Legislature(2009 - 2010)SENATE FINANCE 532

04/14/2009 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 171 PERMANENT FUND DIVIDEND FOR DECEASED TELECONFERENCED
Moved CSSB 171(STA) Out of Committee
+= SB 177 NO REPEAL OF SPORT FISH GUIDE LICENSING TELECONFERENCED
Moved CSSB 177(FIN) Out of Committee
+ HCR 2 IN-STATE GAS PIPELINE TELECONFERENCED
Moved SCS CSHCR 2(RES) Out of Committee
+ HB 199 APPROPS: NON-TRANSPORTATION STIMULUS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  SENATE FINANCE COMMITTEE                                                                                      
                       April 14, 2009                                                                                           
                         9:15 a.m.                                                                                              
                                                                                                                                
9:15:51 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stedman called the Senate  Finance Committee meeting                                                                   
to order at 9:15 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Charlie Huggins, Vice-Chair                                                                                             
Senator Johnny Ellis                                                                                                            
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Senator  Kevin  Meyer, Sponsor;  Representative  Jay  Ramras,                                                                   
Sponsor;  Paul  Fuhs, Legislative  Director,  Alaska  Gasline                                                                   
Port  Authority (AGPA);  Karen Rehfeld,  Director, Office  of                                                                   
Management  and   Budget,  Office  of  the   Governor;  Larry                                                                   
Persily,  Staff, Representative  Mike  Hawker, House  Finance                                                                   
Committee Co-Chair.                                                                                                             
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Steven Cunningham, City Clerk, City of Houston, Alaska.                                                                         
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 171    "An Act relating to  the permanent fund dividend of                                                                   
          an otherwise qualified individual who dies during                                                                     
          the qualifying year; and providing for an                                                                             
          effective date."                                                                                                      
                                                                                                                                
          CS SB 171(FIN) was REPORTED out of Committee with                                                                     
          a "do pass" recommendation and with attached new                                                                      
          fiscal note 1 by the Department of Revenue.                                                                           
                                                                                                                                
SB 177    "An Act repealing the  termination of licensing and                                                                   
          regulation  of sport  fishing  operators and  sport                                                                   
          fishing  guides and  licensing and registration  of                                                                   
          sport  fishing   vessels;  and  providing   for  an                                                                   
          effective date."                                                                                                      
                                                                                                                                
          CS SB 177(FIN) was REPORTED out of Committee with                                                                     
          a  "do  pass"  recommendation   and  with  attached                                                                   
          fiscal note 1 by the Department of Fish and Game.                                                                     
                                                                                                                                
CS HCR 2(RES) am                                                                                                                
          Requesting the governor  to provide energy security                                                                   
          for all  Alaskans first by pursuing  development of                                                                   
          a natural gas bullet  pipeline from the North Slope                                                                   
          to  the  Cook  Inlet  region;  and  requesting  the                                                                   
          governor   to   identify    and   negotiate   where                                                                   
          appropriate  with one  or more  persons capable  of                                                                   
          producing  natural  gas from  the  Gubik area,  and                                                                   
          other  areas on  the North  Slope if necessary,  in                                                                   
          sufficient  quantities to support the  energy needs                                                                   
          of Alaskans and a bullet pipeline project.                                                                            
                                                                                                                                
          SCS CS HCR 2(RES) was REPORTED out of Committee                                                                       
          with no recommendation and no fiscal note.                                                                            
                                                                                                                                
CS HB 199(FIN) am                                                                                                               
          "An    Act   making    appropriations,    including                                                                   
          supplemental     appropriations     and     capital                                                                   
          appropriations;   amending    appropriations;   and                                                                   
          providing for an effective date."                                                                                     
                                                                                                                                
          CS HB 199(FIN)am was HEARD and HELD in Committee                                                                      
          for further consideration.                                                                                            
                                                                                                                                
                                                                                                                                
SENATE BILL NO. 171                                                                                                           
                                                                                                                                
     "An Act relating to the permanent fund dividend of an                                                                      
     otherwise qualified individual who dies during the                                                                         
     qualifying year; and providing for an effective date."                                                                     
                                                                                                                                
