Legislature(2023 - 2024)ADAMS 519

01/30/2023 01:30 PM House FINANCE

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

Download Mp3. <- Right click and save file as

Audio Topic
01:34:13 PM Start
01:36:16 PM HB40
01:36:18 PM Overview: Capital Budget by the Office of Management and Budget
02:48:05 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 40 APPROP: CAPITAL/SUPPLEMENTAL TELECONFERENCED
Heard & Held
+ Overview: Capital Budget by TELECONFERENCED
Neil Steininger, Director, Office of Management
and Budget
                  HOUSE FINANCE COMMITTEE                                                                                       
                     January 30, 2023                                                                                           
                         1:34 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:34:13 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Johnson called the  House Finance Committee meeting                                                                    
to order at 1:34 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bryce Edgmon, Co-Chair                                                                                           
Representative Bryce Edgmon, Co-Chair                                                                                           
Representative Neal Foster, Co-Chair                                                                                            
Representative DeLena Johnson, Co-Chair                                                                                         
Representative Julie Coulombe                                                                                                   
Representative Mike Cronk                                                                                                       
Representative Alyse Galvin                                                                                                     
Representative Sara Hannan                                                                                                      
Representative Andy Josephson                                                                                                   
Representative Dan Ortiz                                                                                                        
Representative Will Stapp                                                                                                       
Representative Frank Tomaszewski                                                                                                
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Neil Steininger, Director, Office  of Management and Budget,                                                                    
Office of the Governor.                                                                                                         
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Hannah Lager,  Administrative Services  Director, Department                                                                    
of Commerce,  Community and Economic Development,  Office of                                                                    
the Governor;  Teri West, Administrative  Services Director,                                                                    
Department    of   Corrections;    Melissa   Hill,    Acting                                                                    
Administrative  Services Director,  Department  of Fish  and                                                                    
Game, Office of the Governor.                                                                                                   
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 40     APPROP: CAPITAL/SUPPLEMENTAL                                                                                          
                                                                                                                                
          HB 40 was HEARD and HELD in committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
OVERVIEW:  CAPITAL BUDGET  BY THE  OFFICE OF  MANAGEMENT and                                                                    
BUDGET                                                                                                                          
                                                                                                                                
Co-Chair Edgmon  reviewed the meeting agenda.  He introduced                                                                    
his staff working on the capital budget.                                                                                        
                                                                                                                                
HOUSE BILL NO. 40                                                                                                             
                                                                                                                                
          "An Act  making appropriations,  including capital                                                                    
          appropriations  and  other appropriations;  making                                                                    
          supplemental         appropriations;        making                                                                    
          appropriations to capitalize  funds; and providing                                                                    
          for an effective date."                                                                                               
                                                                                                                                
1:36:16 PM                                                                                                                    
                                                                                                                                
^OVERVIEW: CAPITAL  BUDGET BY THE  OFFICE OF  MANAGEMENT and                                                                  
BUDGET                                                                                                                        
                                                                                                                                
1:36:18 PM                                                                                                                    
                                                                                                                                
NEIL STEININGER, DIRECTOR, OFFICE  OF MANAGEMENT AND BUDGET,                                                                    
OFFICE OF  THE GOVERNOR, provided a  PowerPoint presentation                                                                    
titled  "State of  Alaska Office  of Management  and Budget:                                                                    
Capital Budget HB40  and HB41" dated January  30, 2023 (copy                                                                    
on file).  He relayed the  capital budget had  been released                                                                    
on December  15 and  was split  between the  primary capital                                                                    
budget bill, HB 40, and the  mental health budget, HB 41. He                                                                    
began  with a  table on  slide  2 reflecting  that the  vast                                                                    
majority of  the funding was  in HB 40. Additionally,  HB 41                                                                    
included $10  million in mental health  related unrestricted                                                                    
general  fund (UGF)  capital  projects.  The total  proposed                                                                    
general  fund capital  was $276.4  million, which  leveraged                                                                    
about  $1.7 billion  in federal  funds for  a total  of $2.1                                                                    
billion  in overall  capital spending.  The budget  included                                                                    
funding  to   match  core   federal  programs   and  certain                                                                    
infrastructure bill  projects resulting  from Infrastructure                                                                    
Investment  and   Jobs  Act  (IIJA).  He   noted  the  house                                                                    
districts listed  in the bills reflected  districts prior to                                                                    
redistricting.  He explained  that  the  official file  that                                                                    
came  from  the  Division  of Elections  had  not  yet  been                                                                    
finalized and incorporated into the budget system.                                                                              
                                                                                                                                
1:38:09 PM                                                                                                                    
                                                                                                                                
Mr. Steininger moved  to a bar chart  illustrating a capital                                                                    
budget five-year  history on slide  3. He  highlighted there                                                                    
had been fairly constrained UGF funding  in the FY 20 and FY                                                                    
21  capital  budgets and  much  smaller  amounts of  federal                                                                    
funding (reflected in  light blue). The growth  in the light                                                                    
blue portions  of the bars  in FY  22 and FY  23 represented                                                                    
appropriations   of   IIJA   funding.   He   highlighted   a                                                                    
significant  increase in  the state's  receipts through  the                                                                    
Village  Safe   Water  Program,  the   Aviation  Improvement                                                                    
Programs, and  the Department  of Transportation  and Public                                                                    
Facilities   (DOT)   Surface  Transportation   Program.   He                                                                    
remarked  that  the  state  funding  had  increased  federal                                                                    
funding.                                                                                                                        
                                                                                                                                
Mr. Steininger pointed  out that UGF funding  was fairly low                                                                    
in  FY 21  because there  had  only been  a partial  capital                                                                    
budget appropriated.  He explained that the  legislature was                                                                    
mid-session when the COVID-19  pandemic hit, and the capital                                                                    
budget had  been left uncompleted.  He relayed that  much of                                                                    
the  funding was  made  up  in the  FY  22  budget for  core                                                                    
programs.                                                                                                                       
                                                                                                                                
Co-Chair  Edgmon stated  there  had been  many unknowns  the                                                                    
previous year  when the legislature  had been  going through                                                                    
debate on the  federal infrastructure bill. He  noted it had                                                                    
taken until  mid-session or  later to get  a good  handle on                                                                    
the funds. He recalled that  the $1.2 trillion included $600                                                                    
million  [billion] or  less for  formula  programs with  the                                                                    
remainder for  competitive grant  programs. He asked  if the                                                                    
governor  had  hired  someone  to  take  Mr.  Miles  Baker's                                                                    
position as the coordinator of the infrastructure program.                                                                      
                                                                                                                                
Mr.  Steininger answered  there was  more information  known                                                                    
about the  infrastructure program  since the  previous year.                                                                    
The state  had learned that  many of the  opportunities were                                                                    
competitive. He stated there were  a couple of new items for                                                                    
the  Alaska Energy  Authority (AEA)  added into  the capital                                                                    
budget;  however,  there  were  not as  many  items  as  the                                                                    
initial optimistic  estimates had indicated the  state would                                                                    
receive. There had been appropriations  the previous year to                                                                    
enable some  of the agencies  to chase the  federal rewards.                                                                    
He highlighted  the Alaska Marine  Highway System  (AMHS) as                                                                    
an example of an agency  seeing a recent release of rewards.                                                                    
He noted  the news was very  recent and was not  included in                                                                    
the  current capital  budget. The  governor's office  had an                                                                    
acting  infrastructure  coordinator  who   may  not  be  the                                                                    
permanent coordinator.                                                                                                          
                                                                                                                                
