Legislature(2019 - 2020)Anch LIO Lg Conf Rm

04/15/2020 10:00 AM House FINANCE

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10:04:50 AM Start
10:06:20 AM Update: Cares Act Coronavirus Aid, Relief, and Economic Security Act
11:57:00 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Update: CARES ACT Coronavirus Aid, Relief, and TELECONFERENCED
Economic Security Act by
- Pat Pitney, Director, Legislative Finance Div.
- Megan Wallace, Director, Legislative Legal
-- Testimony <Invitation Only> --
**Streamed live on AKL.tv**
                  HOUSE FINANCE COMMITTEE                                                                                       
                       ANCHORAGE LIO                                                                                            
                      April 15, 2020                                                                                            
                        10:04 a.m.                                                                                              
10:04:50 AM                                                                                                                   
[Note:  meeting  took place  in  the  Anchorage LIO  and  was                                                                   
recorded from Juneau.]                                                                                                          
CALL TO ORDER                                                                                                                 
Co-Chair Foster  called the  House Finance Committee  meeting                                                                   
to order at 10:04 a.m.                                                                                                          
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Jennifer Johnston, Co-Chair                                                                                      
Representative Dan Ortiz, Vice-Chair (via teleconference)                                                                       
Representative Ben Carpenter (via teleconference)                                                                               
Representative Andy Josephson (via teleconference)                                                                              
Representative Bart LeBon (via teleconference)                                                                                  
Representative Kelly Merrick (via teleconference)                                                                               
Representative Colleen Sullivan-Leonard(via  teleconference)                                                                    
Representative Cathy Tilton (via teleconference)                                                                                
Representative Adam Wool (via teleconference)                                                                                   
MEMBERS ABSENT                                                                                                                
Representative Gary Knopp                                                                                                       
PRESENT VIA TELECONFERENCE                                                                                                    
Pat  Pitney, Director,  Legislative  Finance Division;  Megan                                                                   
Wallace, Director,  Legislative Legal Services,  Alaska State                                                                   
Legislature;  Representative   Bryce  Edgmon;  Representative                                                                   
Sara   Hannan    Representative   Dan   Ortiz,    Vice-Chair;                                                                   
Representative    Ben    Carpenter;    Representative    Andy                                                                   
Josephson;  Representative Bart  LeBon; Representative  Kelly                                                                   
Merrick;     Representative     Colleen     Sullivan-Leonard;                                                                   
Representative Cathy Tilton; Representative Adam Wool.                                                                          
UPDATE:  CARES  ACT CORONAVIRUS  AID,  RELIEF,  AND  ECONOMIC                                                                   
SECURITY ACT                                                                                                                    
10:06:20 AM                                                                                                                   
Co-Chair Foster reviewed the meeting agenda.                                                                                    
^UPDATE: CARES ACT CORONAVIRUS AID, RELIEF, AND ECONOMIC                                                                      
SECURITY ACT                                                                                                                  
10:08:08 AM                                                                                                                   
PAT  PITNEY,  DIRECTOR,  LEGISLATIVE  FINANCE  DIVISION  (via                                                                   
teleconference),  referenced   two  documents  including  the                                                                   
"Federal CARES  Act Summary," dated  April 15, 2020  (copy on                                                                   
file). She  reviewed the  four categories  listed on  slide 2                                                                   
titled CARES Act Provisions:                                                                                                    
     The CARES Act is comprehensive. Legislative Finance                                                                        
     produced a CARES Act Summary  organized in four                                                                            
          (1) Federal funds a State will receive directly                                                                     
          (2) Federal funds to non-state entities, (tribal,                                                                     
              local government entity, or owners of a                                                                           
              medical hospital / facility)                                                                                      
          (3) Federal funds to Federal agencies for grant                                                                       
              programs that may be available to the state                                                                       
              or non-state entities                                                                                             
          (4) General items of interest                                                                                         
     *This presentation addresses the categories in reverse                                                                     
10:10:14 AM                                                                                                                   
Co-Chair Foster recognized that Representative Bryce                                                                            
Edgmon, Speaker of the House, joined the meeting online.                                                                        
Ms. Pitney turned to slide 3 titled CARES Act Provisions:                                                                       
   • General items of interest (Section 4 Page 16):                                                                           
      • Extends Real ID deadline to Sept. 30, 2021.                                                                           
        • Provides a direct payment of up to $1,200 to                                                                        
          Alaskans with  $500 for each dependent  child under                                                                   
          17 years old.                                                                                                         
        • Small Business Administration (SBA) emergency                                                                       
          grants  of  up  to  $10,000  to  provide  immediate                                                                   
          relief  for operating costs,  can cover  six months                                                                   
          of  payments  for  businesses   with  existing  SBA                                                                   
          loans  with   rent,  mortgage  and   utility  costs                                                                   
          forgiveness,  and loans for personnel  costs can be                                                                   
          reimbursed    100%   through    tax   credits    to                                                                   
          participating  businesses.   (UA's  Small  Business                                                                   
          Development Center for additional information)                                                                        
        • Corporation for Public Broadcasting to make                                                                         
          fiscal  stabilization grants  to public  television                                                                   
          and radio stations $75 million.                                                                                       
        • Requires coverage of COVID-19 testing in health                                                                     
Ms. Pitney addressed  general items of interest  in the CARES                                                                   
Act.  She reviewed  other items  on the  slide including  the                                                                   
direct  payments   to  individuals  of  up  to   $1,200.  She                                                                   
reported  that  the  University  Small  Business  Development                                                                   
Center  was the primary  resource  for the  SBA loans  and in                                                                   
addition,  the act required  health plans  to cover  COVID-19                                                                   
10:13:55 AM                                                                                                                   
Ms. Pitney moved to slide 4 titled  CARES Act Provisions:                                                                       
        • Federal $4.3 billion to support federal, state,                                                                     
          and local public health agencies                                                                                      
             • $1.5 billion for grants or cooperative                                                                         
               agreements   to    carry   out   surveillance,                                                                   
               epidemiology, mitigation, communications and                                                                     
               other preparedness and response activities                                                                       
             • $400 million in election security grants in                                                                    
             the 2020 federal election cycle.                                                                                   
             • $40.7 million  for   establishing  a   grant                                                                   
               program  for geriatric education  and training                                                                   
             • $5 billion for   the  Community  Development                                                                   
               Block Grant (CDBG) program                                                                                       
             • $1 billion  to   states  to  distribute   to                                                                   
               eligible  local   entities  (Community  Action                                                                   
               Agencies  or  CAAs)  to design  and  implement                                                                   
               anti-poverty programs                                                                                            
             • $2 billion  from  U.S.  Housing   and  Urban                                                                   
               Development to existing grantees                                                                                 
             • $4 billion for Homeless Assistance Grants                                                                      
             • $250 million   as  grants   or   cooperative                                                                   
               agreements  with grantees  or sub-grantees  of                                                                   
               the Hospital Preparedness Program.                                                                               
             • $100 billion for grants to hospitals, public                                                                   
               entities,    not-for-profit   entities,    and                                                                   
