Legislature(2015 - 2016)BILL RAY CENTER 230
05/12/2016 10:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB138 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 138 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
May 12, 2016
10:04 a.m.
10:04:54 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 10:04 a.m.
MEMBERS PRESENT
Senator Anna MacKinnon, Co-Chair
Senator Peter Micciche, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Donny Olson
MEMBERS ABSENT
Senator Pete Kelly, Co-Chair
Senator Lyman Hoffman
ALSO PRESENT
Pat Pitney, Director, Office of Management and Budget,
Office of the Governor; Mike Vigue, Director, Program
Development, Department of Transportation and Public
Facilities.
SUMMARY
SB 138 BUDGET: CAPITAL
CSSB 138(FIN) was REPORTED out of committee with
a "do pass" recommendation.
SENATE BILL NO. 138
"An Act making appropriations, including capital
appropriations, reappropriations, and other
appropriations; making appropriations to capitalize
funds; and providing for an effective date."
10:05:36 AM
Co-Chair MacKinnon commented that the committee would hear
two amendments for consideration.
Senator Olson MOVED to ADOPT Amendment 1:
OFFERED IN THE SENATE
TO: CSSB 138(FIN), Draft Version "P"
Page 3, line 22:
Delete "17,997,268" in both places.
Insert "25,235,690" in both places.
Page 3, following line 25:
Insert new material to read:
"ALLOCATIONS
Kivalina K-12 7,238,422
Replacement School -
Kasayulie (HD 40)"
Adjust fund sources and totals accordingly.
Co-Chair MacKinnon OBJECTED for discussion.
Senator Olson presented Amendment 1, on behalf of one of
the educational institutions in his district. He commented
on the three branches of government. The amendment
contained what he referred to as a court-ordered capital
item. He referred to the Kasayulie vs. State of Alaska
lawsuit [filed by a couple from Akiachak who claimed the
state's method of financing school construction
discriminated against rural students]; and specified that
although the legislature was not part of the lawsuit, it
was the appropriating body for the state. He emphasized
that if the situation was not remedied, over time the issue
of a school for Kivalina would become increasingly
expensive and difficult to address. He plead with the
committee to pass the amendment and address the issue.
10:07:40 AM
Senator Bishop asked about the timeline for the school site
selection.
Senator Olson thought that there had not been a finalized
site selected for the Kivalina School. He thought if the
amendment was passed, the committee could put in provisions
with safeguards for the state in the case that the school
was not built.
Vice-Chair Micciche stated that the previous year he had
been uncomfortable with the amount that the committee had
appropriated for the school, but in recognition of the
lawsuit he was convinced at the course of action taken. He
thought adding more funds without a final plan made him
less comfortable in light of the $4.1 billion budget
deficit. He was more comfortable waiting to see a final
plan before moving forward with additional funding.
10:08:59 AM
Co-Chair MacKinnon spoke in opposition to Amendment 1. She
recounted working diligently with Senator Olson the
previous year to provide $43,337,400 for the Kivalina
school project; an amount which she considered to have
extinguished the lawsuit requirements. She furthered that
the committee could have approached the funding with small
allocations of $5 million at a time until there was
sufficient funds. She considered that without a plan, there
was already enough funding that was pigeon-holed for the
project. She revealed that the project began as a
renovation project; and the community and the state
together had decided that erosion was happening in the area
and the administration of former Governor Sean Parnell had
entered into a replacement project, which she believed
increased the state's liability. She added that some in the
legislature did not believe it had increased the state's
liability, but felt that the state should be looking at a
replacement school. She emphasized that for the previous 10
years of arguing over the issue, the children of Kivalina
had been in conditions that they should not be. She thought
that any future legislature could add funding to the amount
available once a plan was in place. Until that time, she
did not think it was prudent to allocate additional funds
to the project.
10:10:46 AM
Senator Olson clarified that there had been a site selected
for the school, and there was need for an environmental
impact statement (EIS) in order to get the funding for the
road to the school.
Co-Chair MacKinnon MAINTAINED her OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Olson
OPPOSED: Bishop, Dunleavy, Micciche, MacKinnon
The MOTION FAILED (4/1).
10:11:50 AM
Co-Chair MacKinnon MOVED to ADOPT Amendment 2:
OFFERED IN THE SENATE
BY SENATOR MACKINNON
TO: CSSB 138(FIN), Draft Version "P"
Page 33, before line 1:
Insert a new bill section to read:
"* Sec. 10.
LEGISLATIVE INTENT RELATING TO FUNDING FOR KIVALINA
SCHOOL. The legislature intends that the amount
appropriated by sec. 1, ch. 38, SLA 2015, page 3,
lines 23 - 26, for construction of a Kivalina K-12
replacement school satisfies the state's obligation
under the consent decree entered into in Kasayulie v.