1:42:12 PM                                                                                                                    
                                                                                                                                
Mr. Steininger  continued to review  slide 3 and  noted that                                                                    
the dark blue bars reflecting UGF  were much larger in FY 22                                                                    
and  FY 23  than in  other  years. He  expounded there  were                                                                    
substantial  surpluses  when  the  FY  23  budget  had  been                                                                    
developed.  He explained  that much  of the  surplus funding                                                                    
had gone to discretionary capital  budget items with pent up                                                                    
demand  over  a  long  time  period  of  fairly  constrained                                                                    
capital budgets. The FY 24  capital budget decreased because                                                                    
there had not  been room for a  discretionary capital budget                                                                    
of the size seen in FY 23.                                                                                                      
                                                                                                                                
Mr. Steininger  advanced to  slide 4  titled "UGF  Capital                                                                      
Minimum  Match." The  slide addressed  the  amount of  money                                                                    
necessary in  order to  match to  core federal  programs and                                                                    
how  it  had changed  over  the  past  couple of  years.  He                                                                    
highlighted the  increase in federal  rewards coming  in due                                                                    
to IIJA. The  dark blue portion of the  bars represented the                                                                    
base  capital  budget  (the  base  match  for  core  federal                                                                    
programs). The  light yellow  bars reflected  matching funds                                                                    
leveraging  federal  funding  and  discretionary  funds  for                                                                    
state  funded  programs.  He  remarked   there  had  been  a                                                                    
significant  increase in  the general  funds needed  to fund                                                                    
and  leverage federal  dollars.  The FY  24 proposed  budget                                                                    
included about  $167.4 million  for core  recurring projects                                                                    
listed on slide 4:                                                                                                              
                                                                                                                                
   Baseline/Minimum match projects include:                                                                                     
                                                                                                                                
    Community Block Grants                                                                                                   
                                                                                                                                
    Alaska Energy Authority Energy Projects                                                                                  
                                                                                                                                
    Village Safe Water and Wastewater                                                                                        
                                                                                                                                
    AHFC Housing Programs                                                                                                    
                                                                                                                                
    Surface Transportation and Aviation State Match                                                                          
                                                                                                                                
Mr. Steininger  elaborated that the  Village Safe  Water and                                                                    
Surface   Transportation    and   Aviation    Programs   saw                                                                    
significant increase from IIJA,  which drove a corresponding                                                                    
increase  in the  need  for matching  funds  in the  capital                                                                    
budget. He  highlighted the match amount  was roughly double                                                                    
what it had been in FY 20 and  FY 21. He noted it was not an                                                                    
entirely fair  comparison because  the state had  used other                                                                    
mechanisms in FY  20 and FY 21 to cobble  the matching funds                                                                    
together. He explained that money  had been reallocated from                                                                    
older completed projects with funding remaining.                                                                                
                                                                                                                                
1:45:32 PM                                                                                                                    
                                                                                                                                
Mr.  Steininger  turned  to  slide  5  titled  "Capital  UGF                                                                    
Unobligated Appropriations."  He reported that  per statute,                                                                    
capital  projects had  a five-year  time horizon  before the                                                                    
funding  lapsed.  The  projects  could  be  administratively                                                                    
extended annually if there was  activity on a project within                                                                    
the course of the year.  He used a hypothetical road project                                                                    
as  an  example  and  explained  that  if  the  construction                                                                    
process was taking longer than  the five-year timeframe, the                                                                    
project could be  extended as long as there  was active work                                                                    
taking place. Slide  5 showed the amount of  funding left on                                                                    
aged projects.                                                                                                                  
                                                                                                                                
Mr.  Steininger   remarked  that  as  expected,   there  was                                                                    
significant  funding remaining  for FY  23 projects  because                                                                    
they had just  become active on July 1, 2022.  He noted that                                                                    
many of the projects for FY  22 had only become effective at                                                                    
the end  of June  of 2022.  He pointed  out there  was still                                                                    
unspent money  on projects that  went back greater  than ten                                                                    
years.  He explained  that  some of  the  projects had  been                                                                    
completed under budget and  had unobligated money remaining.                                                                    
He detailed that  the Office of Management  and Budget (OMB)                                                                    
produced  an  annual  capital  appropriation  status  report                                                                    
detailing every project reflected  on slide 5, the remaining                                                                    
funding, whether a project had  been extended and the reason                                                                    
for  the  extension,  or  if   the  money  was  unspent  and                                                                    
available  for  reappropriation  or   lapse  back  into  the                                                                    
General Fund.                                                                                                                   
                                                                                                                                
1:47:46 PM                                                                                                                    
                                                                                                                                
Representative Hannan observed the graph  on slide 5 did not                                                                    
distinguish  money still  needed to  complete projects  that                                                                    
had  taken  longer  than  five years  from  money  that  was                                                                    
available  for reappropriation  because a  project had  been                                                                    
completed  and  had  funding remaining.  She  asked  if  the                                                                    
information  would be  presented to  the committee.  She was                                                                    
particularly interested in the  information for the projects                                                                    
in the six to ten-year range.                                                                                                   
                                                                                                                                
Mr.  Steininger  replied   that  the  capital  appropriation                                                                    
status report included many of  the different data points to                                                                    
get  a better  idea  on  which of  the  projects were  still                                                                    
moving  forward   and  which   projects  may   have  funding                                                                    
available for reappropriation. The  report also included the                                                                    
project location and details.                                                                                                   
                                                                                                                                
Representative  Hannan asked  for  clarification on  whether                                                                    
she needed  to dig through  the report to  determine whether                                                                    
there was  $1 million  laying around in  a project  that had                                                                    
not  been  noticed  or  whether $1  million  was  needed  to                                                                    
complete  a project.  She  reasoned that  if  the state  had                                                                    
already  invested the  vast majority  of the  funding for  a                                                                    
project,  most people  would conclude  the funding  would be                                                                    
used to  complete a project.  She thought there should  be a                                                                    
pretty good  handle on whether  there was  funding available                                                                    
that  went  back ten  years.  She  pointed  out that  a  few                                                                    
million dollars  here and  there made  a difference  for new                                                                    
projects.  She asked  if committee  members should  look for                                                                    
the funding or if that was up to OMB.                                                                                           
                                                                                                                                
Mr.  Steininger  answered  that part  of  OMB's  development                                                                    
process  for  the  amended and  supplemental  budgets  often                                                                    
involved  looking at  old projects  to  identify which  ones                                                                    
could be reappropriated for different  uses or to fund state                                                                    
match  for   federal  programs.   He  elaborated   that  OMB                                                                    
identified  some   of  the  old  projects   [with  remaining                                                                    
funding] that  the administration felt  could be moved  to a                                                                    
different use. He relayed there  was the opportunity for the                                                                    
legislature  to review  the  [capital appropriation  status]                                                                    
report  and locate  projects to  propose for  an alternative                                                                    
use.                                                                                                                            
                                                                                                                                