               Medicare-   and  Medicaid-enrolled   suppliers                                                                   
               and   institutional  providers.   Helps  cover                                                                   
               unreimbursed  health  care-  related  expenses                                                                   
               or lost revenue as a result of COVID-19.                                                                         
             • $275 million in cooperative  agreements  and                                                                   
               grants  to expand  services  and capacity  for                                                                   
               rural hospitals                                                                                                  
10:17:59 AM                                                                                                                   
Ms. Pitney moved to slide 5 titled CARES Act Provisions:"                                                                       
      Federal funds to Federal agencies for grant programs                                                                      
     that may be available to the state or non-state                                                                            
     entities (Section 3, Page 10)                                                                                              
             • Substance Abuse and Mental  Health  Services                                                                   
               Administration (SAMHSA)                                                                                          
             .notdef $425 million to the for mental health and                                                                  
               substance use with certified community                                                                           
               behavioral health clinics                                                                                        
             .notdef $250 million in grants using the Certified                                                                 
               Community Behavioral Health Clinic Expansion                                                                     
               Grant program                                                                                                    
             • $50 million   specifically   allocated   for                                                                   
               suicide prevention                                                                                               
             • $15 million shall be specifically  allocated                                                                   
               to   tribes,   tribal   organizations,   urban                                                                   
               Indian  health  organizations,  or  health  or                                                                   
               behavioral   health   service   providers   to                                                                   
             square4 $100 million in grants for a pilot program                                                               
               for rural broadband access.                                                                                      
             square4 $25 million to support the Distance Learning                                                             
               and Telemedicine program                                                                                         
             square4 $10 billion in FAA, Airport  Improvement                                                                 
             square4 $100 million in additional funding for Safe                                                              
               Schools and Citizenship Education                                                                                
             square4 $45 million for grants to states to support                                                              
               the child welfare needs of families during                                                                       
               this crisis                                                                                                      
10:19:32 AM                                                                                                                   
Ms. Pitney turned to slide 6 titled "CARES Act Provisions:"                                                                     
and continued to review the Provisions:                                                                                         
     square4 $10 million available for service coordinators and                                                               
        the continuation of existing congregate service                                                                         
        grants for residents of assisted housing projects.                                                                      
          o $955 million to the Administration for                                                                            
             Community Living (ACL) services  for seniors and                                                                   
             disabled   individuals   as    well   as   their                                                                   
          o $85 million for independent living centers                                                                        
             currently receiving federal grant funding,                                                                         
          o $29 million for each fiscal year through FY                                                                       
             2025 for Telehealth network and telehealth                                                                         
             resource centers grant programs.                                                                                   
          o $150 million in Grants for Construction of                                                                        
             State Extended Care Facilities.                                                                                    
          o $14.4 billion for VA programs, including the                                                                      
             Health Care for Homeless Veterans                                                                                  
          o $850 million for the Byrne JAG program grants                                                                     
             to  help enable  States,  among  other  eligible                                                                   
             entities,  to  utilize  emerging  and  evidence-                                                                   
             based  approaches   to   address  the   COVID-19                                                                   
             pandemic. The funds  will allow state  and local                                                                   
             police  departments  and  jails  to  meet  local                                                                   
10:21:10 AM                                                                                                                   
Ms. Pitney noted that slides 7 and 8 were almost identical                                                                      
- she skipped slide 7. She addressed slide 8 titled "CARES                                                                      
Act Provisions                                                                                                                  
     Federal funds available directly to a non-state                                                                            
     entities, local government entities or owners of a                                                                         
     medical hospital or facility (Section 2, Page 8)                                                                           
            $750 million in additional funding to the Head                                                                      
            Start program to continue serving eligible                                                                          
            $25 billion for transit systems                                                                                     
            $453 million for the Bureau of Indian Affairs                                                                       
            to prepare for and respond to the coronavirus,                                                                      
            including for public safety and justice                                                                             
            programs, welfare assistance and social                                                                             
            services programs, and other tribal government                                                                      
            Indian Health Service (IHS) $1.032 billion for                                                                      
            public health support, electronic health record                                                                     
            modernization, telehealth, and other                                                                                
            technology upgrades, $65 million of the funding                                                                     
            will be used for electronic health record                                                                           
            stabilization and support and $450 million will                                                                     
            be distributed through IHS directly operated                                                                        
            $100 million for the Food Distribution Program                                                                      
            on Indian Reservations program (FDPIR) to                                                                           
            prevent, prepare for, and respond to                                                                                
          o $50 million shall be for facility improvements                                                                      
            and equipment upgrades.                                                                                             
          o $50 million shall be for the costs relating to                                                                      
            additional food purchases.                                                                                          
     All federally recognized Tribes in Alaska are all                                                                          
     eligible to administer FDPIR.                                                                                              
            $8 billion of Coronavirus Relief Fund is aside                                                                      
            for tribal governments nation-wide for expenses                                                                     
            based on increased COVID-19 related                                                                                 
            expenditures of each such tribal government (or                                                                     
          a tribally-owned entity of such tribal                                                                                
            government) relative to aggregate expenditures                                                                      
            in fiscal year 2019.                                                                                                
Ms.  Pitney elaborated  on the  Head  Start program  funding.                                                                   
She commented  that Head Start  funding typically  required a                                                                   
local  match covered  by  the state.  The  CARES Act  funding                                                                   
provided  the funding  without  the local  match  requirement                                                                   
and included funding for summer programs.                                                                                       
10:24:00 AM                                                                                                                   
Ms.   Pitney  advanced   to  slide   9   titled  "CARES   Act                                                                   
Provisions.  She  reminded committee members that  the dollar                                                                   
figures  in the  presentation  were the  federal numbers  and                                                                   
Alaska would receive a portion based on a formula.                                                                              
     Federal funds states will receive directly (Section 1,                                                                     
     Page 2)                                                                                                                    
