Legislature(2021 - 2022)ADAMS 519

03/15/2022 01:30 PM House FINANCE

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* first hearing in first committee of referral
+ teleconferenced
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Heard & Held
-- Public Testimony --
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved CSHB 158(FIN) Out of Committee
                  HOUSE FINANCE COMMITTEE                                                                                       
                      March 15, 2022                                                                                            
                         1:31 p.m.                                                                                              
1:31:05 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Merrick called the  House Finance Committee meeting                                                                    
to order at 1:31 p.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Kelly Merrick, Co-Chair                                                                                          
Representative Dan Ortiz, Vice-Chair                                                                                            
Representative Ben Carpenter                                                                                                    
Representative Bryce Edgmon                                                                                                     
Representative DeLena Johnson                                                                                                   
Representative Andy Josephson                                                                                                   
Representative Bart LeBon                                                                                                       
Representative Sara Rasmussen                                                                                                   
Representative Steve Thompson (via teleconference)                                                                              
Representative Adam Wool                                                                                                        
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
Kerry Crocker,  Staff, Speaker Louise Stutes;  David Ignell,                                                                    
Self,  Juneau;  Representative   Mike  Prax;  Emily  Nauman,                                                                    
Deputy  Director, Legislative  Legal Services,  Alaska State                                                                    
PRESENT VIA TELECONFERENCE                                                                                                    
Corey Bigelow,  Operations Manager, Permanent  Fund Dividend                                                                    
Division,  Department  of   Revenue;  Pat  Alexander,  Self,                                                                    
Sitka; Frank  Lee, Self, Douglas; Wanda  Culp, Self, Juneau;                                                                    
Shannon  Adamson,  Alaska Regional  Representative,  Masters                                                                    
Mates  and   Pilots,  Juneau;  Gerry   Hope,  Transportation                                                                    
Director, Sitka Tribe of Alaska, Sitka.                                                                                         
HB 158    PFD CONTRIBUTIONS TO GENERAL FUND                                                                                     
          CSHB 158(FIN)  was REPORTED out of  committee with                                                                    
          five "do  pass" recommendations  and with  six "no                                                                    
          recommendation"   recommendations  and   with  one                                                                    
          previously  published  indeterminate fiscal  note:                                                                    
          FN1 (REV).                                                                                                            
HB 322    AK MARINE HWY SYSTEM VESSEL REPL. FUND                                                                                
          HB 322 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
HB 395    FUNDS: AK MARINE HWY SYSTEM                                                                                           
          HB 395 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
Co-Chair Merrick reviewed the agenda for the day.                                                                               
HOUSE BILL NO. 322                                                                                                            
     "An Act relating to the Alaska marine highway system                                                                       
     vessel replacement fund; and providing for an                                                                              
     effective date."                                                                                                           
1:31:50 PM                                                                                                                    
KERRY  CROCKER,  STAFF,  SPEAKER LOUISE  STUTES,  introduced                                                                    
himself and had no opening comments.                                                                                            
1:32:20 PM                                                                                                                    
Vice-Chair  Ortiz   asked  Mr.  Crocker  to   summarize  the                                                                    
difference between HB 322 and HB 395.                                                                                           
Mr. Crocker reported that the  main difference was who would                                                                    
be permitted  to spend the  money once it  was appropriated.                                                                    
He  explained that  under HB  322, the  legislature retained                                                                    
the authority  to appropriate the  money. Under HB  395, the                                                                    
legislature  still  had  the authority  to  appropriate  the                                                                    
money,   but  the   commissioner   of   the  Department   of                                                                    
Transportation and Public  Facilities (DOT) retained control                                                                    
of the money after it had been appropriated.                                                                                    
1:33:04 PM                                                                                                                    
Co-Chair Merrick OPENED public testimony                                                                                        
1:33:14 PM                                                                                                                    
DAVID IGNELL,  SELF, JUNEAU, was  unsure of the bill  he was                                                                    
testifying on.  He wanted to  testify to the bill  that gave                                                                    
the    DOT   commissioner    the   right    to   appropriate                                                                    
transportation funds.                                                                                                           
Co-Chair Merrick would  have Mr. Ignell testify  on the next                                                                    
bill on the agenda, HB 395.                                                                                                     
1:34:37 PM                                                                                                                    