Co-Chair Edgmon  asked if  any of  the two  bars on  the far                                                                    
right of the  slide 5 were affiliated  with COVID-19 capital                                                                    
funds that were still on the books.                                                                                             
                                                                                                                                
1:51:31 PM                                                                                                                    
                                                                                                                                
Mr. Steininger answered  the chart should filter  out any of                                                                    
the Coronavirus  Relief Fund (CRF)  or American  Rescue Plan                                                                    
Act (ARPA) dollars that had  been appropriated directly to a                                                                    
capital project. He would confirm and follow up.                                                                                
                                                                                                                                
Mr.  Steininger reviewed  FY 24  capital project  highlights                                                                    
[by department] beginning on slide  6 [through slide 10]. He                                                                    
noted the  slides did  not cover  every project  included in                                                                    
the capital  budget. The slides included  projects that were                                                                    
either new, had a unique quality,  or were a priority of the                                                                    
administration. He  began with  the Department  of Commerce,                                                                    
Community and  Economic Development (DCCED). He  relayed the                                                                    
Alaska  Gasline  Development  Corporation  (AGDC)  had  been                                                                    
pursuing  a  project  to  make Alaska  a  hydrogen  hub.  He                                                                    
detailed  that  $10 million  in  federal  receipts would  be                                                                    
available  in case  the pursuit  was  successful. There  was                                                                    
still a  question on  whether the  project would  be viable,                                                                    
and  he was  anticipating  additional  information from  the                                                                    
agency in  the future. The  second project was  $1.8 million                                                                    
for  AEA  pertaining  to a  statewide  grid  resilience  and                                                                    
reliability.  The  item  was  new and  was  $12  million  in                                                                    
federal receipts from IIJA.                                                                                                     
                                                                                                                                
Representative  Stapp  asked  if  a  state  match  had  been                                                                    
identified  for the  $10 million  in federal  funds for  the                                                                    
hydrogen hub.                                                                                                                   
                                                                                                                                
Mr. Steininger  answered it  was too  early in  the planning                                                                    
stages to know.                                                                                                                 
                                                                                                                                
Mr. Steininger  continued to review DCCED  projects on slide                                                                    
6. The third project was  $2.5 million of business licensing                                                                    
corporate  filing  fees to  build  a  public engagement  and                                                                    
customer relationship management system  for the Division of                                                                    
Corporations,  Business and  Professional Licensing  (CBPL).                                                                    
The budget  also included  $3 million  in a  named recipient                                                                    
grant  to   build  out  three-phase  power   extensions  and                                                                    
upgrades in the  Delta Farm Region. The  item worked towards                                                                    
the  governor's Food  Security  Initiative.  The last  DCCED                                                                    
item  was $5  million for  statewide marketing  and economic                                                                    
development to market  Alaska as a place to  do business and                                                                    
market items made  in Alaska to those outside  of Alaska. He                                                                    
moved   to  the   Department   of   Corrections  (DOC)   and                                                                    
highlighted  a  $3  million  UGF  increment  for  the  Point                                                                    
Mackenzie  Correctional Farm  Produce Processing  Plant. The                                                                    
goal was to  provide food to the  entire correctional system                                                                    
by processing the food grown at the plant.                                                                                      
                                                                                                                                
Co-Chair Edgmon remarked it had  been just a couple of years                                                                    
ago when  the last two  economic development staff  had been                                                                    
transferred from  DCCED to the  governor's office.  He asked                                                                    
if the  staff were returning  to DCCED to administer  the $5                                                                    
million [for statewide  marketing and economic development].                                                                    
Alternatively,  he asked  if the  increment anticipated  the                                                                    
creation of new staff.                                                                                                          
                                                                                                                                
Mr. Steininger  answered that the appropriation  was for new                                                                    
activities at DCCED. He was  uncertain whether the incumbent                                                                    
staff would  be transferred back  to DCCED. He  would follow                                                                    
up on  the question.  The idea behind  the increment  was to                                                                    
restart some of the activity  that had been tapered down and                                                                    
eliminated  over the  years of  budget cuts.  He stated  the                                                                    
transfer  of  positions  had  occurred  during  a  different                                                                    
economic time  for the  state. He  remarked that  things had                                                                    
changed considerably in two years.                                                                                              
                                                                                                                                
1:55:54 PM                                                                                                                    
                                                                                                                                
Representative  Josephson asked  about the  program receipts                                                                    
of  $5  million for  the  statewide  marketing and  economic                                                                    
development initiative  under DCCED.  He wondered  what made                                                                    
them program receipts.                                                                                                          
                                                                                                                                
Mr.  Steininger  replied  that  the  $5  million  came  from                                                                    
business licensing  fees, which  were classified  as program                                                                    
receipts and  designated general  funds (DGF).  He explained                                                                    
that CBPL was responsible for collecting the fees.                                                                              
                                                                                                                                
Representative Josephson  asked what  the receipts  had been                                                                    
used for in previous years.                                                                                                     
                                                                                                                                
Mr.   Steininger  answered   that  the   business  licensing                                                                    
receipts had been suspended during  COVID-19 for a period of                                                                    
time. The fees  could be utilized for  the proposed activity                                                                    
as the need to have the fees suspended began to go away.                                                                        
                                                                                                                                
1:57:04 PM                                                                                                                    
                                                                                                                                
Representative Tomaszewski  looked at the  three-phase power                                                                    
extensions and  upgrades to Delta  Farm region. He  asked if                                                                    
any  other farm  regions  had applied  for  grants for  that                                                                    
purpose.                                                                                                                        
                                                                                                                                
Mr. Steininger answered  that he was not aware  of any other                                                                    
regions that  had applied  for the  funding. He  relayed the                                                                    
project  had  been identified  as  a  specific need  through                                                                    
community engagement.                                                                                                           
                                                                                                                                
Co-Chair  Johnson  stated  she   had  recently  heard  about                                                                    
additional federal funding for AMHS. She asked for detail.                                                                      
                                                                                                                                
Mr. Steininger  replied that the  state had  received notice                                                                    
the previous  week that it  was being awarded  a significant                                                                    
amount  of capital  funding for  AMHS.  The current  capital                                                                    
budget did  not include  matching funds.  The administration                                                                    
believed a couple of the  appropriations could be applied to                                                                    
the match  for some of  the projects. He explained  that OMB                                                                    
was  still working  through how  much  additional match  the                                                                    
state would  need. He noted  the committee  could anticipate                                                                    
seeing amendments related to the funds.                                                                                         
                                                                                                                                
Co-Chair Johnson  asked for verification  the state  did not                                                                    
know the matching requirement for the federal funds.                                                                            
                                                                                                                                