            $45 billion nation-wide for the Disaster Relief                                                                     
            Fund (DRF) for the immediate needs                                                                                  
            $1.4 billion nation-wide for deployments of the                                                                     
            National Guard.                                                                                                     
            Expanded unemployment insurance from three to                                                                       
            four months, and provides temporary                                                                                 
            unemployment compensation of $600 per week for                                                                      
            up to 4 months                                                                                                      
            $500 billion Economic Stabilization lending                                                                         
            fund for businesses, cities, and states.                                                                            
            $56 million provided nationwide to maintain                                                                         
            existing Essential Air Service (EAS) to rural                                                                       
            $8.8 billion nationally in additional funds                                                                         
            through September 30, 2021 to support federal                                                                       
            child nutrition programs.                                                                                           
            $450 million for the Emergency Food Assistance                                                                      
            Program (TEFAP) including $150 million for                                                                          
            costs associated with the distribution of                                                                           
            $15.5 billion for a Contingency Reserve Fund                                                                        
            within SNAP to support waiver authorities                                                                           
            included in the Families First Coronavirus                                                                          
            Pandemic Response Act (PL 116-127)                                                                                  
       $1 billion for Community Services Block Grant                                                                            
       (CSBG), which provides funds to states to distribute                                                                     
       to eligible local entities (Community Action                                                                             
      Agencies or CAAs) to design and implement anti-                                                                           
       poverty programs.                                                                                                        
     $900 million supplemental funding for the LIHEAP                                                                           
       program to further support low-income, disabled, and                                                                     
       elderly populations                                                                                                      
Ms.  Pitney elucidated  that the  unemployment insurance  was                                                                   
additive   on  top   of  Alaska's   unemployment  funds   and                                                                   
increased  payments  by  $600  per week.  The  payments  were                                                                   
extended  to  traditionally non-eligible  workers;  those  in                                                                   
the gig  economy or  self-contractors.  The money equated  to                                                                   
100  percent wage  replacement  for someone  earning  $60,000                                                                   
per  year.  She related  that  the  Department of  Labor  and                                                                   
Workforce  Development   (DOL)  was  working   diligently  on                                                                   
application  and  distribution  procedures to  ensure  prompt                                                                   
disbursement of funds.                                                                                                          
10:29:03 AM                                                                                                                   
Ms.   Pitney  turned   to   slide   10  titled   "CARES   Act                                                                   
Provisions."  and reviewed  the  federal  funds states  would                                                                   
      Federal funds states will receive directly                                                                                
            $30.75 billion nation-wide for an Education                                                                         
            Stabilization Fund for states, school districts                                                                     
            and institutions of higher education.                                                                               
      .notdef $3 billion is shared by the states for                                                                            
            governors to allocate at their discretion for                                                                       
            emergency support grants.                                                                                           
          .notdef $13.2 billion available for formula Elementary                                                                
            and Secondary Education grants to states, which                                                                     
            will then distribute 90% of funds to LEAs based                                                                     
            on their proportional allocation of Elementary                                                                      
            and Secondary Education Act Title I-A funds.                                                                        
          .notdef $14 billion for emergency relief for                                                                          
            Institutions of Higher Education                                                                                    
            $150 billion Coronavirus Relief Fund for state,                                                                     
            local and tribal governments to be paid out                                                                         
            within 30 days of enactment.                                                                                        
          .notdef Alaskas expects $1.25 billion.                                                                                
          .notdef Alaska has no municipalities with a population                                                                
            over 500,000, and would likely retain the full                                                                      
            $1.25 billion. The Act allowed for 45% set                                                                          
            aside for localities with a population over                                                                         
10:31:13 AM                                                                                                                   
Ms.  Pitney elaborated  that  99.5 percent  of  the funds  of                                                                   
Alaska's  portion of  the $13.2  billion would  go to  school                                                                   
districts.  She indicated  that Alaskas   portion of  the $14                                                                   
billion  emergency relief  funding for  higher education  was                                                                   
approximately  $10 million,  of  which $7.5  million was  for                                                                   
the University of  Alaska. She added that much  of the higher                                                                   
education  funding was  intended  for students  based on  the                                                                   
Pell Grant  formula. She learned  that the tribal  government                                                                   
funding would  be distributed  by April  24, 2020.  The state                                                                   
expected to  receive the entire  $1.25 billion along  with 18                                                                   
other  states, which  was the  minimum  amount. Since  Alaska                                                                   
lacked  municipalities with  a population  over 500,000,  the                                                                   
state  would manage  the  funding. She  pointed  to slide  11                                                                   
titled Guidance to Date on the Coronavirus Relief Fund:                                                                         
Ms. Pitney read from slide 11:                                                                                                  
     .notdef The CARES Act requires that the payments from the                                                                  
     Coronavirus Relief Fund (Sec. 5001) only be used to                                                                        
     cover expenses that                                                                                                        
            (1) are necessary expenditures incurred due to                                                                      
            the public health emergency with respect to the                                                                     
            Coronavirus Disease 2019 (COVID19);                                                                                 
            (2) were not accounted for in the budget most                                                                       
            recently approved as of March 27, 2020 (the                                                                         
            date of enactment of the CARES Act) for the                                                                         
            State or government; and                                                                                            
            (3) were incurred during the period that begins                                                                     
            on March 1, 2020 and ends on December 30, 2020.                                                                     
          .notdef Additional information on eligible uses of Fund                                                               
            disbursements by governments will be posted as                                                                      
            it becomes available.                                                                                               
Ms.  Pitney anticipated  that the  treasury department  would                                                                   
be sending additional  guidance any day. She  shared that the                                                                   
guidance  she received  from federal officials  thus  far was                                                                   
sparse;  the  funding  was  for  costs  associated  with  the                                                                   
COVID-19  outbreak  from  March   2020  through  the  end  of                                                                   
December  2020.  She  concluded   her  presentation  and  was                                                                   
available for questions.                                                                                                        
10:35:21 AM                                                                                                                   
Co-Chair Foster  recognized that Representative  Sarah Hannan                                                                   
had joined the meeting in Juneau.                                                                                               
Co-Chair  Johnston cited  slide  10 regarding  the  Education                                                                   
Stabilization Fund.  She asked if the state  currently, could                                                                   
accept the  funds because  of having  an established  formula                                                                   
in  place.  She  was  trying  to  ascertain  what  items  the                                                                   
legislature  would  need to  give  receipt authority  to  and                                                                   