Co-Chair Merrick CLOSED public testimony                                                                                        
Co-Chair   Merrick   indicated   amendments  were   due   by                                                                    
Wednesday, March 16, 2022 by 5:00 p.m.                                                                                          
HB  322  was  HEARD  and   HELD  in  committee  for  further                                                                    
1:35:00 PM                                                                                                                    
AT EASE                                                                                                                         
1:36:13 PM                                                                                                                    
Co-Chair  Merrick  indicated  the committee  would  take  up                                                                    
HB 158. She invited the sponsor of the bill to testify.                                                                         
HOUSE BILL NO. 158                                                                                                            
     "An Act relating to contributions from permanent fund                                                                      
     dividends to the general fund."                                                                                            
1:36:42 PM                                                                                                                    
REPRESENTATIVE  MIKE PRAX  introduced HB  158 and  explained                                                                    
that  it  instructed  the   Permanent  Fund  Dividend  (PFD)                                                                    
Division of  the Department  of Revenue  (DOR) to  include a                                                                    
check box  on the electronic PFD  application. The intention                                                                    
of the box was to make  it easier for individuals who wished                                                                    
to  return their  PFD check  to the  general fund.  He added                                                                    
that the check box worked the  same as the check box for the                                                                    
Pick.Click.Give. program.                                                                                                       
1:37:37 PM                                                                                                                    
Representative  Rasmussen appreciated  the legislation.  She                                                                    
had  mentioned the  idea in  the prior  legislature and  was                                                                    
excited to see Alaskans participate in the program.                                                                             
Vice-Chair  Ortiz asked  the Representative  Prax if  he had                                                                    
detected  any  opposition  from  others  who  had  benefited                                                                    
through the Pick.Click.Give. option.                                                                                            
Representative Prax  responded that  he had heard  rumors of                                                                    
opposition but had received no formal opposition.                                                                               
1:39:00 PM                                                                                                                    
Representative Wool  wondered if people making  the donation                                                                    
would still have to pay taxes on the funding.                                                                                   
Representative Prax  responded that  there was no  change in                                                                    
the tax status even if it  was donated back to the state. It                                                                    
would be  considered a  charitable contribution.  He relayed                                                                    
that    Legislative   Legal    Services   determined    that                                                                    
contributing a PFD  check back to the state  was handled the                                                                    
same as a charitable contribution.                                                                                              
Representative    Wool    wondered   about    the    funding                                                                    
ramifications of  the donations for the  agencies that would                                                                    
receive them.                                                                                                                   
Representative  Prax reiterated  that  the  PFD check  would                                                                    
return  to the  general  fund  if a  person  opted into  the                                                                    
program.  There  was  no  instruction  to  send  funding  to                                                                    
specific agencies.  The money would  go back to  the general                                                                    
fund and the legislature would appropriate it as normal.                                                                        
1:42:00 PM                                                                                                                    
Representative  Thompson MOVED  to  ADOPT  Amendment 1,  32-                                                                    
LS0746\A.4, Nauman, 3/1/22 (copy on file):                                                                                      
     Page 1, line 1 :                                                                                                           
          Delete the second occurrence of "fund"                                                                                
          Insert "and permanent funds"                                                                                          
     Page 1, line 4:                                                                                                            
          Delete "fund"                                                                                                         
          Insert "and permanent funds"                                                                                          
     Page 1, line 7, following the first and second                                                                             
     occurrences of "fund":                                                                                                     
          Insert "or the principal of the permanent fund"                                                                       
     Page 1, line 14, following "fund":                                                                                         
          Insert "or the principal of the permanent fund"                                                                       
Co-Chair Merrick OBJECTED for discussion.                                                                                       
Representative   Thompson   reviewed  the   amendment.   The                                                                    
amendment  provided an  additional option  for donating  the                                                                    
money to  the corpus of  the permanent fund rather  than the                                                                    
general fund.                                                                                                                   
1:43:22 PM                                                                                                                    