Mr. Steininger believed the dollar  amount was known, but he                                                                    
did not  have it on  hand. He relayed  that OMB did  not yet                                                                    
know how  much additional  appropriation would be  needed to                                                                    
cover the incoming funds.                                                                                                       
                                                                                                                                
1:59:30 PM                                                                                                                    
                                                                                                                                
Co-Chair  Edgmon believed  it  illustrated the  "gargantuan"                                                                    
infrastructure act  was still  unfolding before  the state's                                                                    
eyes.  He   believed  there   would  likely   be  additional                                                                    
instances  where  the  arrival  of  things  like  the  ferry                                                                    
funding   came  unexpectedly   and   would  require   budget                                                                    
amendments.                                                                                                                     
                                                                                                                                
Representative  Hannan   looked  at  the  funding   for  the                                                                    
statewide  marketing  and  economic  development  initiative                                                                    
under  DCCED coming  in the  form of  program receipts.  She                                                                    
asked  how  to  anticipate  the  program  receipts  for  the                                                                    
license  fees  that  had  been  waived  for  two  years  and                                                                    
reinstated.  She highlighted  that most  business licensures                                                                    
were on  a two-year cycle.  She considered a  scenario where                                                                    
license holders  had to pay  their fees in the  current year                                                                    
and it brought  in $10 million. She noted  that the proposed                                                                    
increment was  $5 million. She  asked if the funding  was to                                                                    
be spent over  a period of five years or  one year only. She                                                                    
asked  for the  total anticipated  program receipts  for the                                                                    
current and  next fiscal  years. She  stated that  one issue                                                                    
had been ensuring the program  receipt funding was available                                                                    
for  a two-year  cycle of  investigation of  boards receipts                                                                    
malfeasance.  She explained  that  program  receipts had  to                                                                    
cover operations. She  remarked that when the  fees had been                                                                    
waived  for two  years  the  state dropped  out  of sync  of                                                                    
knowing  what the  incoming  funding would  be  in the  next                                                                    
fiscal  year.  She  wondered  if  $5  million  in  one  year                                                                    
represented 50 percent of anticipated  program receipts or 1                                                                    
percent.                                                                                                                        
                                                                                                                                
Mr. Steininger deferred to DCCED for detail.                                                                                    
                                                                                                                                
2:01:38 PM                                                                                                                    
                                                                                                                                
HANNAH LAGER,  ADMINISTRATIVE SERVICES  DIRECTOR, DEPARTMENT                                                                    
OF COMMERCE,  COMMUNITY AND ECONOMIC DEVELOPMENT,  OFFICE OF                                                                    
THE GOVERNOR (via teleconference),  replied that the license                                                                    
receipts  were collected  every  year  for corporations  and                                                                    
businesses.  They were  slightly  different  than fees  that                                                                    
were  collected every  two years.  The  most recent  revenue                                                                    
projections  were just  over $5  million for  a full  fiscal                                                                    
year.  The increment  [on slide  6] was  a one-time  capital                                                                    
appropriation with a five-year collection period.                                                                               
                                                                                                                                
Representative  Hannan  asked   what  the  department  would                                                                    
anticipate in terms of any  restraints for the department to                                                                    
do its job if the $5  million in fees were diverted entirely                                                                    
from operation to capital.                                                                                                      
                                                                                                                                
Ms.  Lager answered  that corporations  filing receipts  had                                                                    
been  collected during  the COVID-19  pandemic and  had been                                                                    
sufficient to fund ongoing operations.                                                                                          
                                                                                                                                
Representative Ortiz  asked if the legislature  could expect                                                                    
an amended capital budget from the governor's office.                                                                           
                                                                                                                                
Mr.  Steininger answered  that  per  statute the  governor's                                                                    
office  had  until  the  30th  day  of  session  to  release                                                                    
amendments to  any of the  budgets (operating,  capital, and                                                                    
mental health). The deadline was  February 15 in the current                                                                    
session.                                                                                                                        
                                                                                                                                
Representative Ortiz  asked if the legislature  could expect                                                                    
to know the  state matching requirement in  order to receive                                                                    
the $285  million for  AMHS. He  asked for  verification the                                                                    
request  would  come  from the  administration  the  amended                                                                    
budget.                                                                                                                         
                                                                                                                                
Mr. Steininger replied affirmatively.                                                                                           
                                                                                                                                
2:05:03 PM                                                                                                                    
                                                                                                                                
Representative  Coulombe looked  at  the  increment for  the                                                                    
Point Mackenzie  Correctional Farm Produce  Processing Plant                                                                    
under DOC. She  remarked that DOC had  already received $1.5                                                                    
million for the plant and  the request was for an additional                                                                    
$3 million. She  asked if the additional funding  was due to                                                                    
building cost increases.                                                                                                        
                                                                                                                                
Mr. Steininger  confirmed the increment  was in  addition to                                                                    
the  [previously  funded]  $1.5   million  to  complete  the                                                                    
processing  plant.   He  deferred  to  the   department  for                                                                    
additional detail.                                                                                                              
                                                                                                                                
2:06:53 PM                                                                                                                    
                                                                                                                                
TERI WEST,  ADMINISTRATIVE SERVICES DIRECTOR,  DEPARTMENT OF                                                                    
CORRECTIONS,  OFFICE OF  THE GOVERNOR  (via teleconference),                                                                    
replied  that DOC  had solicited  and negotiated  a contract                                                                    
with  an  engineer  to  complete  a  bid-ready  design.  She                                                                    
explained that  additional costs had been  identified during                                                                    
the  process. Additionally,  the  cost  of construction  and                                                                    
equipment had risen since the original review.                                                                                  
                                                                                                                                
Representative Coulombe  asked if  the initial ask  for $1.5                                                                    
million  was only  for  planning and  design.  She asked  if                                                                    
anything had been built yet.                                                                                                    
                                                                                                                                
Ms.  West  replied  that  she   would  follow  up  with  the                                                                    
information.                                                                                                                    
                                                                                                                                
2:07:35 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:08:11 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Edgmon  asked  the previous  speaker  to  identify                                                                    
herself for the record.                                                                                                         
                                                                                                                                
Ms. West complied.                                                                                                              
                                                                                                                                
Mr. Steininger  turned to  slide 7  and continued  to review                                                                    
capital highlights. He reviewed  an increment of $100,000 to                                                                    
build  out  ambient  air   monitoring  shelters  within  the                                                                    
Department of  Environmental Conservation (DEC)  budget. The                                                                    
item  was associated  with an  operating  budget request  to                                                                    
increase the  ability to monitor pollutants  coming into the                                                                    
state  from outside  sources. Under  the Department  of Fish                                                                    
and Game  (DFG), the budget  included $1 million UGF  and $2                                                                    
million   in  federal   funds  for   Arctic  fisheries.   He                                                                    
elaborated  that as  the Arctic  waterways  opened up  more,                                                                    
there  may be  opportunity for  commercial fisheries  in the                                                                    
region. The increment would fund associated research.                                                                           
                                                                                                                                
Mr.  Steininger reviewed  a $10  million  increment for  the                                                                    
Office   of  the   Governor   for   legal,  expertise,   and                                                                    
consultation services to support statehood defense.                                                                             
                                                                                                                                