what items contained no appropriating vehicle.                                                                                  
10:37:15 AM                                                                                                                   
Ms. Pitney answered  that the formula in place was  set up by                                                                   
the  federal   government.  She  delineated  that   both  the                                                                   
Department  of Education  and  Early Development  (DEED)  and                                                                   
the   University  of   Alaska  (UA)   had  existing   federal                                                                   
appropriations.  The degree  to  which  the additional  funds                                                                   
exceeded federal  receipt authority would  require additional                                                                   
legislative  action. Depending  on the  use of the  education                                                                   
funds  there  were  currently   federal  appropriations  that                                                                   
could  potentially  be  increased   by  the  Revised  Program                                                                   
Legislative  (RPL)  process. She  believed  that  Legislative                                                                   
Legal Services would  cover the range of actions  that may be                                                                   
necessary.  Co-Chair  Johnston  wanted clarification  on  the                                                                   
budget process  before going to  the legal process.  She felt                                                                   
that  it would  be  helpful regarding  the  block grants  and                                                                   
wondered  whether the  grants go  through the  state or  went                                                                   
directly to communities.  She wanted to understand  where the                                                                   
state's  responsibility was.  Ms. Pitney  answered that  some                                                                   
pieces  of the  block grants  went  to the  state and  others                                                                   
went  directly to  communities.  She pointed  out that  items                                                                   
like  the $25  million  in  transit funding  was  distributed                                                                   
directly  to communities.  Co-Chair  Johnston suggested  that                                                                   
it  would be  helpful to  understand where  funding from  the                                                                   
CARES  Act was  already  in place  so  the legislature  could                                                                   
properly address the needs.                                                                                                     
10:40:28 AM                                                                                                                   
Representative Josephson  asked for clarification  on several                                                                   
items.  He  referenced   a  legal  memo  by   Megan  Wallace,                                                                   
Director,   Legislative   Legal    Services,   Alaska   State                                                                   
Legislature.  He  related  that  the  memo  stated  emergency                                                                   
funding  cannot be used  to supplement  regular budget  items                                                                   
not affected by  the coronavirus. He deduced  that the budget                                                                   
from the  prior year determined  whether an item  was related                                                                   
to  COVID 19.  Ms.  Pitney replied  in  the affirmative.  She                                                                   
indicated that  the funding was  for the extra  expenses that                                                                   
were incurred at  the time the CARES Act was  enacted. The FY                                                                   
21 budget  and the FY 20  supplemental were passed  after the                                                                   
enactment of  the CARES Act.  She deferred further  answer to                                                                   
Ms. Wallace to set the stage.                                                                                                   
Representative  Josephson  considered  the $1.25  billion  in                                                                   
federal  funding. He  thought that  the funding  should  be a                                                                   
focus  but   noted  the   importance  of  understanding   all                                                                   
categories  of the  CARES  Act funding  relative  to the  RPL                                                                   
process.  He ascertained  that  while  the $1.25  billion  in                                                                   
funding was  critical   there was other Cares  Act funding to                                                                   
consider. He  asked whether his  statement was  accurate. Ms.                                                                   
Pitney responded  in the  affirmative.  She reported  that it                                                                   
was  important  to  know  if   the  state  had  the  existing                                                                   
mechanism  to accept  and implement  the  funding for  grants                                                                   
from other  federal agencies.  She exemplified the  Temporary                                                                   
Assistance for  Needy Families  (TANF) program where  the RPL                                                                   
process  could be  used to  authorize the  CARES Act  funding                                                                   
that  exceeded the  existing authority.  She reiterated  that                                                                   
Ms. Wallace's  testimony regarding  the range of  options for                                                                   
funding   distribution   authority  framed   the   discussion                                                                   
regarding specific funding.                                                                                                     
Co-Chair  Foster set  aside any  legal  questions related  to                                                                   
the  $1.2 billion  and the  RPL  process for  the moment.  He                                                                   
would have Ms. Wallace answer the question later.                                                                               
10:45:19 AM                                                                                                                   
Representative  Wool  asked  about the  additional  $600  per                                                                   
week  to   compensate  for   a  $60,000   per  year   job  in                                                                   
Unemployment Insurance  (UI) benefits. He did  not understand                                                                   
how  the numbers  added up.  Ms.  Pitney answered  that if  a                                                                   
person earned  $60,000 per  year prior  to losing  their job,                                                                   
the $600 per  week plus Alaska's existing maximum  benefit of                                                                   
$370 per  week would replace the  income in full.  She voiced                                                                   
that if  a person made $60,000  or less the extra  $600 would                                                                   
replace  the  wage.  Representative  Wool  stated  that  that                                                                   
total  amounted to  $52,000 per  year.  Ms. Pitney  clarified                                                                   
that  there  were additional  funds  for  a family  of  four.                                                                   
Representative Wool  asked for an  estimate of the  number of                                                                   
applicants  based  on  the  current  trajectory.  Ms.  Pitney                                                                   
answered that she  was receiving weekly updates  from DOL and                                                                   
indicated that  the applications  were up significantly  from                                                                   
the previous year.  She would provide the data  following the                                                                   
meeting. She added  that anyone who applied  and was eligible                                                                   
for  UI  was  automatically  awarded  the $600  per  week  in                                                                   
federal  funds  in addition  to  the  funds provided  by  the                                                                   
10:48:41 AM                                                                                                                   
Representative Wool  referenced Alaskas  $10  million portion                                                                   
of the $30  billion for the Education Stabilization  Fund. He                                                                   
asked whether  there was any other  fund that would  help the                                                                   
University   besides   the   $7.5  million   cited   in   the                                                                   
presentation.  Ms.  Pitney  confirmed  that out  of  the  $10                                                                   
million   coming  to   the  state   associated  with   higher                                                                   
education  the University  would receive  7.5 million.  Other                                                                   
colleges in  the state would receive  some of the  funds. The                                                                   
portion not  sent to the students  would be available  to the                                                                   
university,  but it was  a small amount.  She was  unaware of                                                                   
other  funds available  to  help cover  other  losses at  the                                                                   
Representative  LeBon asked about  the support for  hospitals                                                                   
in the  amount of  $100 billion  cited on  slide 4.  He asked                                                                   
how  the funds  would be  distributed  to medical  facilities                                                                   
throughout  the state.  Ms. Pitney answered  that the  grants                                                                   
were  managed and  distributed  by the  Centers for  Medicare                                                                   
and Medicaid  Services  (CMS) or another  federal Health  and                                                                   
Social Service  entity. The  hospitals were working  directly                                                                   
with the  federal agencies to  secure the funds.  The medical                                                                   
facility   funding  belonged   to  the   category  of   money                                                                   
available in grants from the federal government.                                                                                
10:52:34 AM                                                                                                                   
Vice-Chair   Ortiz  referenced   the   potential  monies   to                                                                   
businesses   that  had   been   shut  down   and   individual                                                                   
contractors who worked  for the businesses. He  noted that it                                                                   
had been described  as a loan program, but he  heard that the                                                                   
loans  may  be  forgiven.  He   wondered  if  the  individual                                                                   
business would  apply directly for  the funds to  the federal                                                                   
government or  through the state.  Ms. Pitney  referenced the                                                                   
program  through  the Small  Business  Administration  (SBA).                                                                   