Vice-Chair  Ortiz thought  the amendment  was favorable.  He                                                                    
asked if the amendment would require additional personnel.                                                                      
Representative Thompson  noted that  there would have  to be                                                                    
some technology changes, but it would not add costs.                                                                            
1:44:10 PM                                                                                                                    
Representative Carpenter  asked if  there was a  process for                                                                    
accepting funds into the corpus.                                                                                                
1:44:53 PM                                                                                                                    
COREY BIGELOW,  OPERATIONS MANAGER, PERMANENT  FUND DIVIDEND                                                                    
DIVISION, DEPARTMENT OF  REVENUE (via teleconference), asked                                                                    
Representative Carpenter to restate his question.                                                                               
Representative  Carpenter rephrased  and  asked whether  the                                                                    
division had a way to  regularly receive returned PFD checks                                                                    
and  incorporate the  monies  back into  the  corpus of  the                                                                    
fund. He  asked if this  could be achieved  as is or  if the                                                                    
system needed a technical upgrade.                                                                                              
Mr. Bigelow  replied that he  could not answer  the question                                                                    
for the  PFD corporation, but  that the PFD  division needed                                                                    
to do some  additional work in order to send  those funds to                                                                    
the Alaska Permanent Fund Corporation (APFC).                                                                                   
Representative Carpenter  asked if  there was  anything that                                                                    
would prevent the corporation from  being able to accept the                                                                    
Mr. Bigelow  thought that there  was nothing  preventing the                                                                    
corporation  from  setting  up  a mechanism  to  accept  the                                                                    
1:47:02 PM                                                                                                                    
Representative Prax  relayed there would not  be any written                                                                    
checks and that the process would be done electronically.                                                                       
Representative Wool noted that  the possibility of receiving                                                                    
a  tax   deduction  for  a  charitable   donation  had  been                                                                    
mentioned earlier. He thought  some sort of donation receipt                                                                    
would be required.                                                                                                              
Representative  Prax  expected  that the  program  would  be                                                                    
designed to  trigger a donation  receipt when a  person made                                                                    
the decision  to donate. The  division would send  a receipt                                                                    
for a contribution, and it  would be mechanically simple. He                                                                    
was unsure whether  the division was authorized  to accept a                                                                    
personal  check.  He  thought  that  currently,  anyone  was                                                                    
permitted to write  a check to the general fund  and did not                                                                    
think anything would change.                                                                                                    
1:49:42 PM                                                                                                                    
Representative  Carpenter asked  if Representative  Wool was                                                                    
suggesting that  the check going  to the state  general fund                                                                    
or permanent fund  would be considered a tax  deduction as a                                                                    
qualified charitable donation.                                                                                                  
Representative Prax agreed that that was his understanding.                                                                     
Co-Chair  Merrick asked  Mr. Bigelow  to comment  on whether                                                                    
the  division  was able  to  provide  documentation for  the                                                                    
donation of a  person's PFD to the corpus or  to the general                                                                    
Mr.  Bigelow believed  the division  would have  to come  up                                                                    
with a  procedure since it  was not something that  was done                                                                    
regularly. He did not foresee that being a problem.                                                                             
Co-Chair  Merrick asked  whether  an organization  currently                                                                    
had  to  provide a  receipt  if  a  person made  a  donation                                                                    
through the Pick.Click.Give. program.                                                                                           
Mr.  Bigelow believed  that there  was something  in statute                                                                    
that   required  that   the   PFD   division  provide   that                                                                    
information. He  noted that he  had to check the  statute to                                                                    
confirm.   Applicants   were    provided   with   additional                                                                    
information on 1099 tax forms as well.                                                                                          
Co-Chair Merrick  noted that she  was trying to  get someone                                                                    
from Legislative Legal Services online.                                                                                         
Representative  Johnson provided  a  personal  example of  a                                                                    
misunderstanding regarding  her PFD check. She  was required                                                                    
to  provide additional  documentation to  the division,  and                                                                    
the division  provided documentation back to  her. The state                                                                    
already was  making other  deposits into  the corpus  of the                                                                    