Co-Chair  Foster referenced  the DFG  budget. He  stated his                                                                    
understanding  the  governor  had  included  money  for  the                                                                    
collapse of the  salmon fisheries on the Yukon.  He asked if                                                                    
the increment was perhaps located in the operating budget.                                                                      
                                                                                                                                
Mr.  Steininger  replied  that   there  were  other  capital                                                                    
projects  for  DFG. The  [Arctic  fisheries]  item had  been                                                                    
selected  for the  slide because  it was  a new  initiative.                                                                    
The budget  did include  appropriations related  to research                                                                    
for other  fisheries around the  state. He noted  there were                                                                    
capital  and   operating  appropriations  to  look   at  the                                                                    
particular region. He deferred to DFG for further detail.                                                                       
                                                                                                                                
Co-Chair Foster requested additional detail.                                                                                    
                                                                                                                                
2:11:07 PM                                                                                                                    
                                                                                                                                
MELISSA  HILL,  ACTING   ADMINISTRATIVE  SERVICES  DIRECTOR,                                                                    
DEPARTMENT OF  FISH AND  GAME, OFFICE  OF THE  GOVERNOR (via                                                                    
teleconference), asked to for the question to be restated.                                                                      
                                                                                                                                
Co-Chair  Foster  restated his  question.  He  asked if  the                                                                    
capital budget  included an increment related  to the salmon                                                                    
collapse on the Yukon.                                                                                                          
                                                                                                                                
Ms. Hill replied  that she would follow up.  She noted there                                                                    
were  some capital  projects regarding  Yukon research.  The                                                                    
department  was also  utilizing  some  food security  monies                                                                    
received during COVID for research as well.                                                                                     
                                                                                                                                
Representative Josephson referenced  the legal and expertise                                                                    
dollars  for the  Office  of  the Governor  on  slide 7.  He                                                                    
remarked  that  the  project  summary on  page  68  [of  the                                                                    
capital  budget backup  information]  clearly indicated  the                                                                    
funding was  for human capacity  and personnel. He  asked if                                                                    
it would be  more appropriate to include the  funding in the                                                                    
Department   of    Law's   (DOL)   operating    budget   for                                                                    
transparency.                                                                                                                   
                                                                                                                                
Mr.   Steininger  answered   that   the   location  of   the                                                                    
appropriation had  been discussed during the  development of                                                                    
the  budget.  The  prior two  appropriations  for  statehood                                                                    
defense  went  to  DOL   directly.  The  administration  had                                                                    
included  the increment  under the  Office  of the  Governor                                                                    
because  some  of  the  activities  fell  outside  of  DOL's                                                                    
purview. For  example, a  case requiring  research, science,                                                                    
or data  collection would be  better done by  the Department                                                                    
of Natural  Resources (DNR) and  the Office of  the Governor                                                                    
could  use  a  reimbursable   services  agreement  (RSA)  to                                                                    
transfer some of the funding to  DNR to support the work. He                                                                    
stated DOL  was probably the  largest piece of  the activity                                                                    
because  it  was  primarily  litigation  or  hiring  outside                                                                    
counsel. He noted that if  the appropriation was made to DOL                                                                    
it could be  managed the same way. He  stated that including                                                                    
the money under the Office  of the Governor provided for the                                                                    
slightly  expanded scope  of what  the money  could be  used                                                                    
for.                                                                                                                            
                                                                                                                                
2:14:28 PM                                                                                                                    
                                                                                                                                
Representative  Josephson was  interested  in DOL's  batting                                                                    
average  in prevailing  in the  cases.  The legislature  was                                                                    
seeing  a steady  increase in  the  item every  year and  he                                                                    
wanted to know more about it.                                                                                                   
                                                                                                                                
Representative  Stapp referenced  the  increment for  Arctic                                                                    
fisheries  and read  the backup  information specifying  the                                                                    
funding was  for potential study  of commercial  fishing for                                                                    
Arctic fin  fish. He  had never heard  about the  concept of                                                                    
commercial fishing in the Chukchi  Sea or other. He asked if                                                                    
there was a  contact his office could reach out  to for more                                                                    
information on the need for the study.                                                                                          
                                                                                                                                
Mr.  Steininger  answered  that   the  commissioner  of  DFG                                                                    
[Commissioner Doug Vincent-Lang] was  interested in the idea                                                                    
as  an   opportunity  for  the   state.  He   indicated  the                                                                    
commissioner  would  be  a  good  person  to  speak  to.  He                                                                    
clarified  the  fisheries  did   not  currently  exist;  the                                                                    
commissioner saw  the fisheries on  the horizon as  a result                                                                    
of waterways opening up.                                                                                                        
                                                                                                                                
Co-Chair  Edgmon  believed  it  was broader  than  just  the                                                                    
opening  of waterways.  He pointed  out it  included warming                                                                    
ocean trends moving fish farther  north along the coast. The                                                                    
state was seeing  certain species that had not  been seen in                                                                    
areas before  and salmon being  caught in the  northern part                                                                    
of the state where they had not previously been.                                                                                
                                                                                                                                
2:16:48 PM                                                                                                                    
                                                                                                                                
Representative  Hannan  referenced   the  statehood  defense                                                                    
funding under the  Office of the Governor. She  asked if the                                                                    
$10 million was for new  or ongoing litigation. She referred                                                                    
to a  court ruling impacting Southeast  trollers targeted in                                                                    
the multistate  treaty related to salmon  harvest. She asked                                                                    
if there  was potential  for the state  to intervene  in the                                                                    
case with some of the funding.                                                                                                  
                                                                                                                                
Mr.  Steininger  answered  there  was a  report  of  current                                                                    
litigation and where DOL saw  the next steps for litigation.                                                                    
The overall  list was  far greater  in estimated  costs than                                                                    
$6.5  million  appropriated in  the  prior  two years  could                                                                    
support.  Part  of  the  increment  pertained  to  continued                                                                    
litigation and  part pertained to  new litigation  as issues                                                                    
arose. He deferred  to DOL for discussion  of specific cases                                                                    
or issues.  He stated OMB  could provide reports  on current                                                                    
ongoing  cases. He  referred  to Representative  Josephson's                                                                    
earlier   question  about   the   success   rate  of   prior                                                                    
initiatives and  relayed the  information could  be provided                                                                    
to the committee.                                                                                                               
                                                                                                                                
2:19:06 PM                                                                                                                    
                                                                                                                                
Mr. Steininger  reviewed the  increments for  the Department                                                                    
of Labor and  Workforce Development (DLWD) at  the bottom of                                                                    
slide  7.  The budget  included  $1.3  million UGF  for  the                                                                    
Business Enterprise Program,  which provided startup capital                                                                    
to  blind and  disabled  businesses. He  explained that  the                                                                    
fund  that funded  the program  was  part of  the sweep.  He                                                                    
elaborated funding was generated  through payments back from                                                                    
income  earned by  the blind  and  disabled businesses.  The                                                                    
administration included  the funding in addition  to another                                                                    
$620,000 for a childcare facility  pilot program at the Mat-                                                                    
Su  Regional Hospital  to look  at  expanding childcare.  He                                                                    
explained the  total funding was  equal to the  amount swept                                                                    
from  the program  into  the  Constitutional Budget  Reserve                                                                    
(CBR).                                                                                                                          
                                                                                                                                
