Legislature(2019 - 2020)Anch LIO Lg Conf Rm

05/01/2020 01:00 PM House LEGISLATIVE BUDGET & AUDIT

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01:01:40 PM Start
01:03:12 PM Approval of Minutes
01:03:35 PM Revised Programs - Legislative (rpls)
01:59:30 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 5/6/20 at 1:00 pm --
-- Teleconference <Listen Only> --
**Streamed live on AKL.tv**
                    ALASKA STATE LEGISLATURE                                                                                  
             LEGISLATIVE BUDGET AND AUDIT COMMITTEE                                                                           
                       Anchorage, Alaska                                                                                        
                          May 1, 2020                                                                                           
                           1:01 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Chris Tuck, Chair                                                                                                
Representative Neal Foster                                                                                                      
Representative Andy Josephson                                                                                                   
Representative Ivy Spohnholz (via teleconference)                                                                               
Representative Mark Neuman (via teleconference)                                                                                 
Representative Jennifer Johnston (alternate, via teleconference)                                                                
Senator Click Bishop, Vice Chair                                                                                                
Senator Bert Stedman (via teleconference)                                                                                       
Senator Natasha von Imhof                                                                                                       
Senator Cathy Giessel                                                                                                           
Senator Lyman Hoffman (via teleconference)                                                                                      
Senator Bill Wielechowski (alternate, via teleconference)                                                                       
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
OTHER LEGISLATORS PRESENT                                                                                                     
Representative Bryce Edgmon                                                                                                     
Representative Matt Claman                                                                                                      
Representative DeLena Johnson                                                                                                   
Representative Dan Ortiz                                                                                                        
Representative Geran Tarr                                                                                                       
Representative Kelly Merrick                                                                                                    
Representative Harriet Drummond                                                                                                 
Senator Lora Reinbold.                                                                                                          
COMMITTEE CALENDAR                                                                                                            
APPROVAL OF MINUTES                                                                                                             
REVISED PROGRAMS - LEGISLATIVE (RPLs)                                                                                           
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
PAT PITNEY, Director                                                                                                            
Legislative Finance Division                                                                                                    
Legislative Affairs Agency                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Provided information regarding RPLs.                                                                     
NEIL STEININGER, Director                                                                                                       
Office of Management & Budget                                                                                                   
Office of the Governor                                                                                                          
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Answered questions regarding RPLs.                                                                       
LACEY SANDERS, Director                                                                                                         
Administrative Services Section                                                                                                 
Department of Education & Early Development                                                                                     
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Answered questions during the  discussion of                                                            
ELIZABETH DUNAYSKI, Director                                                                                                    
Central Office                                                                                                                  
Division of Administrative Services                                                                                             
Department of Public Safety                                                                                                     
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Provided information  during discussion  of                                                            
ROB CARPENTER, Deputy Commissioner                                                                                              
Department of Transportation & Public Facilities                                                                                
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:    Answered questions  during  discussion  of                                                            
ACTION NARRATIVE                                                                                                              
1:01:40 PM                                                                                                                    
CHAIR  CHRIS  TUCK   called  the  Legislative  Budget   and  Audit                                                            
Committee meeting  to order at [1:01] p.m.   Representatives Tuck,                                                              
Foster, Josephson,  Spohnholz, Johnston  (Alternate) and  Senators                                                              
Bishop, Stedman, von  Imhof, and Giessel were present  at the call                                                              
to order.   Representative  Neuman  (via teleconference),  Senator                                                              
Hoffman  (via  teleconference),   and  Senator  Wielechowski  (via                                                              
teleconference)  arrived as  the meeting  was in  progress.   Also                                                              
present  were   Representatives   Edgmon,  Claman,  Ortiz,   Tarr,                                                              
Merrick, and Drummond and Senator Reinbold.                                                                                     
^Approval of Minutes                                                                                                            
                      Approval of Minutes                                                                                   