9:17:22 AM                                                                                                                    
                                                                                                                                
SENATOR KEVIN MEYER, SPONSOR,  explained that the legislation                                                                   
provides for the issuance of a  permanent fund dividend check                                                                   
to  an eligible  individual who  dies  during the  qualifying                                                                   
year. The estate of a person who  was alive for more than 180                                                                   
days  during the  year  would  be allowed  to  apply for  and                                                                   
receive the  dividend, which current  law does not  allow. He                                                                   
spoke of the experience of constituents.                                                                                        
                                                                                                                                
Co-Chair  Stedman asked  the  effective  date. Senator  Meyer                                                                   
replied  January   2010.  Co-Chair  Stedman   clarified  that                                                                   
persons who died  after July 2009 would qualify.  He referred                                                                   
to an experience with a death in his family.                                                                                    
                                                                                                                                
Co-Chair  Stedman  pointed  out  that  the  fiscal  note  was                                                                   
reduced by $572,000 interagency receipts.                                                                                       
                                                                                                                                
Co-Chair  Hoffman  MOVED to  report  CS  SB 171(FIN)  out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  note. There  being NO OBJECTION,  it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS  SB 171(FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass" recommendation  and with attached new fiscal  note 1 by                                                                   
the Department of Revenue.                                                                                                      
                                                                                                                                
                                                                                                                                
SENATE BILL NO. 177                                                                                                           
                                                                                                                                
     "An  Act  repealing  the termination  of  licensing  and                                                                   
     regulation of sport fishing  operators and sport fishing                                                                   
     guides and  licensing and registration of  sport fishing                                                                   
     vessels; and providing for an effective date."                                                                             
                                                                                                                                
9:20:24 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman gave a brief  history of the legislation and                                                                   
referred to  the fiscal  note by the  Department of  Fish and                                                                   
Game  for  $462,000.  He  pointed out  that  the  funding  is                                                                   
already in the FY10 budget.                                                                                                     
                                                                                                                                
SENATOR KEVIN MEYER, SPONSOR,  explained that the legislation                                                                   
would continue  a good program  that would otherwise  sunset.                                                                   
He defined the  legislation as a program that  would maintain                                                                   
the professional  standards of  various sport fishing  guides                                                                   
in Alaska.  He explained  that the  CS previously adopted  by                                                                   
the committee  allows a guide who  dies or is injured  in the                                                                   
middle of the season to be replaced  with another guide prior                                                                   
to  receiving,  with the  understanding  that  the new  guide                                                                   
would obtain the training as soon as the season is over.                                                                        
                                                                                                                                
Co-Chair Stedman  referred to the bill as a  waiver provision                                                                   
and noted that training classes are offered once each year.                                                                     
                                                                                                                                
Co-Chair  Hoffman  MOVED to  report  CS  SB 177(FIN)  out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  note. There  being NO OBJECTION,  it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CS  SB 177(FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass" recommendation  and with attached fiscal note  1 by the                                                                   
Department of Fish and Game.                                                                                                    
                                                                                                                                
                                                                                                                                
CS FOR HOUSE CONCURRENT RESOLUTION NO. 2(RES) am                                                                              
                                                                                                                                
     Requesting the governor to provide energy security for                                                                     
     all Alaskans first by pursuing development of a natural                                                                    
     gas bullet  pipeline from  the North  Slope to  the Cook                                                                   
     Inlet region;  and requesting  the governor  to identify                                                                   
     and  negotiate  where  appropriate   with  one  or  more                                                                   
     persons capable of producing  natural gas from the Gubik                                                                   
     area, and other  areas on the North Slope  if necessary,                                                                   
     in sufficient quantities  to support the energy needs of                                                                   
     Alaskans and a bullet pipeline project.                                                                                    
                                                                                                                                