Representative   Josephson   asked  for   verification   the                                                                    
increments  were replacing  dollars in  an account  that had                                                                    
been swept.                                                                                                                     
                                                                                                                                
Mr. Steininger replied affirmatively.                                                                                           
                                                                                                                                
Representative Josephson  asked if the funds  had been swept                                                                    
seven months back at midnight on June 30, 2022.                                                                                 
                                                                                                                                
Mr.  Steininger  answered  affirmatively.  He  detailed  the                                                                    
increments reflected  an appropriation  of UGF to  a capital                                                                    
project,  which  would  be   considered  obligated  and  not                                                                    
subject to the sweep at the end of the current fiscal year.                                                                     
                                                                                                                                
Representative  Josephson asked  if the  funds were  part of                                                                    
tens of millions  of dollars like the  Higher Education Fund                                                                    
(that  disappeared   into  the  CBR)  or   relatively  small                                                                    
accounts.                                                                                                                       
                                                                                                                                
Mr.  Steininger would  provide the  committee with  the list                                                                    
from  the  state's  financial  report.  He  noted  only  the                                                                    
unaudited  list was  available at  present.  The list  would                                                                    
include the amounts swept from  individual funds, which were                                                                    
primarily smaller  funds. The prior budget  had replaced the                                                                    
use of the funds with  UGF where they supported state agency                                                                    
operations to  account for the  sweep. The  issue pertaining                                                                    
to the funding  for DLWD had not been resolved  in the prior                                                                    
budget and  had come to the  administration's attention over                                                                    
the  summer.  He  stated  it was  different  solution  to  a                                                                    
problem caused from the same action.                                                                                            
                                                                                                                                
2:22:29 PM                                                                                                                    
                                                                                                                                
Representative Josephson  asked if the funds  would not have                                                                    
needed to be  backfilled if the House had voted  in favor of                                                                    
the CBR draw.                                                                                                                   
                                                                                                                                
Mr.  Steininger  replied that  if  the  CBR sweep  had  been                                                                    
reversed,  the   Business  Enterprise  Program   would  have                                                                    
retained  the $2  million and  could have  continued program                                                                    
operations.                                                                                                                     
                                                                                                                                
Co-Chair Edgmon  recalled that  the three-quarter  vote that                                                                    
happened  on the  last day  of session  [in 2022]  pertained                                                                    
solely  to the  additional  funding for  the Permanent  Fund                                                                    
Dividend;  it had  not  been  the traditional  three-quarter                                                                    
vote  that  would have  reversed  the  annual sweep  of  the                                                                    
plethora  of  smaller   funds.  He  asked  if   it  was  Mr.                                                                    
Steininger's recollection as well.                                                                                              
                                                                                                                                
Mr. Steininger  replied that he  would have to follow  up to                                                                    
determine whether there had been sweep language.                                                                                
                                                                                                                                
Co-Chair Edgmon stated to his knowledge there had not.                                                                          
                                                                                                                                
Representative Galvin asked about  the $10 million increment                                                                    
for  legal expertise  under the  Office of  the Governor  on                                                                    
slide 7.  She looked at  the backup documents  and indicated                                                                    
the increment was  almost entirely for the  purpose of legal                                                                    
counsel.  She thought  it appeared  the work  that would  be                                                                    
beyond DOL  also pertained to  people. She asked why  it had                                                                    
been included in the capital budget.                                                                                            
                                                                                                                                
2:25:24 PM                                                                                                                    
                                                                                                                                
Mr. Steininger believed  the question came down  to what was                                                                    
classified  as   a  capital  project  versus   an  operating                                                                    
project.  He   stated  there  were  a   couple  reasons  the                                                                    
administration  had  proposed  the increment  as  a  capital                                                                    
project.  He  detailed  that  some  of  the  cases  took  an                                                                    
indeterminate  amount  of time;  the  court  system did  not                                                                    
operate on the same timelines  as the fiscal year structure.                                                                    
He explained  that capital appropriations lapsed  after five                                                                    
years   rather   than   one  year,   which   provided   more                                                                    
flexibility.                                                                                                                    
                                                                                                                                
Representative Galvin  asked if it  was out of the  realm of                                                                    
possibility  to  come  back  if   more  was  needed  in  the                                                                    
following  year  if  the  increment   was  included  in  the                                                                    
operating budget. She noted that  when she looked at many of                                                                    
the  numbers, she  saw numerous  unused funds.  She reasoned                                                                    
that  when looking  for unused  funds it  seemed to  be good                                                                    
practice  to  tighten up  a  bit  to  reduce the  number  of                                                                    
"hanging  loose funds."  She was  trying to  draw a  balance                                                                    
between allowing  for the extended  time to spend  the funds                                                                    
for what  appeared to be  a general statement about  how the                                                                    
funds  would  be spent  and  helping  the public  appreciate                                                                    
capital  versus  operating  needs.  She  was  struggling  to                                                                    
understand why  the funds needed  the coming year  would not                                                                    
be included in  the operating budget. She  suggested that if                                                                    
there  were extended  legal battles,  the  funding could  be                                                                    
requested  in  a  future  operating  budget  or  from  other                                                                    
unspent funds.                                                                                                                  
                                                                                                                                
2:28:21 PM                                                                                                                    
                                                                                                                                
Mr.  Steininger understood  the question  and the  desire to                                                                    
take the situation year by  year. He stated that function in                                                                    
operating  budgets  for  the   state  was  a  year-over-year                                                                    
decision.  He explained  that the  specific situation  was a                                                                    
bit  unique because  of  the need  to  enter into  long-term                                                                    
contracts for professional  services. The administration had                                                                    
proposed  the  item  as  capital  to  make  the  operational                                                                    
function easier and  would avoid running the  risk of having                                                                    
a  single year  appropriation for  a project  that may  take                                                                    
multiple years. The  goal was to provide  resourcing to DOL,                                                                    
DEC, DFG,  and DNR in order  to defend the state's  right to                                                                    
develop its lands. The budget  proposal was one mechanism to                                                                    
get to that goal.                                                                                                               
                                                                                                                                
Co-Chair Edgmon  noted they were  about halfway  through the                                                                    
slides. He suggested picking up the pace.                                                                                       
                                                                                                                                
2:30:25 PM                                                                                                                    
                                                                                                                                
Mr. Steininger moved  to slide 8 and continued  to review FY                                                                    
24 capital  budget highlights.  There was  a $1  million UGF                                                                    
increment with $6 million in  federal match for construction                                                                    
completion  of a  certified veterans  cemetery in  Fairbanks                                                                    
within  the  Department  of Military  and  Veterans  Affairs                                                                    
(DMVA)  budget. The  DNR budget  included  $2.4 million  for                                                                    
construction  of  new  public  use cabins,  $2  million  for                                                                    
sanitation  upgrades to  parks (i.e.,  providing for  newer,                                                                    
cleaner bathrooms  and sanitation  systems), and  $2 million                                                                    
for bison range restoration to  clean up and clear out space                                                                    
for  a  heard  of  bison   to  work  towards  food  security                                                                    
initiatives  looking to  provide  for feed  stock for  other                                                                    
farmers.                                                                                                                        
                                                                                                                                