1:03:12 PM                                                                                                                    
CHAIR TUCK  announced that  the first order  of business  would be                                                              
the approval of minutes.                                                                                                        
1:03:20 PM                                                                                                                    
SENATOR  BISHOP  made a  motion  to  approve  the minutes  of  the                                                              
Legislative Budget  and Audit Committee of March 30,  2020.  There                                                              
being  no objection,  the minutes  from the meeting  of March  30,                                                              
2020, were approved.                                                                                                            
^Revised Programs - Legislative (RPLs)                                                                                          
             Revised Programs - Legislative (RPLs)                                                                          
1:03:35 PM                                                                                                                    
CHAIR TUCK  announced that  the final order  of business  would be                                                              
the consideration  of Revised Programs  - Legislative (RPLs).   He                                                              
said he would  like the committee  to consider as many  RPLs as it                                                              
could  legally approve  to release  as much money  as possible  to                                                              
help the  people of Alaska "alleviate  some of the effects  of the                                                              
COVID-19  crisis."   He stated  his intention  that the  committee                                                              
release more  than $124 million  today.   He stated that  a couple                                                              
hours  ago a  revised RPL  packet was  sent by  the governor  that                                                              
contains over  100 new RPL  requests and  is more than  270 pages.                                                              
He said  that "our team"  did not have  time to review  the entire                                                              
packet; therefore,  it was his  intention to give  the Legislative                                                              
Finance Division  and Legislative  Legal  Services time to  review                                                              
the RPLs  and then reconvene  at a later  date to address  them as                                                              
soon as possible.                                                                                                               
CHAIR TUCK named  those available to inform and  answer questions:                                                              
Pat  Pitney,  Kelly   Cunningham,  Sabrina  Javier,   and  Michael                                                              
Partlow,  from  the Legislative  Finance  Division;  Kris  Curtis,                                                              
from the  Legislative Audit  Division; Neil  Steininger,  from the                                                              
Office of  Management &  Budget; Rob  Carpenter, John  Binder, Dom                                                              
Pannone,  Ben White,  Matt  McLaren, and  Mike  Lesmann, from  the                                                              
Department of Transportation  & Public Facilities;  Lacey Sanders,                                                              
from the  Department of Education  & Early Development;  Elizabeth                                                              
Dunayski,  from  the  Department   of  Public  Safety;  and  Megan                                                              
Wallace, from Legislative Legal Services.                                                                                       
1:05:47 PM                                                                                                                    
PAT PITNEY,  Director, Legislative  Finance Division,  Legislative                                                              
Affairs  Agency, noted  that  the division  had  just supplied  an                                                              
updated packet of  RPLs to committee members with  minor revisions                                                              
made to the six RPLs that were supplied two days ago.                                                                           
MS. PITNEY  began with RPL  05-2020-0074, which is  $44,911,411 of                                                              
funding through  the CARES  Act to the  Department of  Education &                                                              
Early Development  (DEED).  She indicated that  $38,407,000 of the                                                              
total  amount would  provide  for  additional formula  funding  to                                                              
kindergarten  through  twelfth-grade  (K-12) schools,  while  $6.5                                                              
million is  the governor's  Education Relief  Fund.  She  said the                                                              
amount submitted  on April 21, 2020,  was $48 million.   She said,                                                              
"Subsequently  they   know  the   exact  amount.     They've  also                                                              
clarified  that it's  a  [fiscal year  2020]  (FY 20)  RPL."   She                                                              
stated  there  are no  technical  issues  with  this RPL  and  the                                                              
intent  of  the  distribution  is  based  on  Title  I(a)  formula                                                              
funding and an  additional amount to ensure that  all K-12 schools                                                              
"get an amount."   She noted that there is $2.8  million remaining                                                              
from "a formal distribution that has not been provided for."                                                                    
1:08:39 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  asked whether these funds  could be used                                                              
after July 1.                                                                                                                   
MS. PITNEY answered  that the funding will be  allocated to school                                                              
districts in FY  20, but the school districts "have  access to the                                                              
funding  going  forward."   She  deferred  to Neil  Steininger  or                                                              
Lacey Sanders for further clarification.                                                                                        
1:10:40 PM                                                                                                                    
NEIL STEININGER,  Director, Office of Management  & Budget, Office                                                              
of the Governor,  echoed Ms. Pitney's statement that  the funds in                                                              
the state  budget would  be obligated  in FY 20  but the  grant to                                                              
the  school "would  be available  to be  spent ...  outside of  FY                                                              
20."    He  added that  there  is  carry-forward  federal  receipt                                                              
