but if things  don't continue to  work well,                                                              
a taskforce should be considered.                                                                                               
9:48:03 AM                                                                                                                    
SENATOR MCGUIRE said  it will just be a tool.  A taskforce doesn't                                                              
have  the weight  of the  law, but  it  can help  if things  don't                                                              
progress  and if the  state needs  more coordination.  There  is a                                                              
lot  of work  being done  in discreet  parts,  but it  may not  be                                                              
getting out to the public. There is no fiscal note.                                                                             
9:48:56 AM                                                                                                                    
LARRY  PERSILY,  Staff  to the  House  Finance  Committee,  Alaska                                                              
State  Legislature,   said  he   has  been  trying   to  decipher,                                                              
translate, and  gather information  on the economic  stimulus bill                                                              
for the  past several weeks.  He has been  sending updates  to all                                                              
legislators and to  a growing list of Alaskans  who have requested                                                              
them.  The  stimulus  requires  the  governor  of  each  state  to                                                              
certify  whether  the state  wants  the money  by  April  3. If  a                                                              
governor  does   not  request  funds  then  the   legislature,  by                                                              
concurrent  resolution,  can  request  them for  the  state.  That                                                              
April  deadline only  applies to  money going  through the  state.                                                              
There are  a lot of  grant funds that  the state will  administer;                                                              
"the  feds will  give  money to  the state;  the  state will  then                                                              
grant  them  out.  Those  would   be  covered  by  the  April  3rd                                                              
deadline."  There  are a  lot  of  grant  programs that  don't  go                                                              
through  the  states.  Federal   agencies  will  administer  those                                                              
directly  to nonprofits  and other  entities.  The April  deadline                                                              
doesn't apply to  those. If Alaska didn't want any  funds it would                                                              
eliminate  the money  going through  the state  but not the  money                                                              
going to nonprofits directly from federal agencies.                                                                             
9:51:03 AM                                                                                                                    
SENATOR PASKVAN asked the amount of the funds going to states.                                                                  
MR. PERSILY said  if direct federal spending is  subtracted, it is                                                              
a little  more than $800  million, but some  of it is  by formula,                                                              
like  Medicaid, and  some  is by  formula  with  kickers, like  an                                                              
increase   in  unemployment.   There   are   formula  grants   and                                                              
competitive  grants. Most of  those dollars  will go to  airports,                                                              
transportation,  transit, Medicaid, and  education. There  is very                                                              
little discretionary money for the state.                                                                                       
9:52:23 AM                                                                                                                    
SENATOR PASKVAN  asked if this  taskforce or some  other oversight                                                              
entity will be useful.                                                                                                          
MR.  PERSILY  said  it  would depend  on  the  public  demand  for                                                              
information. He was  supposed to be at a meeting  in Anchorage for                                                              
170  representatives of  nonprofits  who are  trying  to find  out                                                              
what  there is  to apply  for. There  is a  need for  information.                                                              
"People got a little  hyped up from the news media  that the money                                                              
was  instant,  but there's  a  couple  dozen programs  that  never                                                              
existed until  three weeks ago when  this was signed into  law. So                                                              
we shouldn't blame  federal agencies if they don't  have the grant                                                              
criteria  or  the applications."  Alaskans  want  information  and                                                              
want to apply for  the money. Whether it is a  taskforce or office                                                              
coordinator, the  legislature needs to decide what  role the state                                                              
should have  in assisting  nonprofits and  communities in  getting                                                              
money.  The Department  of  Transportation  and Public  Facilities                                                              
and Medicaid  can take  care of  themselves,  but the question  is                                                              
for  the nonprofits.  It  won't  be tens  of  millions of  dollars                                                              
flowing to Alaska, but it will be worth applying for.                                                                           
9:54:15 AM                                                                                                                    
CHAIR MENARD  asked if  Alaska is  going to be  a good  steward of                                                              
the stimulus  money.  "Do you have  a high  confidence level  that                                                              
you're  doing  everything  possible  with the  limited  amount  of                                                              
people that  are working on  this and the  caliber of  people that                                                              