Vice-Chair Ortiz  interjected a question regarding  the slide                                                                   
number.  Ms. Pitney  directed  attention to  slide  3 of  the                                                                   
presentation  or on page  16 of  the summary document  titled                                                                   
 Explanation of  Federal Stimulus  Bill  (copy on  file). She                                                                   
elaborated that  the best resource  for help in  applying for                                                                   
the  program  was  the  Small   Business  Development  Center                                                                   
(SBDC)   at  the   University   of  Alaska.   The  SBDC   was                                                                   
specifically set  up to link  small businesses with  the SBA.                                                                   
The SBA  loans were administered  through a bank.  She listed                                                                   
the  three types  of assistance:  a $10,000  grant; a  short-                                                                   
term  loan with  forgiveness if  used for  payroll and  other                                                                   
business related  expenses; and a  loan that could  be repaid                                                                   
through future tax credits.                                                                                                     
10:55:49 AM                                                                                                                   
Representative  LeBon interjected  with his understanding  of                                                                   
the SBA program.  He informed the committee that   there were                                                                   
several  programs.  He  contended  that  the  banks  did  not                                                                   
manage the  $10,000 maximum  loan program  and reported  that                                                                   
it was  managed by  the SBA. However,  the banks  managed the                                                                   
Paycheck  Protection Program  (PPP). He  relayed that  he had                                                                   
been helping  his prior bank  employer process the  PPP loans                                                                   
and  had  processed  over  250   loans  valued  at  over  $30                                                                   
million.  He elucidated  that  the repayment  period was  two                                                                   
years  and interest  only applied  for six  months. The  loan                                                                   
could  be used  for  business related  expenses  but, if  the                                                                   
business  used   most  of  the  money  for   payroll  related                                                                   
expenses, that amount could be forgiven.                                                                                        
Vice-Chair  Ortiz cited slide  9 related  to $500  billion in                                                                   
economic   stabilization   lending  funds   for   businesses,                                                                   
cities, and  states. He  asked whether  the item was  related                                                                   
to the  SBA funds.  Ms. Pitney answered  in the  negative and                                                                   
related  that   the  item   was  completely  different.   She                                                                   
elaborated   that  he   was  referring   to  a   major   debt                                                                   
refinancing mechanism   for states  and cities that  utilized                                                                   
low interest mechanisms through the federal government.                                                                         
10:58:24 AM                                                                                                                   
Representative   Josephson   referred   to   the   discussion                                                                   
regarding  the  $100  billion   for  hospitals  and  Medicaid                                                                   
providers,  etc. He  inquired whether  the legislature  would                                                                   
be privy  to the information  regarding the grant  recipients                                                                   
who  received awards  directly from  the federal  government.                                                                   
He  reasoned that  the state  may need  the information  when                                                                   
disbursing  limited resources  in FY 22.  The state  may want                                                                   
to  provide  resources  to  entities  that  did  not  receive                                                                   
federal aid.                                                                                                                    
Co-Chair Johnston  replied that  some of the  information may                                                                   
be coming from  the reporting requirements spelled  out in SB
241  [SB  241  -  Extending  COVID  19  Declaration/Relief  -                                                                   
Chapter 10  SLA 20 - 04/09/2020].  She communicated  that the                                                                   
administration  was required  to  send  monthly reports.  She                                                                   
did  not   know  whether   they  would  receive   information                                                                   
regarding federal  monies that  went directly to  nonprofits.                                                                   
She believed that  they would see the information  related to                                                                   
11:01:14 AM                                                                                                                   
Vice-Chair Ortiz  referenced the $500 billion on  slide 9. He                                                                   
thought a  comment had been made  by Ms. Pitney  that perhaps                                                                   
some of the  funds could go towards a larger  contribution to                                                                   
Public  Employees'  Retirement  System (PERS)  and  Teachers'                                                                   
Retirement   System  (TRS).   He   asked  if   there  was   a                                                                   
legislative  mechanism  in  place  for that  to  happen.  Ms.                                                                   
Pitney   answered  that   several   years   back  a   pension                                                                   
obligation bond  bill had been  passed and had not  been used                                                                   
by the  administration. She  maintained that the  legislation                                                                   
would require  another  piece of legislation  to authorize  a                                                                   
transaction  between the  state and  federal government.  The                                                                   
legislation  would  work  similarly to  the  current  pension                                                                   
obligation   bond   provisions   currently  in   place.   She                                                                   
cautioned  that  the  financial  terms would  be  a  deciding                                                                   
factor when weighing the benefits of such an option. Vice-                                                                      
Chair  Ortiz considered  it was  an issue  for a later  time.                                                                   
Ms. Pitney agreed with the statement.                                                                                           
11:03:43 AM                                                                                                                   
Representative   Sullivan-Leonard  asked   if  there   was  a                                                                   
specific federal  formula directing  how the CARES  Act funds                                                                   
would be dispersed.  Ms. Pitney answered that  there were 100                                                                   
or more  provisions in the CARES  Act. She relayed  that some                                                                   
of  the provisions  came  with  a distribution  formula.  She                                                                   
provided  the example  of  the Education  Stabilization  Fund                                                                   
that had  a distribution  formula for  each state.  The $1.25                                                                   
billion  relief  fund  lacked  any guidance  other  than  the                                                                   
funds  must be  used for  unanticipated  expenses related  to                                                                   
the  COVID  19 preparation,  mitigation,  and  response.  She                                                                   
reiterated that the  funds would be deposited  into the state                                                                   
treasury  by  the 24th  of  April.  Representative  Sullivan-                                                                   
Leonard referenced  $88 million  in funding cited  by Senator                                                                   
Lisa Murkowski for  tribal entities. The senator  was waiting                                                                   
for specifics  regarding distribution.  She wondered  whether                                                                   
Alaska was   putting the  cart before  the horse   and should                                                                   
wait  for further  federal guidance  before distributing  the                                                                   
11:06:43 AM                                                                                                                   
Ms. Pitney  believed that  there were  many questions  yet to                                                                   
be answered  and there  would  be many moving  parts and  the                                                                   
issues would be  addressed as necessary over  time. She noted                                                                   
that  the  $88  billion  that  Senator  Murkowski  cited  was                                                                   
different from the $1.25 billion coming to Alaska.                                                                              
11:07:38 AM                                                                                                                   
Representative  Tilton  referenced  slide 10  and  considered                                                                   
the  $1.25  billion.  She  thought  there  may  be  something                                                                   
missing   regarding   economic    impact.   She   asked   for                                                                   
clarification. Ms.  Pitney answered that the  COVID-19 relief                                                                   
fund  focused on  unanticipated expenditures  related to  the                                                                   
COVID-19  pandemic  response.   She  recounted  that  in  the                                                                   
budget that  was adopted there  was funding for  the Division                                                                   
of Public  Health and  open ended  federal receipt  authority                                                                   
in  the  public  health  area   for  outbreak  response.  She                                                                   
deduced that to  the degree that federal and  state money was                                                                   
spent   directly   in  the   public   health   arena  -   the                                                                   
administration  had the  spending authority  at present.  The                                                                   
state's budget accommodated  the use of the  funds for public                                                                   
health  response. Any  amount of  the funding  that could  be                                                                   
used for an  economic response was not currently  part of the                                                                   