language  under the  FY 21  budget  that can  be used  by DEED  to                                                              
carry that  revenue forward  "and make  those commitments  at that                                                              
time in FY 21, as well."                                                                                                        
REPRESENTATIVE  JOSEPHSON  asked  what the  restriction  on  these                                                              
dollars are "relative to the $30 million that was vetoed."                                                                      
MR.  STEININGER  offered  his understanding  that  this  money  is                                                              
intended  for Title  I eligible  activities.   He deferred  to Ms.                                                              
Sanders to supply more specifics.                                                                                               
1:13:00 PM                                                                                                                    
LACEY   SANDERS,  Director,   Administrative   Services   Section,                                                              
Department of Education  & Early Development, stated  that federal                                                              
guidance  provided  to DEED  states  that  the  funding is  to  be                                                              
allocated to  school districts  based on  the Title I(a)  formula;                                                              
however,  it is  clear that  "the  money is  not ...  to be  spent                                                              
based on the Title  I funding."  She summarized  the guidance that                                                              
the  department   received.    She  said  the   local  educational                                                              
agencies have  the ability  to spend the  money on any  activities                                                              
authorized  under two  federal  Acts,  and they  can  spend it  on                                                              
emergency   response   coordination,    school   leader   support,                                                              
preparedness,  cleaning  supplies,  education  technology,  mental                                                              
health   support,  summer   learning,   and  additional   COVID-19                                                              
1:14:56 PM                                                                                                                    
MS. PITNEY  moved on  to RPL 05-2020-0075,  DEED, U.S.  Department                                                              
of Agriculture  Families First  Coronavirus Response  Act (FFCRA).                                                              
She said the  RPL on April 21  was for $5 million, and  the amount                                                              
was changed  to align  with the actual  award of $41,869,000  "and                                                              
change."   She  said  the  money will  be  available  to DEED  and                                                              
distributed  to  school  districts   and  other  sponsoring  state                                                              
agencies  based  on  their  claims   for  reimbursement  of  meals                                                              
served.  She said  the expectation is that the full  amount of the                                                              
grant  will  be  obligated  in FY  20;  however,  subgrantees  can                                                              
expend the funds in [FY] 21.                                                                                                    
1:16:44 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON  asked  whether school  districts  could                                                              
use these  dollars for "next  year's lunch"  in order to  "free up                                                              
MS. PITNEY deferred to Ms. Sanders.                                                                                             
1:17:36 PM                                                                                                                    
MS.  SANDERS stated  that the  funding  will be  allocated to  the                                                              
school  districts  based  on  the claims  submitted  to  DEED  for                                                              
reimbursement.   The claims would  be for expenditures  from March                                                              
through September  2020.  The funds  do not cover any  cost beyond                                                              
meal claims.                                                                                                                    
REPRESENTATIVE  JOSEPHSON responded  that  although that  answered                                                              
his question, what he heard was "not favorable news."                                                                           
MS.  SANDERS  added  her  understanding  that  when  the  COVID-19                                                              
declaration  was  announced,  school districts  "stepped  up"  and                                                              
began  providing meals  and  were  asked to  track  the number  of                                                              
meals that  were being  provided.  She  said the understanding  is                                                              
that the  $42 million can be  used as relief for  school districts                                                              
that  have increased  the  number of  meals  they would  typically                                                              
distribute,  in response  to COVID-19.   The  money would  provide                                                              
school districts support.                                                                                                       
1:19:28 PM                                                                                                                    
SENATOR  VON  IMHOF remarked  that  no  one really  knows  whether                                                              
school will be  back to normal operations in  the fall; therefore,                                                              
she  encouraged the  committee to  consider  that it  may have  to                                                              
revisit  this  topic.    She  said  the  onus  is  on  the  school                                                              
districts to  closely track  the meals  being provided  and submit                                                              
the claims "in a periodic and timely fashion."                                                                                  
1:20:39 PM                                                                                                                    
SENATOR GIESSEL  directed attention to  the first sentence  of the                                                              
second  paragraph of  page  2 of  the  RPL, which  read  [original                                                              
punctuation provided]:                                                                                                          
      The funds are anticipated to become available during                                                                      
      FY2020 and will be available for obligation through                                                                       
     September 30, 2021.                                                                                                        