State, 3AN-97-3782 CIV (Sept. 1, 1999). No funding for
the construction or renovation of a Kivalina K-12
school is appropriated in this Act. It is the intent
of the legislature that the Northwest Arctic Borough
School District expedite the completion of a plan to
replace the existing Kivalina K-12 school to allow for
the construction of adequate school facilities for the
students of Kivalina."
Renumber the following bill sections accordingly.
Page 49, lines 17 - 18:
Delete "secs. 13(2), 14, 16(b), 17, 19, 21, 23,
24, 25(d), 25(e), and 28"
Insert "secs. 14(2), 15, 17(b), 18, 20, 22, 24,
25, 26(d), 26(e), and 29"
Page 49, line 19:
Delete "secs. 13(1), 25(a) - (c), 29, and 30"
Insert "secs. 14(1), 26(a) - (c), 30, and 31"
Page 49, line 23:
Delete "Section 11"
Insert "Section 12"
Page 49, lines 24 - 25:
Delete "secs. 15, 16(b), 17(a), 19, 20, 22, 23,
24(a), 24(b), 24(c), 25(a), 25(d), 25(e), and 26
- 29"
Insert "secs. 16, 17(b), 18(a), 20, 21, 23, 24,
25(a), 25(b), 25(c), 26(a), 26(d), 26(e), and 27
- 30"
Page 49, lines 25 - 26:
Delete "secs. 15, 16(b), 17(a), 19, 20, 22, 23,
24(a), 24(b), 24(c), 25(a), 25(d), 25(e), and 26
- 29"
Insert "secs. 16, 17(b), 18(a), 20, 21, 23, 24,
25(a), 25(b), 25(c), 26(a), 26(d), 26(e), and 27
- 30"
Page 49, line 27:
Delete "sec. 17(b)"
Insert "sec. 18(b)"
Page 49, line 31:
Delete "sec. 21"
Insert "sec. 22"
Page 50, line 3:
Delete "sec. 24(d)"
Insert "sec. 25(d)"
Page 50, line 6:
Delete "10, 11, and 32"
Insert "11, 12, and 33"
Page 50, lines 8 - 9:
Delete "Sections 15, 16(b), 17(a), 19, 20,
22, 23, 24(a), 24(b), 24(c), 25(a), 25(d), 25(e),
and 26 - 29"
Insert "Sections 16, 17(b), 18(a), 20, 21, 23,
24, 25(a), 25(b), 25(c), 26(a), 26(d), 26(e), and
27 - 30"
Page 50, line 10:
Delete "secs. 34 and 35"
Insert "secs. 35 and 36"
Senator Dunleavy OBJECTED for discussion.
Co-Chair MacKinnon commented that she offered the amendment
in respect for the children of Kivalina, and for Senator
Olson. She thought the children of Kivalina had been
disadvantaged for many years, and stated that the
legislature had appropriated a substantial sum of money
that resolved the lawsuit regarding the school. She
furthered that the prior appropriations did not resolve the
state's obligation to the children. She pondered that any
future legislature could act independently (of the current
actions). She clarified that the amendment restated that
the state had complied with the court order, and met the
obligations to the lawsuit.
10:12:56 AM
AT EASE
10:16:12 AM
RECONVENED
Co-Chair MacKinnon noted that Senator Dunleavy had objected
to Amendment 2.
Senator Olson thought the amendment declared that the state
had satisfied its obligation to the consent decree, and he
wholeheartedly disagreed.
Senator Dunleavy WITHDREW his OBJECTION.
Senator Olson OBJECTED to Amendment 2.
Co-Chair MacKinnon read from the language portion of
Amendment 2 [see above].
10:17:59 AM
Senator Olson asked if it was possible to have the
administration comment on the amendment.
PAT PITNEY, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, spoke to Amendment 2, stating that
the administration believed that an additional $7 million
towards the school construction, above what had already
been appropriated, was necessary to meet the commitment of
the settlement.
Co-Chair MacKinnon asked about the $43 million the
legislature had appropriated the previous year, and where
it resided.
Ms. Pitney informed that the funds were in the general fund
(GF) until the project would start.
Co-Chair MacKinnon asked if there was a plan for the school
construction project.
Ms. Pitney believed there was a plan, but not sufficient
funding to start the project.
10:19:44 AM
Co-Chair MacKinnon asked if there was a plan for a design
for the school.
Ms. Pitney thought that there was a site concept for the
school construction, and the district was waiting for the
necessary funding as well as a community agreement.
Co-Chair MacKinnon wondered if the school was being
designed to conform to the amount of funding, or whether a
funding amount would be requested to fully fund a specific
design.