9:23:17 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JAY  RAMRAS, SPONSOR, provided an  overview of                                                                   
the  history  of  the  legislation,  which  started  as  four                                                                   
separate   resolutions   in   the  House   that   broke   the                                                                   
construction  of  an  in-state  gas  bullet  line  into  four                                                                   
incremental steps.  The first step  was to work on  supply of                                                                   
the gas,  whether from Gubik  field or  the North Slope  as a                                                                   
contingent   supply.   The   second  step   worked   on   the                                                                   
transportation facility. The third  step addressed creating a                                                                   
volume  of demand  that would  fill  the pipe  and bring  the                                                                   
tariff down for  all users. The fourth step  addressed export                                                                   
demand and attempted to obtain  sufficient components to fill                                                                   
a  500 million  cubic  feet  per  day (MMcf/d)  pipeline,  or                                                                   
approximately 180 billion cubic feet per year (Bcf/y).                                                                          
                                                                                                                                
Representative Ramras  noted that the Railbelt  region needed                                                                   
approximately  60 billion  Bcf/y of gas  for all  residential                                                                   
and  light commercial  operations.  A restart  of the  Agrium                                                                   
facility  would require  another 60 Bcf/y.  Another 60  Bcf/y                                                                   
would be required for export.                                                                                                   
                                                                                                                                
Representative  Ramras   reported  that  the   original  four                                                                   
resolutions were consolidated  into one as they moved through                                                                   
the House.  He stated satisfaction  with the legislation  and                                                                   
the  progress  that Harry  Noah  [Project  Manager,  In-State                                                                   
Gasline] is making on behalf of  the state. He noted that Mr.                                                                   
Noah  is having  constructive conversations  with Agrium  and                                                                   
that there has been discussion  regarding synthetic fuels. He                                                                   
referred  to a pending  interim presentation  from Doug  Ward                                                                   
with  Alaska  Ship  and  Dry   Dock  in  Ketchikan  regarding                                                                   
building  small ships  that may  be able to  deliver fuel  to                                                                   
small Alaskan  coastal communities  and thereby lower  energy                                                                   
costs to rural Alaska.                                                                                                          
                                                                                                                                
9:26:57 AM                                                                                                                    
                                                                                                                                
Representative  Ramras  referred  to a  visit  to  Dillingham                                                                   
during  the previous  summer's  energy  hearings. The  energy                                                                   
committee  took public  testimony  from 80  to 100  residents                                                                   
that the capacity to make ice  would cut down on fuel use. He                                                                   
thought that natural gas delivered  through small ships could                                                                   
play  a significant  role in  increasing  the gross  domestic                                                                   
product of  a community  such as  Dillingham. The shapers  of                                                                   
HCR 2  felt that the governor  should take a  more aggressive                                                                   
role in shaping an in-state bullet line.                                                                                        
                                                                                                                                
Representative  Ramras  thought that  progress  is best  made                                                                   
incrementally.                                                                                                                  
                                                                                                                                
9:28:50 AM          AT EASE                                                                                                   
9:29:31 AM          RECONVENED                                                                                                
                                                                                                                                
Representative  Ramras opined  that the administration  could                                                                   
be doing more,  although the drafters are satisfied  with the                                                                   
appointment of Mr.  Noah as an in-state gas  coordinator. The                                                                   
legislation   encourages  the   administration  to   be  more                                                                   
proactive.  He listed  actions he thought  would be  prudent,                                                                   
including sending  representatives to Ketchikan  to talk with                                                                   
Mr.  Ward,  talking  with  the   U.S.  Department  of  Energy                                                                   
regarding  an  expansion  of Alaska's  export  capacity,  and                                                                   
reaching  to  the  U.S. Department  of  Defense  through  the                                                                   
executive  branch to  discuss  gas-to-liquids development  in                                                                   
Southcentral  Alaska. He  thought  that the  state needed  to                                                                   
develop energy  in Alaska over  the next fifty years.  He did                                                                   
not think  AGIA or  Denali would  offer a  solution for  many                                                                   
parts  of  the  state.  In  the  current  uncertain  economic                                                                   
climate, he thought  the state should develop  energy for in-                                                                   
state use.                                                                                                                      
                                                                                                                                
9:31:46 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman referred  to the last resolve on  page 4 and                                                                   
asked  the rationale  for  choosing the  June  1, 2011  date.                                                                   
Representative Ramras  answered that the date  had been taken                                                                   
from Mr. Noah's  timeline and he thought it was  a solid one.                                                                   
Initially  the date had  been November  2010, but he  thought                                                                   
the  date should  be  tied to  the  next election  cycle.  He                                                                   
relayed that  Mr. Noah believed  a pipeline company  would be                                                                   
selected and the project sanctioned by June 1.                                                                                  
                                                                                                                                