SENATOR GIESSEL  said that that  language seems to be  in conflict                                                              
with  language on  page 1,  which  read:   "through September  30,                                                              
2020."  She asked Ms. Sanders if she could reconcile that.                                                                      
MS.  SANDERS answered  that the  initial  guidance the  department                                                              
received from  the U.S. Department  of Agriculture  indicated that                                                              
DEED  was going  to  be receiving  funding  through September  30,                                                              
2021.   A few days  ago the department  received the  actual grant                                                              
award, which  provides the  $42 million  and clearly outlines  the                                                              
end date of the  grant award as September 30, 2020.   She said the                                                              
states are working  closely with the U.S. Department  of Education                                                              
to  identify whether  there  will  be additional  flexibility,  as                                                              
well as seek  clarification as to whether additional  funding will                                                              
be coming.   She concluded,  "I believe  that this paragraph  just                                                              
wasn't updated after we received that guidance."                                                                                
SENATOR GIESSEL  directed attention to  the final sentence  of the                                                              
second  paragraph of  page  2 of  the  RPL, which  read  [original                                                              
punctuation provided]:                                                                                                          
      The full amount will be obligated in FY2020, however                                                                      
       sub grantees may be able to expend those funds in                                                                        
SENATOR GIESSEL  asked for clarification  that the money  could be                                                              
committed in FY 20 and spent in FY 21.                                                                                          
MS. SANDERS  explained that  the end of  the fiscal year  would be                                                              
June 30,  2020, and  the award  would end  on September  30, 2020,                                                              
thus the award would cross the two fiscal years.                                                                                
1:23:12 PM                                                                                                                    
CHAIR TUCK asked which statement should have been corrected.                                                                    
MS.  SANDERS answered,  "I  believe the  second  paragraph on  the                                                              
second  page  should   be  corrected  to  say:     "available  for                                                              
obligation through September 30, 2020."                                                                                         
1:23:46 PM                                                                                                                    
REPRESENTATIVE  SPOHNHOLZ  offered   her  understanding  that  Ms.                                                              
Sanders had  said this RPL is  for increased meal claims,  but she                                                              
pointed  to information  on page  1, paragraph  4, which uses  the                                                              
phrase "to  meet unexpected feeding needs."   She said  this is an                                                              
important  distinction.    She asked  for  confirmation  that  the                                                              
schools  would not  have  to demonstrate  an  increased number  of                                                              
meals served in order to claim the funds.                                                                                       
MS.  SANDERS suggested  perhaps she  is using  a term  differently                                                              
from  how   Representative  Spohnholz   may  consider  it.     She                                                              
explained that  there are school  districts that are  providing an                                                              
increased  number of  meals, which  has resulted  in an  increased                                                              
cost   to  the  districts.     She   said  she   thinks  she   and                                                              
Representative  Spohnholz are saying  the same  thing.   She added                                                              
that she agrees with what Representative Spohnholz said.                                                                        
1:25:31 PM                                                                                                                    
CHAIR TUCK  reminded the  committee that it  cannot amend  an RPL.                                                              
Nevertheless,  he said he  wants to make  sure the 9/30/2020  date                                                              
is duly noted.                                                                                                                  
1:25:48 PM                                                                                                                    
REPRESENTATIVE  JOSEPHSON posited  that what  Chair Tuck  had just                                                              
said was that he amended the RPL.                                                                                               
CHAIR TUCK  explained that he just  wanted to make sure  it was on                                                              
the record that "everybody understands it's a typo."                                                                            
1:26:10 PM                                                                                                                    
MS.  PITNEY proceeded  to RPL  05-2020-0076, within  DEED, for  an                                                              
amount  of  $421,500  via  the CARES  Act  for  the  Alaska  State                                                              
Council  on the  Arts.  Planned  use of  the funds  is limited  to                                                              
salary  support  for  positions  critical  to  the  organization's                                                              
mission, fees for  artists and contractual personnel  "to maintain                                                              
and expand  the period during which  the person has  engaged," and                                                              
facilities  costs such  as rent  and utilities.   Ms. Pitney  said                                                              
there are  no technical issues  with this  RPL.  The  Alaska State                                                              
Council  on  the  Arts  consistently  receives  funding  from  the                                                              
federal government  and has existing federal authority.   She said                                                              
RPL  05-2020-0076 just  provides  additional dollars  that can  be                                                              
used within the council for grants.                                                                                             