Ms. Pitney thought there were two separate issues: the
legal issue, and the school construction issue. She thought
the funding request that the administration made satisfied
the legal settlement issue.
Co-Chair MacKinnon asked if Ms. Pitney had read the
settlement decree.
Ms. Pitney had not read the decree in its entirety, but had
consulted with the Department of Law (DOL) and read its
briefs on the matter.
Co-Chair MacKinnon asked if Ms. Pitney had been told via
the briefs or the decree that the legislature could
allocate money on multiple occasions versus one occasion.
Ms. Pitney stated that it was very possible to allocate
money on multiple occasions, and the settlement required
additional funds (based on DOL's analysis). The
administration had put forward the appropriation to meet
the requirement.
Co-Chair MacKinnon posited that the decree stipulated that
the legislature was required to use the number that the
Department of Education and Early Development had on the
books ($43,237,400), which was the amount that the
legislature had appropriated.
Ms. Pitney did not have the materials in her possession to
confirm Co-Chair MacKinnon's statement.
10:22:06 AM
Vice-Chair Micciche reported that there had been a specific
funding amount that had convinced him to support the
appropriation the previous year. He echoed Ms. Pitney's
assertion that there were two distinct issues. Considering
the fiscal challenges in the current year, he was
comfortable waiting for further development of a plan. He
qualified that if he saw a plan to deliver equitable
education services to the students of Kivalina he would be
more likely to support additional expenditures. He
mentioned that he considered the funding to be sequestered.
Co-Chair MacKinnon thought that it might require a
representative from DOL to argue Senator Olson's position
on the amendment. She understood that the parties involved
in the lawsuit had until July 1, 2015 to reopen the lawsuit
if the allocation did not satisfy the consent decree. She
emphasized to Senator Olson that she wanted to make sure
that all Alaskans were treated fairly, and reiterated that
she had worked closely with him the previous year. She
stated that funds had been set aside, and restated that
future legislatures could do what they believed was in the
best interest of the school.
Senator Olson asked what kind of difficulties Ms. Pitney
anticipated considering the lack of the additional $7
million. He asked her to consider the diminishing amount of
money in the Constitutional Budget Reserve and increasingly
severe budget crisis.
Ms. Pitney believed (specific to the $7 million) that the
highest risk the state faced was a lawsuit and a reopening
of all of the rural school funding inequality issues.
Senator Olson thought the lawyers and the lobbyists would
be the only winners in the situation if it was not
resolved.
10:25:18 AM
Vice-Chair Micciche recalled that the higher settlement
amount was a choice by the state, and thought that the
actual settlement number was much lower.
Senator Dunleavy thought the Kivalina school was a
complicated issue, and mentioned site selection and island
erosion. He recounted that the original approach to the
issue was to renovate the existing building for
approximately $17 million. He stated that there had been
extensive research and discussion on the matter the
previous year, and remembered language in the lawsuit
suggesting that the state would not need to fund beyond $17
million to settle the lawsuit. He discussed access to the
school construction site and was unsure if the design had
been completed. He thought the state had time to do the
right thing for Kivalina. He discussed the propensity for
burgeoning costs on projects such as the Kivalina school,
and thought people would be coming back to the state
requesting additional funds to complete the project.
Vice-Chair Micciche thought the legislature may have put
itself in a position of having an open door to spending on
the school by moving beyond the original settlement. He
wondered whether DOL would share its evaluation of the case
and how they arrived at the amount of $50 million to settle
the case.
Senator Bishop did not see an avenue for another lawsuit.
He wondered if $7 million in additional funding was an
accurate number, and did not think the funding had to be
completed immediately. He was fully in support of doing
what was right for Kivalina, after seeing a finalized plan.
He mentioned the open and active EIS, and cautioned that
there would be wetlands disturbance with unknown costs for
mitigation.
10:28:37 AM
Senator Olson mentioned satisfying the consent decree,
after which it would be a legislative issue.
Co-Chair MacKinnon commented that anyone could bring a
lawsuit against the state, and pointed out that the lawsuit
had expired. She recounted that the state had met its
obligation, and could have provided incremental funding to
satisfy the lawsuit.
Senator Olson MAINTAINED his OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Bishop, Dunleavy, Micciche, MacKinnon
OPPOSED: Olson
The MOTION PASSED (4/1). Amendment 2 was ADOPTED.
10:30:06 AM
Co-Chair MacKinnon highlighted a request for $7 million for
airport erosion on page 10, line 7 of the bill. She asked a
department representative to speak to the committee about
why it should include $7 million for an airport if they
were considering relocating a school.