11:09:46 AM                                                                                                                   
Co-Chair  Johnston  clarified   that  the  unlimited  receipt                                                                   
authority was  in the mental  health trust budget.  She asked                                                                   
for verification  that it had  passed prior to  the enactment                                                                   
of the CARES Act. Ms. Pitney responded in the affirmative.                                                                      
Representative   Tilton  referenced   the  federal   stimulus                                                                   
dollars being  distributed to  individuals and families.  She                                                                   
learned that  about 40,000 Alaskans  would not  qualify based                                                                   
on 2018  and 2019 tax returns.  She asked for an  update. Ms.                                                                   
Pitney was unable to answer the question.                                                                                       
Co-Chair  Johnston  interjected  that  anyone with  a  direct                                                                   
deposit  from  the federal  government  would  receive  their                                                                   
checks such as  social security recipients that  did not file                                                                   
a tax  return. She acknowledged  that checks would  be issued                                                                   
later in the year  and it may take time to  identify eligible                                                                   
individuals who  were not on  direct deposit. She  noted that                                                                   
for  those  lacking   a  direct  deposit  with   the  federal                                                                   
government  the   Department  of  Treasury  had   put  up  an                                                                   
application link for the stimulus checks.                                                                                       
11:12:28 AM                                                                                                                   
Representative  Tilton  mentioned  the  unemployment  program                                                                   
for  individuals operating  as  independent contractors,  gig                                                                   
workers, or  other self-employed  individuals. She  asked for                                                                   
more information.  Ms. Pitney answered that once  the federal                                                                   
and  state systems  were in  place to  assist those  workers,                                                                   
anyone who had  applied would be in line for  assistance when                                                                   
operational.  Representative  Tilton  disclosed  that  anyone                                                                   
who had applied  prior to the expanded  unemployment benefits                                                                   
had  been   kicked out   of  the  system. She  asked  whether                                                                   
anyone  currently   applying  before  the   expanded  benefit                                                                   
system was in  place would remain in the systems   queue. Ms.                                                                   
Pitney  replied  in the  affirmative.  She  recommended  that                                                                   
individuals  seeking  benefits  should request  clarity  from                                                                   
DOL. Representative  Tilton asked  about items like  assisted                                                                   
living  and congregate  meals connected  to federal  programs                                                                   
listed on slide  6. She asked if the funds  would go directly                                                                   
to organizations  or through the state. Ms.  Pitney responded                                                                   
that Representative  Tilton was  referring to grant  programs                                                                   
from federal  agencies. She indicated  that unless  the grant                                                                   
program   was   a  consolidated   statewide   request,   each                                                                   
individual  operator  had  to apply.  The  definitive  answer                                                                   
would  be  based  on  provisions  sent  out  by  the  federal                                                                   
agency.  Representative Tilton  surmised  it would  be up  to                                                                   
individual providers  to check on  what they could  apply and                                                                   
qualify for.                                                                                                                    
11:15:54 AM                                                                                                                   
Representative  Wool  referenced the  municipal  distribution                                                                   
for communities  over 500,000  in population.  He noted  that                                                                   
Alaska lacked a  municipality of that size.  He asked whether                                                                   
there  was any  obligation to  disperse  funds to  localities                                                                   
under  500,000  in  population.  Ms.  Pitney  responded  that                                                                   
there was an  expectation based on the provisions  of the act                                                                   
that  the   state  would   manage  disbursement   to  smaller                                                                   
communities. The  federal government  did not want  to manage                                                                   
smaller  chunks of  money and  left it as  an expectation  of                                                                   
the state  to manage the  funding. She was uncertain  exactly                                                                   
how   funding  would   have  been   calculated  per   500,000                                                                   
population centers.  The 45 percent calculation  was based on                                                                   
the  macroeconomics  of state  versus local government.   She                                                                   
ascertained  that  an   expectation and  not  necessarily  an                                                                   
obligation existed to distribute the funds.                                                                                     
11:18:36 AM                                                                                                                   
Representative  Wool  surmised  that the  federal  government                                                                   
assumed  that a  municipal  government  serving a  population                                                                   
over 500,000  had the infrastructure  and ability  to utilize                                                                   
the  funding  versus  smaller municipalities,  where  it  was                                                                   
left  to the  state  to distribute  the  funding. Ms.  Pitney                                                                   
replied  that  ultimately,  the federal  government  did  not                                                                   
want to manage  distributing funds at a smaller  level due to                                                                   
overhead costs.                                                                                                                 
Representative  Josephson  referenced  the COVID  19  testing                                                                   
covered by the  CARES Act at the bottom of slide  3. He asked                                                                   
if  it  could  be  used  for  fishing  industry  workers  and                                                                   
processing personnel.  Ms. Pitney  answered that  the testing                                                                   
required an insurance  provider of a plan like  AlaskaCare to                                                                   
cover  the COVID-19  testing.  She determined  that a  better                                                                   
provision would be  to set up a testing system  in the health                                                                   
mitigation  and response  area that allowed  for the  ability                                                                   
to test fishermen.                                                                                                              
11:21:40 AM                                                                                                                   
MEGAN WALLACE,  DIRECTOR, LEGISLATIVE LEGAL  SERVICES, ALASKA                                                                   
STATE  LEGISLATURE (via  teleconference),  focused mainly  on                                                                   
the  legal issues  surrounding  the allocation  of CARES  Act                                                                   
funding.   She    highlighted   that   her    comments   were                                                                   
preliminary.  The   specific  proposals  and   appropriations                                                                   
would need  to be analyzed by  the source and purpose  of the                                                                   
funds.  She spoke  from  the   big picture   perspective  and                                                                   
related  that the  CARES  Act funds  were  federal funds  and                                                                   
came with restrictions  attached in terms of  what they could                                                                   
be  used on.  She focused  on  the last  group  of CARES  Act                                                                   
dollars  specifically,  the  $1.25  billion  to  be  received                                                                   
shortly by the  state. She detailed that section  5001 of the                                                                   
CARES Act detailed  the restrictions on use of  the funds and                                                                   
were for the  purpose of covering qualified  COVID 19 related                                                                   
expenses. The  guidance from the  United States  Treasury was                                                                   
limited  and  made  specific  analysis  on  how  to  use  the                                                                   
funding more  broadly  tricky.   She added that  Section 5001                                                                   
contained oversight  authority and an audit function  to make                                                                   
sure  the  funds   received  by  the  state   were  spent  in                                                                   
compliance  with the use  of funds  provision - meaning  they                                                                   
were necessary for  the COVID-19 emergency. The  state may be                                                                   
responsible  to repay the  funds if  it was later  determined                                                                   
that the state did not use the funds for that purpose.                                                                          
11:25:11 AM                                                                                                                   
Ms.  Wallace continued  that  Article 9,  Section  13 of  the                                                                   
Alaska   Constitution   stipulated   that   the   money   was                                                                   
prohibited  from  being  withdrawn from  the  state  treasury                                                                   
without an  appropriation. She  opined that there  were three                                                                   
main  options for  the expenditure  of the  CARES Act  funds.                                                                   
She relayed  that the  first option  was for the  legislature                                                                   
to  reconvene and  specifically  appropriate  the funds  from                                                                   