1:27:55 PM                                                                                                                    
SENATOR  VON  IMHOF  asked  whether  there is  a  time  frame  for                                                              
getting out the grants.                                                                                                         
1:28:47 PM                                                                                                                    
SENATOR BISHOP  drew Senator von  Imhof's attention to  the second                                                              
paragraph  of  the  second  page  of the  RPL,  which  relates  to                                                              
"Timing  Issues"   and  read  as  follows   [original  punctuation                                                              
     The CARES  Act was  passed by  Congress and signed  into                                                                   
     law  on March  27, 2020.  The  Alaska State  Legislature                                                                   
     recessed on  March 29, 2020.  Given the timing  and lack                                                                   
     of  guidance provided  by  the NEA,  ASCA  did not  have                                                                   
     enough  information to request  an appropriation  during                                                                   
     the current  legislative process.  Documentation  of the                                                                   
     amount of  funding became available  in an email  to the                                                                   
     Executive Director  from the State Arts Director  at the                                                                   
     NEA on  April 8, 2020. The  award packet will  follow in                                                                   
     a  few  weeks. The  funds  are  imminent as  State  Arts                                                                   
     Agencies  across the nation  are also receiving  similar                                                                   
     funding  and are listed  as such  on the NEA's  website.                                                                   
     Funds  will be available  to draw  down before June  30,                                                                   
     2020. The funds  do not lapse, and they  can be extended                                                                   
     until spent if not expended by September 30, 2022.                                                                         
SENATOR VON IMHOF remarked that it is interesting that this RPL                                                                 
is more generous than that for food and nutrition.                                                                              
CHAIR TUCK agreed it does seem that way in terms of timing, but                                                                 
not in terms of money.                                                                                                          
1:29:14 PM                                                                                                                    
MS. PITNEY moved on to RPL 12-2020-4049, Department of Public                                                                   
Safety (DPS), Alaska State Troopers,  Special Projects, which                                                                   
gives authority to receive a U.S. Department of Justice Byrne-                                                                  
Justice Assistance Grant Program (Byrne-JAG) grant authorized                                                                   
through the CARES Act.  She said the award has been received by                                                                 
DPS and will be allocated as follows:  $1 million to local law                                                                  
enforcement agencies on a rolling  reimbursement request basis;                                                                 
$1 million to state criminal justice  agencies, which will apply                                                                
to DPS for funding; and $1.6 million  retained by DPS to address                                                                
increased operational costs due to COVID-19.  Ms. Pitney related                                                                
that today's resubmission of the RPL provided clarity as to how                                                                 
much of the RPL authority is needed in FY 20 and how much is                                                                    
needed in FY 21.  The approval of the RPL would provide $750,000                                                                
for FY 20 and $2.8 million for FY 21.  She stated that Byrne-JAG                                                                
is commonly administered through DPS, and DPS has current                                                                       
federal authority.                                                                                                              
1:31:41 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON asked whether the three components Ms.                                                                 
Pitney listed came from the CARES Act or were a creation of the                                                                 
Office of the Governor.                                                                                                         
MS. PITNEY deferred to Mr. Steininger.                                                                                          
1:32:15 PM                                                                                                                    
MR.  STEINGER answered  that the  distribution  was determined  by                                                              
the  department  based  on  an  estimate  of  how  much  would  be                                                              
necessary for each of the areas.                                                                                                
REPRESENTATIVE  JOSEPHSON  noted  that  the  corrections  officers                                                              
that have been exposed  to the virus and have tested  positive for                                                              
it have  concerns about  accessing these funds  and wanted  him to                                                              
make  note of  that.   Further, he  noted that  these people  were                                                              
curious  about the  designation  of  $1.6 million  to  DPS and  no                                                              
dedication to the Department of Corrections (DOC).                                                                              
MR.  STEININGER responded  that  currently the  way  the grant  is                                                              
administered, the funds  go through DPS and can  be distributed to                                                              
DOC and  "other state agencies  that have eligibility  within this                                                              
grant to distribute funds to those state agencies."                                                                             
1:34:18 PM                                                                                                                    
SENATOR  BISHOP  asked  Mr.  Steininger   to  reconfirm  that  the                                                              
funding could  be, if  needed and requested  by DOC,  allocated to                                                              
MR. STEININGER answered that is correct.                                                                                        
1:34:36 PM                                                                                                                    