Senator Olson  queried the  cost over  time of building  more                                                                   
than  one   pipeline.  Representative   Ramras  referred   to                                                                   
discussions  with the  Federal  Energy Regulatory  Commission                                                                   
(FERC). Many people  have concerns that neither  of the large                                                                   
diameter pipelines would be built.  He thought Alaskans would                                                                   
not  tolerate a  re-gas certificate  for  liquid natural  gas                                                                   
(LNG) for the Conoco facility.  He emphasized that the option                                                                   
of importing  LNG for interior  Alaska was not  acceptable to                                                                   
most Alaskans.                                                                                                                  
                                                                                                                                
Representative  Ramras   opined  that  if  Alaska   builds  a                                                                   
transportation  facility,  the  market  would  take  care  of                                                                   
itself  when  it  comes  to a  large  diameter  pipeline.  He                                                                   
reiterated  the  need  for steady  incremental  progress.  He                                                                   
thought energy  was a  cornerstone for economic  independence                                                                   
for  Alaska.  The state  would  not  be dependent  on  credit                                                                   
markets and multi-national agreements.                                                                                          
                                                                                                                                
9:36:42 AM                                                                                                                    
                                                                                                                                
Senator Olson asked the approximate  cost of the bullet line.                                                                   
Representative Ramras replied  $200,000 per diameter inch per                                                                   
mile; a 20-inch  line would cost around $4  million per mile,                                                                   
bringing the  cost of an 800  mile pipeline to  $3.2 billion.                                                                   
Allowing a 20  percent cost overrun would bring  the total to                                                                   
$4 billion. He thought the money would be well spent.                                                                           
                                                                                                                                
Representative Ramras  added that the gasline  could be built                                                                   
with private sector  capital and did not have to  be built by                                                                   
the state.                                                                                                                      
                                                                                                                                
Senator  Thomas   questioned  the  timeline.   Representative                                                                   
Ramras replied that  there could be two failed  open seasons,                                                                   
one  with  TransCanada  and a  contingent  open  season  with                                                                   
Denali,  unless  fiscal  uncertainties   were  addressed.  He                                                                   
thought  an in-state  gasline would  provide opportunity  for                                                                   
Nenana Basin to  prove potential, as well as  Gubik field and                                                                   
North  Slope  fields.  He  stated that  the  purpose  of  the                                                                   
resolution was  to encourage the  administration to  put more                                                                   
resource into developing gas for in-state use.                                                                                  
                                                                                                                                
9:39:20 AM                                                                                                                    
                                                                                                                                
Senator  Huggins  commended  Representative   Ramras  on  his                                                                   
initiative.  He reminded  the committee  about the  extensive                                                                   
support from  citizens regarding developing gas  for in-state                                                                   
use. He stated support for Mr. Noah.                                                                                            
                                                                                                                                
Senator  Huggins queried  potential  for  development in  the                                                                   
Nenana  Basin,  which would  provide  a shorter  pipeline  to                                                                   
Fairbanks.                                                                                                                      
                                                                                                                                
Representative Ramras gave an  overview of three possible gas                                                                   
sources, which are being monitored by Mr. Noah:                                                                                 
                                                                                                                                