Mr. Steininger moved  to slide 9 and continued  to review FY                                                                    
24  capital budget  highlights beginning  with a  handful of                                                                    
increments for the Department of  Public Safety (DPS). There                                                                    
were  numerous  projects  throughout  DPS  to  maintain  and                                                                    
upgrade  some  of  the facilities.  There  was  funding  for                                                                    
training  academy  maintenance  and updates;  classroom  and                                                                    
offices in the DPS Bethel  hangar; forensic equipment in the                                                                    
State  Crime  Lab;  Fairbanks  Post  remodel  and  expansion                                                                    
including  the  evidence,  storage,  and  impound  lot;  and                                                                    
Criminal  Justice  Information System  modernization.  Under                                                                    
the Department of  Revenue (DOR) there was  an increment for                                                                    
the   Alaska  Housing   Finance  Corporation   (AHFC)  Rural                                                                    
Professional  Housing   Program.  He  elaborated   that  the                                                                    
program    had   previously    been   limited    to   health                                                                    
professionals,  teachers,  and public  safety  professionals                                                                    
and  had been  funded at  the $1.75  million level  from the                                                                    
AHFC  dividend. The  increment added  another $3.25  million                                                                    
UGF  and  had   expanded  it  to  cover   all  rural  public                                                                    
professionals.                                                                                                                  
                                                                                                                                
2:33:24 PM                                                                                                                    
                                                                                                                                
Mr. Steininger  turned to slide  10 and continued  to review                                                                    
FY  24 capital  highlights for  the departments.  The budget                                                                    
included $1.7  million for Alaska  Land Mobile  Radio System                                                                    
(ALMR)  in-vehicle radio  replacements under  the Department                                                                    
of Transportation  and Public  Facilities (DOT).  The amount                                                                    
reflected approximately  one-third of the cost  of replacing                                                                    
all vehicle  radios. The  replacement was  necessary because                                                                    
ALMR  was moving  to a  more modern  technology; the  system                                                                    
could not switch  to the modern technology until  all of the                                                                    
radios  were compatible.  The DOT  budget  also included  $2                                                                    
million for  Dalton Highway  delineators. He  explained that                                                                    
delineators are reflectors on the  side of the road. Federal                                                                    
code  required the  delineators to  be white  in color,  but                                                                    
during a  snowstorm on the  Dalton Highway  white reflectors                                                                    
were  challenging for  truck drivers  to see.  The increment                                                                    
was funded with state funds  because the new reflectors were                                                                    
not covered by the federal program.                                                                                             
                                                                                                                                
Mr. Steininger  reviewed two  increments for  the University                                                                    
of Alaska on slide 10. The  budget included $2 million for a                                                                    
capital   buildout  for   a  Washington,   Wyoming,  Alaska,                                                                    
Montana, and  Idaho (WWAMI)  Program health  facility, which                                                                    
helped add ten additional seats in the program.                                                                                 
                                                                                                                                
Co-Chair  Johnson asked  about the  reflectors for  DOT. She                                                                    
asked it meant  there would be white  reflectors in addition                                                                    
to reflectors  in another color.  She wondered if  the state                                                                    
would  be taking  over the  installation and  maintenance of                                                                    
the reflectors in general.                                                                                                      
                                                                                                                                
Mr. Steininger  deferred the question  to DOT [there  was no                                                                    
one from DOT available online].                                                                                                 
                                                                                                                                
2:35:22 PM                                                                                                                    
                                                                                                                                
Mr. Steininger would follow up with the information.                                                                            
                                                                                                                                
Co-Chair Johnson  would like to  know more about  the issue.                                                                    
She suggested  adding the new  color to the  white reflector                                                                    
in order to  prevent the state from bearing  the entire cost                                                                    
of the project.                                                                                                                 
                                                                                                                                
Representative  Hannan remarked  there were  other areas  in                                                                    
Alaska that would have the same  snow issue as on the Dalton                                                                    
Highway. She asked for follow up.                                                                                               
                                                                                                                                
Mr. Steininger  continued to  review capital  highlights for                                                                    
the University on slide 10.  The budget included $10 million                                                                    
for  the  drone  program.  He  stated  the  funding  was  in                                                                    
addition  to  $10  million  provided   to  the  program  the                                                                    
previous year.                                                                                                                  
                                                                                                                                
Representative Galvin  looked at the WWAMI  Program shown on                                                                    
slide 10.  She stated her understanding  the increment would                                                                    
allow space for 10 additional  positions. She noted the item                                                                    
was identified  as phase 2. She  asked if it was  phase 2 of                                                                    
2.                                                                                                                              
                                                                                                                                
Mr. Steininger  replied that  he would  follow up.  The item                                                                    
allowed for the addition of 10 new seats.                                                                                       
                                                                                                                                
2:37:48 PM                                                                                                                    
                                                                                                                                
Mr. Steininger  highlighted increments for the  Judiciary at                                                                    
the bottom  of slide  10. The  budget included  $2.4 million                                                                    
item   for  justice   technology   upgrades  and   courtroom                                                                    
modernization, in addition to  $3 million for court security                                                                    
projects.                                                                                                                       
                                                                                                                                
Representative Josephson speculated  that the administration                                                                    
could  ask  for  and  receive  more in  the  area  of  rural                                                                    
housing.   He  did   not  see   funding  for   school  major                                                                    
maintenance/construction and deferred  maintenance listed in                                                                    
the presentation.  He noted the  legislature had  been eager                                                                    
to  do work  on school  major maintenance.  He surmised  the                                                                    
governor had  been less eager  because he had vetoed  a fair                                                                    
amount  of the  funding. He  asked for  the administration's                                                                    
position on the items.                                                                                                          
                                                                                                                                
Mr. Steininger  answered that  it was  not reflected  on the                                                                    
slides, but  the budget included  some funding  for deferred                                                                    
maintenance on state facilities  including the Office of the                                                                    
Governor,  in  coordination with  DOT.  The  budget did  not                                                                    
include funding  for school major maintenance.  He explained                                                                    
that in  light of facing  a multiple hundred  million dollar                                                                    
deficit, it had not been included.                                                                                              
                                                                                                                                
Representative  Galvin  asked  if the  deferred  maintenance                                                                    
funding in the DOT budget included K-12 and the University.                                                                     
                                                                                                                                
Mr.  Steininger answered  the funding  was  for state  owned                                                                    
facilities.  He stated  the University  was included  in the                                                                    
distribution  in  most years.  He  elaborated  that in  some                                                                    
years  the University  had received  a direct  appropriation                                                                    
for  a  specific   project  or  a  more   general  need.  If                                                                    
appropriated as had been  proposed, the administration would                                                                    
likely  distribute   a  portion   of  the  funding   to  the                                                                    
University for its highest priority projects.                                                                                   
                                                                                                                                