REPRESENTATIVE  NEUMAN asked whether  there were any  restrictions                                                              
that would  prevent DPS  from setting  up a  grant system  so that                                                              
communities  could apply  for grant funds  for neighborhood  watch                                                              
MS. PITNEY said she does not know.                                                                                              
MR.  STEININGER  suggested  someone  from DPS  could  answer  that                                                              
1:35:41 PM                                                                                                                    
ELIZABETH   DUNAYSKI,  Director,   Central  Office,  Division   of                                                              
Administrative  Services,  Department  of  Public  Safety,  stated                                                              
that the  nature of  the grant does  not allow  the funding  to be                                                              
used that way.   She explained that the grant  is specifically for                                                              
costs related to COVID-19 circumstances.                                                                                        
REPRESENTATIVE  NEUMAN  indicated he  was  interested  in how  DPS                                                              
could  give outreach  to local  communities  on how  to deal  with                                                              
COVID-19  issues.   He said  he  could follow-up  in a  discussion                                                              
with the department on his own.                                                                                                 
1:37:00 PM                                                                                                                    
MS. PITNEY  directed attention to  RPL 25-2020-8766,  for COVID-19                                                              
Federal  Transit  Administration  5311  grants, which  go  to  the                                                              
Department of  Transportation &  Public Facilities (DOT&PF).   The                                                              
amount  is  $29  million.    She  said  DOT&PF  traditionally  has                                                              
funding  for  the federal  transit  program  (FTP), and  this  RPL                                                              
would  add  an  additional  $29 million  to  an  existing  capital                                                              
project  that has $10  million in  federal authority  from  FY 20.                                                              
She  said this  is  a grant  program  that provides  expenses  for                                                              
transit   administration  recipients,   including   administrative                                                              
leave  for transit  workers.   It  notes  that  the Alaska  Marine                                                              
Highway System  (AMHS) is eligible to  apply for the grants.   She                                                              
said other  areas that  have applied are  communities, as  well as                                                              
the inter-island ferry operation.                                                                                               
1:39:04 PM                                                                                                                    
SENATOR VON  IMHOF noted  that DOT&PF  anticipated $10  million to                                                              
the Alaska  Marine Highway  and that left  $19 million of  the $29                                                              
million.    She  asked  whether   that  could  go  to  the  Alaska                                                              
Railroad.    She questioned  what  other  nonurban  transportation                                                              
systems Alaska  has, such as  bus systems, commuter  airports, and                                                              
interisland  ferries.   She  mentioned airports.    She asked  Ms.                                                              
Pitney what "this other $19 million could be used for?"                                                                         
MS. PITNEY  answered that  Juneau and  Kodiak, for example,  "have                                                              
received  funding from  this  in the  past."   She  deferred to  a                                                              
representative  from  DOT&PF  to  provide  further  clarification.                                                              
She added  that there  are separate grants  for over  $100 million                                                              
in airport  funding separately that  will be addressed at  a later                                                              
1:40:46 PM                                                                                                                    
ROB CARPENTER,  Deputy Commissioner, Department  of Transportation                                                              
& Public Facilities, stated:                                                                                                    
     So,  the   FTA  grant  is   a  program  -  we   have  13                                                                   
     subgrantees   that  are   in  the   rural  area   that's                                                                   
     basically everything  but Anchorage and Fairbanks.   So,                                                                   
     anything  with a  bus  system or  a  caravan.   Examples                                                                   
     would be  Juneau, Kenai, Tok  even has some  ... caravan                                                                   
     transit-type  systems that...    Those subgrantees  will                                                                   
     receive  funding  through   this.    We  set  aside  $10                                                                   
     million  for  those 13  subgrantees;  we set  aside  $10                                                                   
     million for  the [Alaska] Marine Highway System;  and we                                                                   
     have  $9 in reserve  to kind  of evaluate  how this  ...                                                                   
     progresses.   And if the subgrantees  require additional                                                                   
     money, we'll evaluate as ... time goes by.                                                                                 
SENATOR VON IMHOF  asked whether there is a date  certain when the                                                              
money in reserve has to "go out."                                                                                               
MR. CARPENTER  offered his understanding  that there is  no "lapse                                                              
date"  imposed by  the  federal government;  therefore,  currently                                                              
there is  no indication that  that money  will be taken  away from                                                              
the department.   He said the plan is to address  costs related to                                                              
COVID-19,  replace  revenue loss,  and  fund employees  and  other                                                              
SENATOR VON IMHOF  asked Mr. Carpenter whether he  is certain that                                                              