the  CARES  Act.  The  second   option,  lacking  legislative                                                                   
appropriation,   required   that  the   administration   find                                                                   
existing  appropriation  provisions   and  find  either  open                                                                   
ended receipt authority  or other receipt authority  to allow                                                                   
the expenditure  of the funds.  The third option was  the RPL                                                                   
process.  The  governor  would  utilize the  RPL  process  to                                                                   
increase  other federal  appropriations in  the budget  where                                                                   
the legislature  had not previously appropriated  the federal                                                                   
receipts.   She  voiced   that   the  legislature   had   not                                                                   
appropriated  any  of  the  CARES   Act  funds.  She  defined                                                                   
potential  existing  appropriations  that could  possibly  be                                                                   
used to expend  the CARES Act funding. One  of the provisions                                                                   
had  been mentioned  by  Ms. Pitney  and  was  an open  ended                                                                   
appropriation  for federal  receipt authority  in the  Mental                                                                   
Health  budget for  supplemental  COVID  19 emergency  relief                                                                   
received during FY  20 (July 1, 2019 through  June 30, 2020).                                                                   
The  authority would  capture  the moment  in  time when  the                                                                   
$1.25   billion  was   anticipated  to   be  deposited.   The                                                                   
provision   granted   federal   receipt  authority   to   the                                                                   
Department  of Health  and Social  Services (DHSS),  Division                                                                   
of  Public   Health,  for  emergency  programs   specifically                                                                   
responding  to  and  mitigating  the  risk  of  the  COVID-19                                                                   
outbreak.  She  relayed  that   another  area  for  potential                                                                   
expenditure  was  the  Disaster Relief  Fund.  She  qualified                                                                   
that she  was unsure  the money would  be deposited  into the                                                                   
fund. The  governor and president  had declared the  COVID 19                                                                   
pandemic  a  public  health  disaster   and  the  legislature                                                                   
extended the governors   declaration of disaster  to November                                                                   
15,  2020. The  governor  would only  have  the authority  to                                                                   
spend  a cumulative  total of  $10 million  of the assets  of                                                                   
the Disaster  Relief Fund.  The limit  was established  in SB
11:29:50 AM                                                                                                                   
Ms.  Wallace  concurred  with  Ms.  Pitney's  statement  that                                                                   
while  the  legislature  provided   broad  authority  to  the                                                                   
administration  to  respond to  the  pandemic  from a  public                                                                   
health   standpoint,   authority    to   expend   CARES   Act                                                                   
appropriations for  economic relief was lacking,  absent some                                                                   
other  action   by  the  legislature  that   legally  allowed                                                                   
expenditure of the  funds according to federal  guidelines or                                                                   
through the RPL  process. She explained that  the RPL process                                                                   
was  described in  the  Executive  Budget Act,  AS  37.07.080                                                                   
(h). The  provision, typically  used in the interim,  allowed                                                                   
the governor  to submit a  request to the Legislative  Budget                                                                   
and Audit Committee  (LBA) to increase an  appropriation item                                                                   
based  on  the  receipt of  additional  program  receipts  or                                                                   
federal  funding not  specifically appropriated  by the  full                                                                   
legislature.  She noted  that  although it  was not  interim,                                                                   
the  legislature  had passed  the  budgets for  the  upcoming                                                                   
fiscal year  and it may be  a process that could  be utilized                                                                   
under  the  circumstances  given  the  legislature's  current                                                                   
indefinite recess.                                                                                                              
11:32:22 AM                                                                                                                   
Ms.  Wallace  continued  to  explain  the  RPL  process.  She                                                                   
reported that  the legislature included specific  language in                                                                   
the operating  budget that allowed  for the RPL  approval and                                                                   
appropriation  process.  She   read  from  the  appropriation                                                                   
language as follows:                                                                                                            
     (The  federal   receipts)  that  exceed   those  amounts                                                                   
     appropriated  by this Act  are appropriated  conditioned                                                                   
     on compliance  with the program review provisions  of AS                                                                   
Ms.  Wallace explained  that if  the administration  complied                                                                   
with  the  program  review  provisions,   the  appropriations                                                                   
could  be   increased.   She  offered   that  it  was   often                                                                   
questioned  whether   LBA  could   approve  the   request  to                                                                   
increase  the appropriation,  or  if  LBA could  decline  the                                                                   
appropriation.  She  elucidated  that statute  dictated  that                                                                   
once the  governor submitted an  RPL to the committee  he had                                                                   
to  wait  45 days  to  use  the funds.  The  committee  could                                                                   
reject the  request, which required  the governor  to provide                                                                   
a  written justification  to move  forward  with the  request                                                                   
regardless   of   LBAs    denial.   She   communicated   that                                                                   
ultimately,  the governor  had  the authority  to expend  the                                                                   
funds without  LBA approval  of the  RPL request.  Typically,                                                                   
the legislature  already appropriated  the money and  the RPL                                                                   
process  was   used  to   increase  the  appropriation.   She                                                                   
emphasized that it  was not an appropriation  itself, the RPL                                                                   
was  merely a  mechanism to  increase the  amount of  federal                                                                   
funds   that   had   already   been   appropriated   by   the                                                                   
legislature.  With  respect  to  the  CARES  Act  funds,  Ms.                                                                   
Wallaces  opinion  was that  the strictest interpretation  of                                                                   
AS  37.07.080(h) and  the language  in  the operating  budget                                                                   
that supplemented  the provision allowed for  money in excess                                                                   
of   the  federal   receipts  already   appropriated   to  be                                                                   
increased   via   the   RPL    process.   Specifically,   the                                                                   
legislature  had   not  appropriated  any  CARES   Act  funds                                                                   
therefore,  one  could  advance  an  argument  that  the  RPL                                                                   
process  was not  appropriate for  the CARES  Act funding.  A                                                                   
less restrictive  interpretation could allow the  RPL process                                                                   
to increase the  authority for specific federal  receipts the                                                                   
legislature had  appropriated. She  declared that it  was her                                                                   
opinion  the RPL process  could  not be used  to increase  an                                                                   
appropriation where  the legislature did not  appropriate any                                                                   
federal funds.                                                                                                                  
11:37:15 AM                                                                                                                   
Co-Chair Johnston  provided a real life situation.  She noted                                                                   
that  the legislature  intended  to  distribute  some of  the                                                                   
CARES Act  funding to  local governments  through the  state.                                                                   
She  referenced the  community revenue  sharing statute.  She                                                                   
indicated that one-third  of the fund was expended  through a                                                                   
formula. She asked  if putting CARES Act money  into the fund                                                                   
was a  gray area in  the RPL process  or whether it  could be                                                                   
done.  Ms. Wallace  replied that  in  her opinion,  utilizing                                                                   
the  RPL  process  for  community  assistance  would  not  be                                                                   
appropriate  because  the  appropriation  had  only  included                                                                   
state  funds. To  the  extent that  the  governor vetoed  the                                                                   
entire     community    assistance     appropriation,     the                                                                   
appropriation  could  not  be  increased because  it  was  no                                                                   
longer in the  operating budget. The legislature  could enact                                                                   
a  new  appropriation  that  would   use  CARES  Act  federal                                                                   
receipts for  distribution to  communities rather  than state                                                                   
funds.  The  appropriation  would differ  from  the  specific                                                                   