MIKE VIGUE, DIRECTOR, PROGRAM DEVELOPMENT, DEPARTMENT OF
TRANSPORTATION AND PUBLIC FACILITIES, relayed that the
airport erosion control project was intended to provide
permanent repairs for what happened in a 2005 West Coast
storm. He furthered that whenever there was a storm in that
area of the state, there were erosion problems at the
airport runway. The project was listed in the Airport
Improvement Program (AIP) for 2017 for $7 million in
federal authority to accept and spend Federal Aviation
Administration (FAA) funds.
Co-Chair MacKinnon asked Mr. Vigue to discuss safety
standards, and how it might affect Kivalina transportation
if the funds were not appropriated.
Mr. Vigue did not feel it was his area of expertise to
discuss runway safety issues. He stated that the
information would need to come from one of the aviation
professionals in the department.
Co-Chair MacKinnon asked if Senator Olson would like to
defend the $7 million request for Kivalina's airport.
Senator Olson asked Mr. Vigue what kind of additional
federal funds would be in jeopardy if the $7 million
request was withdrawn from the capital budget.
Mr. Vigue stated that the funding was listed in the current
plan approved by the FAA, and it was FAA funding that would
be coming to the project. If the project did not move
forward, the $7 million would be used by another airport
project in the state. He furthered that the funds were
specific to FAA grants.
Senator Olson asked if there was a specific amount of
federal funding that would be jeopardized if the $7 million
was not included in the capital budget.
Mr. Vigue stated that the state would not lose $7 million;
rather, the FAA funds would go to another project listed in
the AIP.
Senator Olson asked if there was a way that the monies
could be used to fund the request that had been in
Amendment 1 offered earlier in the meeting.
Mr. Vigue stated that what Senator Olson suggested was not
possible, as the funds were FAA funds and had to be used on
airport improvement projects.
Senator Olson asked if the terms of use (for the FAA funds)
included roads to the airport.
Mr. Vigue stated that roads that went to the airport were
an eligible expense, as long as the road was part of a
grant approved by FAA.
10:34:31 AM
Senator Olson commented that having been to Northwest
Alaska the previous day, he had observed that the ground
was frozen and there was no significant erosion able to
occur until storm season. He understood that the state
airport in Kivalina was compromised by not having the
proper size runway for commercial air taxi operators, which
were the only link out of Kivalina when travel across the
water by snow machine was restricted by weather. He
mentioned the reliance upon helicopters as the only means
of transport. He wondered if what he had described was a
valid concern.
Mr. Vigue believed Senator Olson described a valid concern,
but reiterated that he did not have expertise in runway
safety. He thought the fact that the FAA had approved the
grant and the fact that the road was included in the AIP
indicated that the road work was for permanent erosion
control measures, and assumed it was important.
Senator Olson asked if Mr. Vigue was aware of any accidents
that had happened in the recent past in Kivalina because of
the inadequacy of the airport.
Mr. Vigue answered in the negative.
Senator Olson referred to an aircraft that had been caught
in a strong crosswind and had lain next to the airport for
multiple years.
10:36:38 AM
Senator Dunleavy asked for confirmation that the $7 million
was all federal funds.
Mr. Vigue answered in the affirmative.
Senator Dunleavy thought the issue was moot, since the
funds were not UGF, but rather federal receipts.
Co-Chair MacKinnon noted that the entire village of
Kivalina benefitted from the airport for moving
transportation goods in and out of the area in a safe
manner. She commented that the state did not have a village
relocation happening, however there was a relevant
conversation around the school site selection. She thought
that it was a valid conversation for the consideration of
the committee, but clarified that the $7 million being
discussed was allowing DOT to allocate safety funds to
airport runways that were not complying with federal
aviation guidelines. She acknowledged that Senator Olson
was a pilot.
Senator Olson commented that when operating as an air taxi
operator, the airport concerns were valid. He mentioned
insurance concerns and the seriousness of accidents.
Senator Bishop thought he may have misunderstood, but
wondered if (hypothetically) AIP funds could be used to
connect a road to the airport from the school in the
future.
Mr. Vigue clarified that FAA funds were eligible for roads
that provide access to the airport.
10:39:06 AM
Vice-Chair Micciche moved to repot CSSB 138(FIN) out of
committee as amended and with necessary technical and
conforming changes.
CSSB 138(FIN) was REPORTED out of committee with a "do
pass" recommendation.
10:40:03 AM
AT EASE
10:41:16 AM
RECONVENED
ADJOURNMENT
10:41:27 AM
The meeting was adjourned at 10:41 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 138 Version P Amendment P 1.pdf |
SFIN 5/12/2016 10:00:00 AM |
SB 138 |
| SB 138 version P Amendment P 2 MacKinnon.pdf |
SFIN 5/12/2016 10:00:00 AM |
SB 138 |