the money can be used to replace lost revenue.                                                                                  
MR. CARPENTER responded  that the intent is to  cover lost revenue                                                              
that "would have funded their operations."                                                                                      
1:44:35 PM                                                                                                                    
REPRESENTATIVE JOSEPHSON  noted that  AMHS had "suffered  a veto."                                                              
He  further  noted  that  the  guidance   language  regarding  the                                                              
current  RPL  uses  the phrase  "secondary  order  effects."    He                                                              
constructed a  hypothetical situation  in which AMHS  figures that                                                              
it will  lose "X" dollars  during its peak  season, May  1 through                                                              
mid-September, because  "no one wants to come here  from the Lower                                                              
48" [because  of the threat of  coronavirus], and it  decides that                                                              
"we  want to  submit that  through the  public transportation  and                                                              
have a  portion of the  $29 million paid  to it as the  division a                                                              
of the  Department of Transportation  [& Public Facilities]."   He                                                              
asked  for  help  in  understanding  how  this  would  work.    In                                                              
response  to a  request for  clarification, he  confirmed that  he                                                              
wants  to know  whether the  $29 million  can be  used to  replace                                                              
AMHS revenue.                                                                                                                   
MR. CARPENTER responded  that he thinks the department  could [use                                                              
the funds  for that  purpose]; however,  he said  that is  not the                                                              
intent of the department.  He clarified as follows:                                                                             
     Our intent is  to cover the significant costs  that were                                                                   
     incurred  as a result  of having to  pay employees.   We                                                                   
     had to  close down  the Ketchikan  shipyard in March  to                                                                   
     protect  employees.    We  sent  a  lot  of  them  home;                                                                   
     they're  still  being,  of  course,  paid  almost  COVID                                                                   
     leave, to speak  of.  ... So, like I said,  we're trying                                                                   
     to cover costs  of the [Alaska] Marine  Highway [System]                                                                   
     only,  at this  point.   ...  Our revenue  is  obviously                                                                   
     down  a significant  amount  going into  finishing  this                                                                   
     fiscal  year, and  we're not  even sure  how FY 21  will                                                                   
     proceed,   but   our   intent   with   this   money   is                                                                   
     specifically costs  of [Alaska] Marine  Highway [System]                                                                   
     that we're  incurring right  now.  The ...  subgrantees,                                                                   
     however,  can  use the  money  that  they receive  as  a                                                                   
     grant to replace their revenues they're losing.                                                                            
REPRESENTATIVE JOSEPHSON,  referencing the aforementioned  vetoes,                                                              
surmised  that when  the governor  spoke  about supplanting  funds                                                              
with federal dollars,  he was not speaking about  the ferry system                                                              
as people  think of it  - "boats on  the water with  passengers on                                                              
the boats" - but was "thinking about something else, I guess."                                                                  
1:47:50 PM                                                                                                                    
CHAIR TUCK  said he thinks federal  guidance related to  the CARES                                                              
Act  is pretty  clear that  the funds  cannot be  used as  revenue                                                              
replacement but only  be used for actions taken to  respond to the                                                              
public health  emergency.   He remarked, "So,  we say that  we can                                                              
use it for lost  revenue in this case but not  these other cases."                                                              
He asked for an explanation of what makes this the exception.                                                                   
1:48:22 PM                                                                                                                    
MS. PITNEY responded  that there are 125-150  different provisions                                                              
in the  CARES Act, and  each one has  different definitions.   She                                                              
said the  section of  the Corona Virus  Relief Fund  that provides                                                              
the state  with $1.25 billion has  strict guidance that  the funds                                                              
cannot be used  for government revenue replacement.   She said she                                                              
had  spoken  about  airport  funding,  which  clearly  allows  for                                                              
revenue replacement.   She  said although she  is not  as familiar                                                              
with the  transit grant, it appears  also to have a  provision for                                                              
revenue  replacement.     She  added   that  another   example  of                                                              
differences  between  provisions  can  be seen  in  their  varying                                                              
1:50:12 PM                                                                                                                    
REPRESENTATIVE SPOHNHOLZ  noted that  Mr. Carpenter had  said this                                                              
RPL applies  to transportation in  Alaska other than  in Anchorage                                                              
and Fairbanks.   She  asked whether  there are  any other  revenue                                                              
streams available for those urban transportation systems.                                                                       
MR. CARPENTER  answered that Anchorage  and Fairbanks  receive FTA                                                              
money  separately   outside  the   rural  funding  requested   for                                                              