permanent   fund.  She   opined   that  it   did  not   seem                                                                    
1:53:08 PM                                                                                                                    
AT EASE                                                                                                                         
1:58:03 PM                                                                                                                    
Co-Chair   Merrick   indicated   that  Emily   Nauman   with                                                                    
Legislative Legal Service was online for questions.                                                                             
1:58:15 PM                                                                                                                    
Representative Rasmussen asked Ms.  Nauman to comment on the                                                                    
bill  regarding  donating to  the  corpus  of the  permanent                                                                    
fund. She wondered  whether it was classified  as a donation                                                                    
to  a  government  entity considering  the  money  would  be                                                                    
reinvested and  redistributed as a dividend  rather than for                                                                    
the purpose of the government.                                                                                                  
EMILY NAUMAN,  DEPUTY DIRECTOR, LEGISLATIVE  LEGAL SERVICES,                                                                    
ALASKA STATE  LEGISLATURE, believed that a  donation made by                                                                    
an individual would be taxed the  same as a donation back to                                                                    
the  general fund.  It would  be taxable  but also  would be                                                                    
deductible  if   an  individual   chose  to   itemize  their                                                                    
1:59:31 PM                                                                                                                    
Representative Rasmussen  asked if Alaskans would  know that                                                                    
the donation was considered deductible.                                                                                         
Ms.  Nauman felt  comfortable with  her assessment  that the                                                                    
tax would be the same.                                                                                                          
Co-Chair  Merrick   asked  if   the  State  of   Alaska  was                                                                    
considered a non-profit organization.                                                                                           
Ms. Nauman indicated that  government entities were slightly                                                                    
different than non-profit  organizations with tax-deductible                                                                    
donations.  For the  purposes of  federal  revenue taxes,  a                                                                    
donation to  the state government  would be considered  as a                                                                    
donation to a different type of entity.                                                                                         
Co-Chair Merrick  asked for  confirmation that  the donation                                                                    
would still be considered tax deductible.                                                                                       
Ms.  Nauman   clarified  that  a   donation  to   the  state                                                                    
government would still be considered tax deductible.                                                                            
Representative  Josephson asked  if there  was something  in                                                                    
the [federal Tax Cuts and  Jobs Act] congressional action of                                                                    
2019   that  made   tax  deductions   to  non-profits   less                                                                    
advantageous to donors.                                                                                                         
Ms. Nauman  responded that there  were many changes  made in                                                                    
the Tax Cuts and Jobs Act  that changed the structure of the                                                                    
process  of filing  individual income  taxes. She  explained                                                                    
that fewer  people were itemizing their  standard deductions                                                                    
in their taxes under this act.                                                                                                  
Representative Wool  shared his  understanding that  the tax                                                                    
law  prevented the  deduction of  state  taxes from  federal                                                                    
taxes. He wondered whether  state taxes being non-deductible                                                                    
meant giving money  back to the general  fund. He questioned                                                                    
how it was different than  a charitable contribution, and if                                                                    
a state income tax would be considered tax deductible.                                                                          
Ms.  Nauman indicated  that under  the  current federal  tax                                                                    
laws, a  donation to the  general fund or permanent  fund as                                                                    
proposed  in Amendment  1 would  be deductible.  If a  state                                                                    
were to  implement an income  tax, it would depend  on state                                                                    
laws to  determine whether  similar donation  activity would                                                                    
be deductible.                                                                                                                  
Representative Wool pondered if a  person lived in Alaska or                                                                    
any  state  with   a  state  [income]  tax,   was  it  still                                                                    
deductible from an individual's federal taxes.                                                                                  
Ms.  Nauman indicated  it was  her understanding  that state                                                                    
and local  taxes were  deductible and  itemized in  the same                                                                    
way  as donations.  If a  person were  to take  the standard                                                                    
deductions,  their  state  taxes  might  not  be  separately                                                                    
deductible from  federal taxes.  She prefaced  that everyone                                                                    
filed  their individual  income taxes  differently, and  the                                                                    
decision to itemize or not  itemize certain expenditures was                                                                    
at the discretion of the individual.                                                                                            
Co-Chair Merrick reminded the  committee that Ms. Nauman was                                                                    