are working on this?"                                                                                                           
MR. PERSILY said  that based on his conversations  with John Katz,                                                              
Karen  Rehfeld, the  congressional delegation,  and agency  staff,                                                              
he is  confident that Alaska  is doing  a good job  of determining                                                              
what  is there for  Alaska,  how to spend  it wisely,  and how  to                                                              
have a good shot of getting its fair share.                                                                                     
SENATOR  MEYER said  there are  a lot  of people  working on  this                                                              
including  the  legislature,  several  nonprofits,  and a  lot  of                                                              
mayors and  municipalities. He is  not convinced that  a taskforce                                                              
will help  or hinder.  The taskforce  may be  a central  point for                                                              
the  public, municipalities,  legislators, and  nonprofits to  get                                                              
information.  Senator Stedman  "wants to  level it out  statewide,                                                              
so he  needs to know what  the municipalities have  already gotten                                                              
through the economic  stimulus program." He doesn't  know how Nome                                                              
got $125 million  for its hospital. That is where  a central point                                                              
could  be helpful.  Do  you agree  that  the  legislative role  is                                                              
secondary? The  administration is  the lead dog,  "but I  do think                                                              
that we  can help them  and probably should  oversee them  to make                                                              
sure they  are being  as aggressive  as possible." Legislation  is                                                              
needed.  A  joint  resolution  will  be  needed  if  the  governor                                                              
doesn't  pursue  the  certification.  What  else do  you  see  the                                                              
legislature needing to do?                                                                                                      
9:57:46 AM                                                                                                                    
MR. PERSILY  said he was told to  not give opinions, but  it's his                                                              
nature. The money  for the Indian Health Service  hospital in Nome                                                              
didn't  involve the  state. If  the governor  doesn't want  funds,                                                              
the  legislature needs  to decide  if  it wants  them. When  money                                                              
comes  in, the  legislature  has the  power  of appropriation  for                                                              
transit  and  transportation.  There  is some  discretion  in  the                                                              
fiscal stabilization  funds - the 18 percent that  doesn't have to                                                              
be spent  on education  but could. That's  $20 million  subject to                                                              
legislative appropriation.  Helping nonprofits fits  in a category                                                              
of public  policy. The legislature needs  to look at how  it wants                                                              
to help,  whether it is with  a taskforce, a  coordinating office,                                                              
staff assignments, or any other means.                                                                                          
10:00:12 AM                                                                                                                   
JEREMY  WOODROW,  Communications   Coordinator,  Alaska  Municipal                                                              
League  (AML), Juneau,  said the  AML supports  SB 130. Alaska  is                                                              
expected  to receive  more than  $800 million  of the ARRA  funds.                                                              
Numerous national  and state deadlines  come with the  package. To                                                              
make sure  that these funds  are fully and adequately  distributed                                                              
across  the state will  be challenging.  AML  supports a fair  and                                                              
equitable  distribution  that  benefits  all  Alaska  regions  and                                                              
municipalities.  The formation  of a  taskforce is  a step  in the                                                              
right  direction in  minimizing  the effect  of  the recession  in                                                              
Alaska. Including  municipalities in the process  provides insight                                                              
and  benefit  to  the  taskforce.  AML is  grateful  that  SB  130                                                              
includes AML as a taskforce member.                                                                                             
10:01:56 AM                                                                                                                   
SENATOR  KOOKESH  asked   if  the  AML  will  cover   all  of  its                                                              
transportation costs related to the taskforce.                                                                                  
MR.  WOODROW said,  yes, AML  has  participated in  many kinds  of                                                              
taskforces, and the board usually supports the travel costs.                                                                    
BRENDA  HEWITT, President,  United Way  Southeast Alaska,  Juneau,                                                              
said  her group  includes  24 communities  and  over 30  nonprofit                                                              
agencies.  She  asked  all  her   nonprofits,  and  they  see  the                                                              
taskforce  as  a benefit.  Some  of  the larger  agencies  already                                                              
belong to  several organizations and  they are analyzing  the bill                                                              
from  their perspective.  The national  organizations are  already                                                              
dissecting  the   bill.  Some  smaller  groups  don't   have  that                                                              
benefit.  "Right here  in  Juneau we  know  that there's  $990,000                                                              