subgrantees.    He  added that  Anchorage  and  Fairbanks  receive                                                              
money  directly  from  the federal  government,  not  through  the                                                              
State of Alaska.                                                                                                                
1:51:17 PM                                                                                                                    
SENATOR  BISHOP  asked Mr.  Carpenter  to confirm  his  assumption                                                              
that  some of  the rural  villages  and incorporated  second-class                                                              
cities  in Alaska  would be  able to  apply for  this funding,  as                                                              
MR. CARPENTER  confirmed that  is 100  percent correct;  the funds                                                              
are available to any community that operates a transit system.                                                                  
1:52:18 PM                                                                                                                    
MS. PITNEY  brought  attention to  the final  item on the  agenda,                                                              
RPL  45-2020-0002, University  of  Alaska, for  the  amount of  $5                                                              
million  and for  FY 20.   She said  the University  of Alaska  is                                                              
receiving  almost  $7.9 million  through  the CARES  Act  funding,                                                              
through the  Education Stabilization  Fund, and  it is  split into                                                              
two  components:   50 percent  to students  for emergency  student                                                              
aid;  and 50  percent  anticipated  as  being available  for  more                                                              
general relief  for university operations  and lost  revenue, with                                                              
more  guidance  expected.    She explained  the  reason  that  the                                                              
University  of   Alaska  is  requesting  $5  million   in  receipt                                                              
authority  rather than  $7.9 million,  is because  it already  has                                                              
existing receipt  authority and  is asking for  what it  needs and                                                              
"to have the authority in the right appropriation."                                                                             
CHAIR TUCK  summarized the  final RPL  and ascertained  that there                                                              
were no questions from the committee.                                                                                           
1:54:35 PM                                                                                                                    
The committee took an at-ease from 1:54 p.m. to 1:55 p.m.                                                                       
1:55:15 PM                                                                                                                    
SENATOR  BISHOP  moved  that  the  Legislative  Budget  and  Audit                                                              
Committee   approve  the   following  RPLs:     RPL   05-2020-0074                                                              
(Department  of Education  and Early  Development U.S.  Department                                                              
of Education CARES  Act), as revised on May 1,  2020; RPL 05-2020-                                                              
0075  (Department   of  Education   and  Early  Development   U.S.                                                              
Department  of Agriculture  FFCRA and  CARES Act),  as revised  on                                                              
May 1, 2020;  RPL 05-2020-0076 (Department of Education  and Early                                                              
Development  National  Endowment  for  the  Arts  CARES  Act),  as                                                              
revised on  May 1,  2020; RPL 12-2020-4049  (Department  of Public                                                              
Safety  USDOJ Byrne-JAG  CARES  Act), as  submitted  on April  21,                                                              
2020; RPL  25-2020-8766 (Department  of Transportation  and Public                                                              
Facilities  FY2020 COVID-19  Federal  Transit Administration  5311                                                              
Grants),  as  revised  on  May   1,  2020;  and  RPL  45-2020-0002                                                              
(University of  Alaska CARES  Act Federal Funding  Opportunities),                                                              
as revised on May 1, 2020.                                                                                                      
SENATOR  BISHOP noted  that the  passage of these  RPLs while  the                                                              
legislature is  still in session  "represents action  taken during                                                              
an unprecedented  public health disaster" and "does  not represent                                                              
an  abrogation of  the legislature's  preeminent  [constitutional]                                                              
appropriation authority."                                                                                                       
CHAIR  TUCK announced  that  there being  no  objection, the  RPLs                                                              
were approved.                                                                                                                  
1:58:24 PM                                                                                                                    
CHAIR  TUCK spoke  about  unprecedented  times occurring  and  the                                                              
high profile  of the committee  as a result  of getting  the funds                                                              
out  to communities.    He  thanked  the Division  of  Legislative                                                              
Finance, Legislative  Legal Services,  the Office of  Management &                                                              
Budget, the  Department of  Law, the Office  of the  Governor, and                                                              
the  many  other state  agencies  that  have  taken part  in  this                                                              
process.    He  said  industries   are  hurting,  communities  are                                                              
strained, and Alaskans  need relief; therefore, he  looked forward                                                              
to continuing discussion on the topic the following week.                                                                       
1:59:30 PM                                                                                                                    
The Legislative  Budget and Audit  Committee meeting  was recessed                                                              
at 1:59 p.m. to  be reconvened at 1:00 p.m. on May  6, 2020.  [The                                                              
meeting  was never  reconvened; a  new meeting  was scheduled  and                                                              
held on May 11, 2020.]                                                                                                          

Document Name Date/Time Subjects
20-05-01 Agenda.pdf JBUD 5/1/2020 1:00:00 PM
Updated RPL Packet for May 1 Meeting.pdf JBUD 5/1/2020 1:00:00 PM