not an accountant or tax preparer, but an attorney.                                                                             
Co-Chair  Merrick WITHDREW  her  OBJECTION  to Amendment  1.                                                                    
There being NO further OBJECTION, Amendment 1 was ADOPTED.                                                                      
2:04:52 PM                                                                                                                    
Representative Wool  commented that  he was  conflicted with                                                                    
the bill.  The bill  enabled Alaskans  to donate  their PFDs                                                                    
back to the state. He  wondered how many people would choose                                                                    
to give  the money back to  the state. He assumed  that most                                                                    
people who went through the  trouble of applying for the PFD                                                                    
would keep  the check. He thought  the idea of the  bill was                                                                    
good but  that it was  used in an  argument that he  did not                                                                    
Co-Chair Merrick noted that the  bill allowed people to make                                                                    
donations in $25 increments.                                                                                                    
Representative  Rasmussen appreciated  the  bill because  it                                                                    
gave  people more  choices.  She appreciated  Representative                                                                    
Thompson's amendment. She would be supporting the bill.                                                                         
2:08:30 PM                                                                                                                    
Representative  Edgmon   commented  that  the   concept  was                                                                    
interesting.  He noted  it was  unlikely  that people  would                                                                    
donate back to the government. He hoped he was wrong.                                                                           
Representative Prax  stated that he could  not estimate what                                                                    
people's  response  would  be.  He noted  that  people  were                                                                    
applying for  the dividend during  the same time  period the                                                                    
legislature  was deliberating  the budget,  and that  people                                                                    
based their  donation decisions off those  deliberations. He                                                                    
thought part  of the problem  was that the state  was losing                                                                    
revenue.  He expected  that quite  a few  more people  would                                                                    
donate back to the state.                                                                                                       
Co-Chair  Merrick thought  that  with  20 co-sponsors  there                                                                    
might be 20 more donations.                                                                                                     
Representative Edgmon thought the  bill would be de minimis.                                                                    
However,  if  it  gave  Alaskans  purpose  and  had  minimal                                                                    
associated costs, he would support the bill.                                                                                    
Co-Chair Merrick  indicated the cost  to the bill  was about                                                                    
$43,600 to implement the proposed changes.                                                                                      
Representative  Josephson stated  that the  fiscal note  was                                                                    
concerning. He thought that the  bill was benign and did not                                                                    
solve  any  of  the  state's fiscal  problems.  He  did  not                                                                    
understand why someone would make  a donation to the general                                                                    
fund when Pick.Click.Give.  allowed for specified donations.                                                                    
He remarked  that he  would never make  such a  donation. He                                                                    
did not think  there was harm in the bill,  but did not know                                                                    
what the benefit would be either.                                                                                               
2:13:27 PM                                                                                                                    
Representative Carpenter  had a  dissenting opinion.  He had                                                                    
heard  from  many  people  that  state  programs  were  more                                                                    
important than the  PFD. The bill would allow  for people to                                                                    
apply  their PFD  checks towards  state programs  instead of                                                                    
keeping the checks for themselves.  He hoped that people who                                                                    
reached  out  to the  legislature  and  stated this  opinion                                                                    
would have a way to "put their money where their mouth is."                                                                     
Representative Wool  thought the  bill would  prove to  be a                                                                    
test of psychology.  He hoped the experiment  would be worth                                                                    
the cost and suggested a sunset.                                                                                                
Co-Chair  Foster  MOVED  to  report  CSHB  158(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
CSHB 158(FIN)  was REPORTED out  of committee with  five "do                                                                    
pass"  recommendations  and  with  six  "no  recommendation"                                                                    
recommendations   and   with    one   previously   published                                                                    
indeterminate fiscal note: FN1 (REV).                                                                                           
2:16:00 PM                                                                                                                    
AT EASE                                                                                                                         
2:18:29 PM                                                                                                                    
Co-Chair Merrick called the meeting back to order.                                                                              
HOUSE BILL NO. 395                                                                                                            
     "An Act  relating to the  Alaska marine  highway system                                                                    
     fund  and  the  Alaska  marine  highway  system  vessel                                                                    