2:40:34 PM                                                                                                                    
                                                                                                                                
Co-Chair  Edgmon  looked  at a  chart  showing  capital  UGF                                                                    
unobligated appropriations on  slide 5. He asked  if some of                                                                    
it pertained to deferred maintenance.                                                                                           
                                                                                                                                
Mr.  Steininger  assumed there  was  some.  He relayed  that                                                                    
appropriations  for statewide  deferred maintenance  through                                                                    
the Office of  the Governor were classified as  DGF and were                                                                    
not reflected  in the slide. There  was a bit left  that had                                                                    
not  been  distributed to  projects  and  some projects  had                                                                    
received  funding  but  had  not  been  completed.  A  small                                                                    
portion was  generally withheld in  case some  projects went                                                                    
over  budget. The  unobligated balances  would be  two years                                                                    
old, not five to ten years old.                                                                                                 
                                                                                                                                
Co-Chair   Edgmon  stated   that  the   previous  year   the                                                                    
legislature  passed  $100   million  in  statewide  deferred                                                                    
maintenance,   $100    million   in    school   construction                                                                    
maintenance, and  $50 million in University  maintenance. He                                                                    
explained  that  the  governor  had  pared  the  funds  back                                                                    
considerably.  He  believed  the statewide  maintenance  had                                                                    
been reduced to around $27 million.                                                                                             
                                                                                                                                
2:42:17 PM                                                                                                                    
                                                                                                                                
Mr. Steininger turned to slide  12 showing a snapshot of the                                                                    
capital  budget  split  out   by  agency.  He  relayed  that                                                                    
agencies with a  larger number of facilities  tended to have                                                                    
more   funding   in   the  capital   budget.   Additionally,                                                                    
departments with larger federal  match programs like DOT and                                                                    
DEC accounted for the bulk of the capital budget.                                                                               
                                                                                                                                
Representative Stapp  asked for  the current  total deferred                                                                    
maintenance liability for all state facilities.                                                                                 
                                                                                                                                
Mr. Steininger believed the figure  was around $700 million.                                                                    
He would follow up with the precise number.                                                                                     
                                                                                                                                
Mr. Steininger turned  to a table showing the  FY 24 capital                                                                    
budget  broken   out  by  House   district.  He   noted  the                                                                    
information  was based  on legacy  House districts,  not the                                                                    
new district  after redistricting. He pointed  to the bottom                                                                    
row showing  statewide districts and explained  that some of                                                                    
the  funding would  be distributed  across districts  once a                                                                    
determination  had been  made about  how  the DOT  Statewide                                                                    
Transportation   Improvement   Program   (STIP)   would   be                                                                    
distributed.  The slide  showed  a preliminary  view of  the                                                                    
distribution.                                                                                                                   
                                                                                                                                
2:44:28 PM                                                                                                                    
                                                                                                                                
Mr. Steininger turned  to a 10-year lookback  of the capital                                                                    
budget on slide  14. The slide showed a time  period from FY                                                                    
16 to FY  21 where UGF capital budgets (shown  in dark blue)                                                                    
were fairly constrained due to lack of revenue.                                                                                 
                                                                                                                                
Co-Chair Foster  looked at slide  9 and a DOR  increment for                                                                    
AHFC rural  professional housing.  He asked  if it  was also                                                                    
referred to as the teacher health  aide in DPS. He asked Mr.                                                                    
Steininger  to  elaborate on  the  project.  He thought  the                                                                    
Office of Children's Services (OCS) may have been included.                                                                     
                                                                                                                                
Mr. Steininger  confirmed it  was traditionally  the teacher                                                                    
health  professional public  safety  housing. The  expansion                                                                    
came  back  to  the   recruitment  and  retention  of  state                                                                    
employees.   He  elaborated   that  one   of  the   greatest                                                                    
impediments  to  recruitment and  retention  was  a lack  in                                                                    
available housing  for any agency  with a presence  in rural                                                                    
Alaska.  He listed  OCS, DFG,  and  DNR as  examples with  a                                                                    
large  presence  in  rural Alaska.  He  explained  that  the                                                                    
agencies had  not been covered  under the  previous program.                                                                    
He  elaborated  that  when  determining  how  to  solve  the                                                                    
problem,  expanding  an  existing program  made  sense.  The                                                                    
administration  was working  with AHFC  to determine  if the                                                                    
existing  grant  program  rules   made  sense  for  the  new                                                                    
structure. The  administration was looking to  expand beyond                                                                    
the traditional group, but it wanted to ensure the original                                                                     
users such as DPS and nursing were not crowded out as the                                                                       
scope was expanded.                                                                                                             
                                                                                                                                
2:47:10 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster thought it sounded like the program would                                                                       
be expanding to include professionals working for the State                                                                     
of Alaska in rural Alaska.                                                                                                      
                                                                                                                                
Co-Chair Edgmon reviewed the schedule for the following                                                                         
day.                                                                                                                            
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
2:48:05 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 2:48 p.m.                                                                                          

Document Name Date/Time Subjects
FY2024 Capital Project Review Listing 1160 - HB 40.pdf HFIN 1/30/2023 1:30:00 PM
HB 40
OMB - HFIN Capital Budget Overview
23.01.30 OMB Capital Budget Overview HFIN.pdf HFIN 1/30/2023 1:30:00 PM
HB 40
ADF&G Response to HFIN Capital Budget Overview on 1.30.23.pdf HFIN 1/30/2023 1:30:00 PM
HB 40
OMB 1.30.23 HFIN Capital Responses.pdf HFIN 1/30/2023 1:30:00 PM
HB 40
HFIN 1/30/23 Response
OMB Response Attachment 1 - 2022 Fed Issues Update Final.pdf HFIN 1/30/2023 1:30:00 PM
HB 40
OMB Response HFIN 1.30.23 HB 40
OMB Response Attachment 2 - Multi Year Appropriation Plan - Current Litigation 1.26.23 followup for SFIN.pdf HFIN 1/30/2023 1:30:00 PM
HB 40
OMB Response HFIN 1.30.23
OMB Response Attachment 3 - Unassigned Repayment of CBRF - Audited 03-04-22.pdf HFIN 1/30/2023 1:30:00 PM
HB 40
Response to HFIN 1.30.23
OMB Response Attachment 4 - Dalton_Delineator HB 40 (002).pdf HFIN 1/30/2023 1:30:00 PM
Response HFIN 1.30.23
OMB Response Attachment 5 - casr_Capital_Appropriation_Status_Export_1-24-23 Deferred Maintenance Only.xlsx HFIN 1/30/2023 1:30:00 PM
HB 40
Response to HFIN 1.30.23
OMB Response Attachment 5 - Part 1 casr_Capital_Appropriation_Status_Export_1-24-23 Deferred Maintenance Only.pdf HFIN 1/30/2023 1:30:00 PM
HB 40
Response to HFIN 01.30.23