revenue  sharing  statutory  program,   but  the  legislature                                                                   
could use the program as guidance.                                                                                              
11:41:19 AM                                                                                                                   
Co-Chair Johnston  referenced a housing program  in the CARES                                                                   
Act outside  of the  $1.25 billion  appropriation. She  asked                                                                   
whether the Alaska  Housing Finance Corporation  (AHFC) could                                                                   
act independently  or if the  legislature needed  to consider                                                                   
it.  Ms. Wallace  replied that  Ms. Pitney  had spoken  about                                                                   
some  HUD funds  that may  be  available. She  would have  to                                                                   
follow  up. She  did not  know specific  details about  funds                                                                   
used for AHFC. She suggested that Ms. Pitney follow up.                                                                         
Ms. Pitney answered  that AHFC had several  appropriations in                                                                   
different  programs. The  entity could  act independently  if                                                                   
it  had  federal  receipt authority  that  exceeded  what  it                                                                   
normally received.  She exemplified that if AHFC  had federal                                                                   
receipt authority  of $10  million and  had only received  $5                                                                   
million, it could  likely expend CARES Act  funding. However,                                                                   
if the funding  exceeded the corporations   federal authority                                                                   
it  was more  likely  the  RPL  process was  appropriate.  An                                                                   
examination of  the emergency  funding and the  federal funds                                                                   
the agency  had received was  necessary. However,  she deemed                                                                   
that AHFC receipt  authority was a more appropriate  use than                                                                   
an RPL associated with the community assistance program.                                                                        
11:43:58 AM                                                                                                                   
Representative  Josephson  referenced  the  RPL  process  and                                                                   
reiterated his  understanding of  the process as  Ms. Wallace                                                                   
had  explained it  and  asked whether  he  was accurate.  Ms.                                                                   
Wallace  replied that  his statement  was generally  correct.                                                                   
She noted  that the RPL process  could not be used  for money                                                                   
that had  not been  appropriated. She  noted that  Ms. Pitney                                                                   
provided  the  summary  document   that  included  CARES  Act                                                                   
funding  that  might  be available.  She  deduced  that  many                                                                   
categories  of the  federal funds  like education,  Medicaid,                                                                   
and  UI  were   areas  where  the  RPL  process   was  likely                                                                   
appropriate;  however, it  was not  an appropriate  mechanism                                                                   
for  expending  funds unrelated  to  existing  appropriations                                                                   
that already had federal receipt authority.                                                                                     
11:46:22 AM                                                                                                                   
Representative  Josephson spoke  about the  vetoes made  nine                                                                   
days  earlier  by  the  governor. He  asked  if  because  the                                                                   
legislature  passed  the  operating budget  after  March  27,                                                                   
2020,  the CARES  Act  funding was  predicated  on the  prior                                                                   
years  budget  and the current  years  mental  health budget.                                                                   
Ms.  Wallace responded  that Section  5001 of  the CARES  Act                                                                   
only  applied to  the  $1.25 billion  lump  sum payment,  the                                                                   
requirements for  use of the  funds in subsection  (d) listed                                                                   
three categories of restriction [only 2 were noted]:                                                                            
     • Restricted use for costs incurred related to COVID-19                                                                  
     • The costs were not accounted for in the budget most                                                                    
       recently passed.                                                                                                         
Ms. Wallace  delineated  that the answer  was confusing,  and                                                                   
it  was easy  to  get  lost  in  discussions regarding  which                                                                   
budget  the   CARES  Act   applied  to.  The   appropriations                                                                   
recently  vetoed  by  the  governor   were  relevant  because                                                                   
subsection  3 of  the CARES  Act allowed  for costs  incurred                                                                   
from  March  1,  2020  through   December  2020.  The  period                                                                   
covered  two different  fiscal  years; the  FY 20  and FY  21                                                                   
budgets. Specific  to the RPL process, COVID  19 expenditures                                                                   
in FY  20 were determined on  the FY 20 budget.  Expenditures                                                                   
for  FY 21,  after July  31, 2020  were  based on  the FY  21                                                                   
budget.  Representative  Josephson  noted her  statement  was                                                                   
helpful and  he supported  the governor  using the  CARES Act                                                                   
funds to supplant his vetoes.                                                                                                   
11:49:50 AM                                                                                                                   
Vice-Chair Ortiz  referenced the three main  options provided                                                                   
by  Ms. Wallace  to  appropriate the  CARES  Act funding.  He                                                                   
asked if it was  safe to say the cleanest  and most efficient                                                                   
way  would   be  for   the  legislature   to  reconvene   and                                                                   
appropriate  the funds.  Ms. Wallace  replied that  it was  a                                                                   
policy  call for  the  legislature.  She offered  that  risks                                                                   
were involved  and noted that  there were many  unknowns. The                                                                   
state  would  receive  a  minimum   $1.25  billion  from  the                                                                   
federal  government. She  announced that  the simplest  thing                                                                   
would be for  the legislature to convene and  appropriate the                                                                   
funds to eliminate any speculation and confusion.                                                                               
11:51:55 AM                                                                                                                   
Representative   Sullivan-Leonard   asked   about   the   RPL                                                                   
process. She saw  that the process had been used  in the past                                                                   
for  emergency funding,  Medicaid,  and  the National  Guard.                                                                   
She  referenced   a  response  by  Ms.  Wallace   to  Senator                                                                   
Wielechowski  regarding limitations  of the  RPL process  for                                                                   
CARES Act  expenditures concerning  other  program receipts.                                                                    
She inquired whether  Power Cost Equalization  (PCE) could be                                                                   
considered program  receipts and  used to disperse  funds for                                                                   
community  revenue sharing and  if it  was applicable  to the                                                                   
RPL  process.  Ms.  Wallace answered  in  the  negative.  She                                                                   
explained  that additional  program receipts  applied  when a                                                                   
program  received more  revenue  than had  been  anticipated.                                                                   
She detailed that  the RPL process could be  used to increase                                                                   
program receipts.  She detailed that  PCE funds were  part of                                                                   
a state  fund and were not  program receipts.  Utilization of                                                                   
PCE   funds    were   specifically   appropriated    by   the                                                                   
legislature.  The RPL process  could not  be used  to request                                                                   
to   expend  additional   funds   out   of  a   state   fund.                                                                   
Representative Sullivan-Leonard  hoped that funding  could be                                                                   
dispersed by  the state to the  local governments as  soon as                                                                   
possible. She acknowledged  that people in her  district were                                                                   
really hurting. She  did not want to hold up  the process and                                                                   
wanted the funds dispersed quickly and effectively.                                                                             
11:55:26 AM                                                                                                                   
Co-Chair  Johnston echoed  Representative  Sullivan-Leonard's                                                                   
comments. She wanted  to work expediently, together  with the                                                                   
administration  to  distribute  the funds  in  a   thoughtful                                                                   
manner.  She  offered to reach  out to the administration  to                                                                   
ensure  the funds  were distributed  to Alaskans  as soon  as                                                                   
Co-Chair Foster  relayed that  the point  of the meeting  was                                                                   
to gain information and use it for a plan going forward.                                                                        
11:57:00 AM                                                                                                                   
The meeting was adjourned at 11:56 a.m.                                                                                         

Document Name Date/Time Subjects
HFC Presentation CARES Act 4-15-20.pdf HFIN 4/15/2020 10:00:00 AM
HFIN CARES Act Presentation
LFD CARES Act Summary 3-7-20.pdf HFIN 4/15/2020 10:00:00 AM