     replacement  fund;   establishing  the   Alaska  marine                                                                    
     highway  system  fund  and the  Alaska  marine  highway                                                                    
     system  vessel  replacement  fund outside  the  general                                                                    
     fund;  authorizing the  commissioner of  transportation                                                                    
     and public  facilities to expend money  from the Alaska                                                                    
     marine  highway  system  fund  and  the  Alaska  marine                                                                    
     highway system  vessel replacement fund;  and providing                                                                    
     for an effective date."                                                                                                    
2:18:37 PM                                                                                                                    
Co-Chair Merrick asked if members had questions.                                                                                
2:18:55 PM                                                                                                                    
Co-Chair Merrick OPENED public testimony.                                                                                       
DAVID IGNELL,  SELF, JUNEAU, spoke  in opposition of  HB 395                                                                    
because  it   seemed  to  give   the  commissioner   of  the                                                                    
Department  of Transportation  and  Public Facilities  (DOT)                                                                    
authority to spend  a significant amount of  money. He noted                                                                    
that  the bill  was  introduced  less than  a  week ago  and                                                                    
questioned  why  public  testimony  had  been  scheduled  so                                                                    
quickly.  He  expressed  that it  seemed  like  someone  was                                                                    
trying to "pull  a fast one" with the bill.  It reminded him                                                                    
of the  events that led  up to  the defunding of  the Alaska                                                                    
Marine  Highways System  (AMHS).  He thought  that the  bill                                                                    
would  be detrimental  to  rural  communities. He  requested                                                                    
that  public hearing  of  the bill  be  postponed until  the                                                                    
people of Alaska  were more aware of it, and  for the public                                                                    
to be given  a "reasonable opportunity to  be heard" through                                                                    
public testimony.                                                                                                               
Co-Chair  Merrick  indicated  that  the  committee  was  not                                                                    
trying to  rush the bill  hearing process. She  relayed that                                                                    
the hearing had  been noticed in the previous  week and that                                                                    
this was the first hearing of the bill.                                                                                         
Mr.  Ignell stated  that he  had  spent only  a few  minutes                                                                    
looking  at the  bill. He  shared his  understanding of  the                                                                    
bill  hearing  process in  that  once  public testimony  was                                                                    
closed for a bill, the  public had no more opportunities for                                                                    
input.  He  thought the  amount  of  time given  for  public                                                                    
testimony was insufficient.                                                                                                     
Co-Chair Merrick  asked the testifier  to keep  his comments                                                                    
focused  on  the  bill. She  explained  that  the  committee                                                                    
procedurally  held public  testimony and  then would  decide                                                                    
whether  to draft  amendments based  on  the testimony.  She                                                                    
invited the next testifier to begin.                                                                                            
2:25:55 PM                                                                                                                    
PAT  ALEXANDER,  SELF,  SITKA (via  teleconference),  agreed                                                                    
with Mr. Ignell that the  legislation had been brought forth                                                                    
too  quickly. She  thought the  monies were  being moved  to                                                                    
another  account  to  avoid the  sweep  provision.  She  was                                                                    
interested in protecting  the funds so that  they would only                                                                    
be  spent to  support AMHS  and  not diverted  to any  other                                                                    
purpose. She asked for clarification on the legislation.                                                                        
Co-Chair  Merrick  indicated  committee  hearings  could  be                                                                    
revisited online.                                                                                                               
Representative Rasmussen asked if  the testifier objected to                                                                    
creating a separate account that  was outside of the general                                                                    
fund to disallow  the fund from being  sweepable. The reason                                                                    
the legislation  was brought forward  was because  there had                                                                    
been  previous accounts  that fell  under  the general  fund                                                                    
that were  subject to the sweep  and it did not  achieve the                                                                    
three-quarter vote threshold. It was  clear in the bill that                                                                    
the money was  for a specific purpose. It  also specified to                                                                    
what purpose the commissioner could use the funding.                                                                            
Ms. Alexander  did not want the  money to be swept  into the                                                                    
general fund. She  wanted to ensure that the  money would be                                                                    
spent on AMHS.                                                                                                                  
2:30:16 PM                                                                                                                    
Representative Rasmussen thought  the bill accomplished what                                                                    
the testifier was hoping for it to accomplish.                                                                                  