that are sitting  on the table unapplied for --  earned income tax                                                              
credits. We've  never been able to  get the information  out or we                                                              
haven't gotten  people who  are below that  poverty line  to apply                                                              
for  their  income  tax rebates."  The  group  wasn't  coordinated                                                              
enough to  apply for the  neighborhood stabilization  grant money.                                                              
There is  money that  sits on the  table that  could be  spent and                                                              
put into our economy  and used for projects that  we know we need.                                                              
A taskforce  or some other entity  would be a  coordinated effort.                                                              
Karen Rehfeld  has a lot  on her plate,  and if a  nonprofit calls                                                              
her  to ask  how to  interpret this  1,000-page bill,  it will  be                                                              
overwhelming.  "I would  encourage  you to  come  forth with  some                                                              
avenue that nonprofits can approach."                                                                                           
10:05:17 AM                                                                                                                   
The committee took a brief at-ease.                                                                                             
10:06:28 AM                                                                                                                   
SENATOR PASKVAN moved  to adopt Amendment 1 to change  the date in                                                              
section 2 to April  1, 2010. This date will allow  the legislature                                                              
to extend the taskforce if need be.                                                                                             
SENATOR  FRENCH said  the  taskforce issues  its  final report  on                                                              
July 1, 2009.                                                                                                                   
SENATOR MEYER objected to Amendment 1 for discussion purposes.                                                                  
10:07:44 AM                                                                                                                   
SENATOR PASKVAN said  the bill has a final report,  but there will                                                              
be additional  activities that  will need  to be monitored.  There                                                              
would be time for legislators to get more information.                                                                          
SENATOR MCGUIRE  recommended calling  for a preliminary  report on                                                              
July 1, 2009,  and a final  report in April 2010.  The preliminary                                                              
report  would provide  the structure  and goals  of the  taskforce                                                              
and  inform the  public of  its role.  The final  report would  be                                                              
issued when the taskforce ends.                                                                                                 
10:09:42 AM                                                                                                                   
SENATOR FRENCH suggested moving Amendment 1.                                                                                    
SENATOR   MEYER  removed   his  objection.   Hearing  no   further                                                              
objection, Amendment 1 was adopted.                                                                                             
SENATOR  FRENCH moved  Amendment 2  as follows:  page 2, line  16,                                                              
delete "final"  and insert  "initial". He  will suggest  a further                                                              
10:11:05 AM                                                                                                                   
SENATOR MEYER objected for the purpose of discussion.                                                                           
SENATOR KOOKESH  said in order to  vote on this, he wants  to know                                                              
what Senator French's next amendment will be.                                                                                   
SENATOR  FRENCH  said his  next  motion will  be  to  add a  final                                                              
report in April 2010.                                                                                                           
SENATOR   MEYER  removed   his  objection.   Hearing  no   further                                                              
objection, Amendment 2 was adopted.                                                                                             
SENATOR FRENCH moved  Amendment 3 as follows: On page  2, line 16,                                                              
add  subsection (g)  as  follows: "the  taskforce  shall submit  a                                                              
final report to the legislature before April 1, 2010."                                                                          
SENATOR MEYER objected for the purpose of discussion.                                                                           
10:12:17 AM                                                                                                                   
SENATOR  PASKVAN  said  he  assumes  that  the  legislature  could                                                              
extend the taskforce if it needed more time.                                                                                    
SENATOR  FRENCH said  right now  the taskforce  goes away  July 1,                                                              
2010, and if the body saw fit to extend it, it could.                                                                           
SENATOR   MEYER  removed   his  objection.   Hearing  no   further                                                              
objection, Amendment 3 was adopted.                                                                                             
10:13:42 AM                                                                                                                   
SENATOR FRENCH  said the bill is  back for discussion.  These were                                                              
minor changes. It needs to be hashed out in finance committee.                                                                  
SENATOR MEYER moved  to report SB 130, as amended,  from committee                                                              
with  individual  recommendations  and  attached  fiscal  note(s).                                                              
There being no objection, CSSB 130(STA) moved from committee.                                                                   

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