Co-Chair  Merrick  indicated  that  HB 395  dealt  with  the                                                                    
sweepability  of  AMHS, but  HB  322  also dealt  with  that                                                                    
matter.  They were  two  versions of  the  bill with  slight                                                                    
2:31:15 PM                                                                                                                    
Representative Josephson  noted that there  were differences                                                                    
in  the  bill.  He  wondered  if  Ms.  Alexander's  and  Mr.                                                                    
Ignell's  testimony  came  from  a  place  of  well-deserved                                                                    
confusion  because the  administration was  not in  favor of                                                                    
additional  AMHS funding  earlier in  the term.  He wondered                                                                    
whether    the   testifiers    were   suspicious    of   the                                                                    
administration because  of its  prior opposition  to funding                                                                    
Ms. Alexander  was concerned  that the  money would  be used                                                                    
for a  purpose other than  AMHS because of the  state's dire                                                                    
fiscal position.                                                                                                                
Representative Josephson  clarified that neither  bill could                                                                    
guarantee that funds would be  used for designated purposes.                                                                    
He explained that it was  a presumptive designation. It came                                                                    
down to a question of control  of the funds, and whether the                                                                    
legislature or  the commissioner should be  made responsible                                                                    
for those funds.                                                                                                                
2:33:35 PM                                                                                                                    
FRANK  LEE, SELF,  DOUGLAS  (via  teleconference), spoke  in                                                                    
support  of funding  the AMHS  for as  long as  possible. He                                                                    
indicated that  the funds should  be allocated for  AMHS and                                                                    
should not  be allocated  for any  other purpose.  There had                                                                    
been historic  problems maintaining the ferries  due to lack                                                                    
of  funds. He  stated  that AMHS  was  important to  sustain                                                                    
Alaskan  communities  and  was   a  lifeline  for  Southeast                                                                    
2:35:15 PM                                                                                                                    
WANDA  CULP, SELF,  JUNEAU  (via teleconference),  commented                                                                    
that the State  of Alaska was corporate-based  due to Alaska                                                                    
Native  Claims  Settlement  Act   (ANCSA).  She  added  that                                                                    
Southeast  Alaska was  still suffering  from the  governor's                                                                    
last withdrawal of  the AMHS and that it  was more expensive                                                                    
than ever  to travel on the  ferry. She noted that  DOT used                                                                    
federal and  state transportation  funding and that  it must                                                                    
not  be abused.  She suggested  that [federal]  Indian-based                                                                    
funding had  most likely  been absorbed  by DOT.  She stated                                                                    
that Native  people deserved  equal access  to AMHS  and the                                                                    
road  system,  otherwise  it  was   akin  to  genocide.  She                                                                    
wondered if  the governor's action  of taking from  the AMHS                                                                    
was   specifically  to   accommodate  the   corporate-rooted                                                                    
infrastructure  in the  northern areas  of the  state rather                                                                    
than accommodating  the Tongass National Forrest.  It seemed                                                                    
that the  funding the  governor took  was used  for business                                                                    
corporations. She  spoke of the  high cost of travel  by air                                                                    
and wanted  to keep  the AMHS out  of the  governor's hands.                                                                    
She  emphasized the  importance  of equality,  and that  the                                                                    
state needed to step back.                                                                                                      
2:39:28 PM                                                                                                                    
SHANNON  ADAMSON,  ALASKA REGIONAL  REPRESENTATIVE,  MASTERS                                                                    
MATES  AND PILOTS,  JUNEAU  (via  teleconference), spoke  in                                                                    
support  of AMHS.  She spoke  in support  of HB  322 and  in                                                                    
opposition to HB 395. She  opined that AMHS needed stability                                                                    
and  predictability,  and  HB 322  provided  AMHS  with  the                                                                    
knowledge  that  future  vessels  would be  available  on  a                                                                    
yearly basis.  Although HB 395  provided some  protection to                                                                    
the funds, it allowed the  DOT commissioner to spend some of                                                                    
the  funds without  much oversight.  She was  concerned that                                                                    
the  current management  system  would have  control of  the                                                                    
funds, which  was troubling because management  had problems                                                                    
making  decisions that  were  in the  best  interest of  the                                                                    
vessels  and the  communities. The  bill  failed to  provide                                                                    
some protections of the fund  from the political cycle which                                                                    
had always  been a problem  for AMHS. She concluded  that HB
322 would be a huge step forward.                                                                                               
2:41:44 PM                                                                                                                    
GERRY HOPE, TRANSPORTATION DIRECTOR,  SITKA TRIBE OF ALASKA,                                                                    
SITKA (via  teleconference), indicated that the  Sitka Tribe                                                                    
of Alaska  had submitted  comments in  writing and  had been                                                                    
solicited by  AMHS over the  past few decades  regarding the                                                                    
winter and  summer ferry schedules.  He noted  the declining                                                                    
service of  AMHS to Sitka.  He thought  the bill had  a good                                                                    
intent except  for the  control of  funding. The  concept of                                                                    
money being set  aside for the specific purpose  of AMHS was                                                                    
appreciated.  However, he  thought the  wheels came  off the                                                                    
bill by  putting too  much authority into  the hands  of the                                                                    
commissioner. He  liked the  concept of  the bill  but noted                                                                    
the  constitutional   requirement  for   funds  to   not  be                                                                    
designated for a specific purpose.                                                                                              
2:44:48 PM                                                                                                                    
Vice-Chair Ortiz  noted that there were  two different bills                                                                    
before  the committee,  HB 395  and  HB 322,  but that  both                                                                    
bills did  essentially the same  thing. The  main difference                                                                    
was that  the control of the  funds was in the  hands of the                                                                    
commissioner  of  DOT  under  HB  396.  Under  HB  322,  the                                                                    
authority rested in  the hands of the  legislature. He asked                                                                    
whether Mr. Hope had a preference between the bills.                                                                            
Mr.  Hope preferred  the authority  be in  the hands  of the                                                                    
legislature  but acknowledged  that things  could change  in                                                                    
the future. He stated that  more heads were better than one.                                                                    
He  questioned the  role  of the  newly  created AMHS  board                                                                    
because it was unclear.                                                                                                         
2:47:05 PM                                                                                                                    
Co-Chair Merrick CLOSED public testimony.                                                                                       
2:47:14 PM                                                                                                                    
Representative Thompson asked Co-Chair  Foster about the new                                                                    
timeline since  the Department of  Revenue had  released the                                                                    
spring revenue forecast.                                                                                                        
Co-Chair Merrick  asked Representative Thompson to  hold his                                                                    
question until the committee was done with HB 395.                                                                              
Representative Wool appreciated  Co-Chair Merrick's decision                                                                    
to bring  both bills  forward at the  same time.  He thought                                                                    
the committee would  be taking action on one bill  at a time                                                                    
because the bills were very  different. He thought there was                                                                    
no rush to move the  bills forward without first having deep                                                                    
Co-Chair  Merrick set  an amendment  deadline for  March 16,                                                                    
2:49:15 PM                                                                                                                    
Co-Chair Foster indicated amendments  on the budget would be                                                                    
due by March  18, 2022. The committee would  begin taking up                                                                    
amendments on Monday, March 21,  2022 and planned to discuss                                                                    
amendments through  Thursday, March 24, 2022.  He hoped that                                                                    
the budget  would be moved  out no later than  the following                                                                    
week. The  committee would have  hearings twice a  day until                                                                    
amendments were completed. The budget  would be moved to the                                                                    
House floor from March 28, 2022 to March 31, 2022.                                                                              
2:51:17 PM                                                                                                                    
Representative Thompson  thanked Co-Chair Foster  for laying                                                                    
out the timeframe.                                                                                                              
Co-Chair  Merrick  reviewed  the agenda  for  the  following                                                                    
Representative  Rasmussen  asked  Co-Chair Foster  when  the                                                                    
committee substitute (CS) would be taken up.                                                                                    
Co-Chair  Foster thought  that the  spring revenue  forecast                                                                    
was  supposed to  have been  released earlier  that morning,                                                                    
and the  intention was to base  a CS on that  forecast. More                                                                    
money was coming  into the state and there  was more funding                                                                    
available  for appropriation.  There would  be a  rollout of                                                                    
the changes the following afternoon.                                                                                            
HB  395  was  HEARD  and   HELD  in  committee  for  further                                                                    
Co-Chair Merrick adjourned the meeting.                                                                                         
2:53:05 PM                                                                                                                    
The meeting was adjourned at 2:53 p.m.                                                                                          

Document Name Date/Time Subjects
HB 158 Amendment 1 Thompson 030822.pdf HFIN 3/15/2022 1:30:00 PM
HB 158
HFIN HB158 DOR response 03.25.22.pdf HFIN 3/15/2022 1:30:00 PM
HB 158