   · Gubik: the supply is promising. The field has about 600                                                                    
     Bcf. A  gas pipeline with  180 Bcf/y for 20  years would                                                                   
     need 3.6  trillion cubic  feet (Tcf). The  difficulty is                                                                   
     that  Anadarko made  mistakes  at  the corporate  level,                                                                   
     which have compromised its  ability to invest in Alaska.                                                                   
   · Nenana Basin: the commercial viability has yet to be                                                                       
     proven.  There  are  problems  with the  Army  Corps  of                                                                   
     Engineers  related  to building  a  road.  The basin  is                                                                   
     attractive but has a four-tiered  process of determining                                                                   
     success.  The  first  would  be  power  generation.  The                                                                   
     second  is to  have enough  gas  to build  a very  small                                                                   
     diameter  gasline  to  Fairbanks,  or  some  modest  LNG                                                                   
     facility that  would allow gas to be trucked  there. The                                                                   
     third would  be sufficient gas  supply to move  it north                                                                   
     as well  as south to  Southcentral. The fourth  would be                                                                   
     to  have  enough  gas  to   do  those  things  and  also                                                                   
     eventually   nominate  gas   into  the  large   diameter                                                                   
     pipeline.   Proponents    have   testified   that   they                                                                   
     anticipate finding  between 20 and 50 Bcf  this year and                                                                   
     potentially as  much as 200 Bcf in the  basin. He stated                                                                   
     that  the  basin  has characteristics  similar  to  Cook                                                                   
     Inlet Basin, which is now  producing only 10,000 barrels                                                                   
     per day.  Smaller pools  of gas  are expected  in Nenana                                                                   
     Basin.                                                                                                                     
   · North Slope: 60 miles further north with the most                                                                          
     expensive  terrain to  build  a gas  pipeline over.  The                                                                   
     line has  the support  of the mayor  of the  North Slope                                                                   
     Borough.  The gas  would be  "wet gas"  and require  gas                                                                   
     treatment facilities.                                                                                                      
                                                                                                                                
9:44:57 AM                                                                                                                    
                                                                                                                                
Senator    Huggins   asked    about   right-of-way    status.                                                                   
Representative  Ramras  replied  that there  are  two  routes                                                                   
proposed:                                                                                                                       
                                                                                                                                
   · Parks Highway route: proposed by ENSTAR and the                                                                            
     preferred route of Mr. Noah.                                                                                               
   · Glennallen route: preferred route for Alaska Natural                                                                       
     Gas Development Authority  (ANGDA). He opined that ANGDA                                                                   
     does not yet  recognize Mr. Noah and needs  to cooperate                                                                   
     with  him. The  development  authority  claims that  the                                                                   
     seven   miles   through    Denali   National   Park   is                                                                   
     unacceptable.   Senators  Murkowski   and  Begich   have                                                                   
     introduced legislation that  would allow the pipeline to                                                                   
     go  through  the  same right-of-way  corridor  that  the                                                                   
     rail,  road,   and  electric  transmission   lines  pass                                                                   
     through.  The  Glennallen   route  is  longer  and  more                                                                   
     expensive than the Parks Highway route.                                                                                    
                                                                                                                                
9:46:58 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  pointed to page  2, line 3 and  queried the                                                                   
placement  of  the "Be  It  Resolved" before  the  "Whereas."                                                                   
Representative Ramras  answered that he was not  sure why the                                                                   
bill was drafted in that format.                                                                                                
                                                                                                                                
Co-Chair  Stedman   asked  for  the  issue   to  be  checked.                                                                   
Representative Ramras agreed to check.                                                                                          
                                                                                                                                
Senator Thomas  noted that the  resolution attempts  to focus                                                                   
the  administration on  the regulatory  as  well as  economic                                                                   
issues   that   need   to   be   addressed   and   evaluated.                                                                   
Representative  Ramras replied  that Mr.  Noah would  like to                                                                   
lessen  risk  by  having  ANGDA   be  the  applicant  to  the                                                                   
Department  of Natural  Resources (DNR)  for an in-state  gas                                                                   
pipeline.  He   thought  that  once  there  is   a  permanent                                                                   
pipeline,  a  determination  could be  made  regarding  which                                                                   
entity would be best. He thought  the entity would be ENSTAR.                                                                   
                                                                                                                                
Representative Ramras reminded  the committee that ENSTAR has                                                                   
testified that  they have $1 billion  in cash and  $3 billion                                                                   
worth of credit, and are ready  to build the gas pipeline. He                                                                   
proposed that  only government was  standing in the  way. The                                                                   
intent  of  HCR  2  is to  tell  government  as  strongly  as                                                                   
possible to  get out of  the way and  let the private  sector                                                                   
build the line.                                                                                                                 
                                                                                                                                
9:50:42 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman opened public testimony.                                                                                       
                                                                                                                                
PAUL  FUHS,   LEGISLATIVE  DIRECTOR,   ALASKA  GASLINE   PORT                                                                   
AUTHORITY (AGPA),  thought the  resolution put government  in                                                                   
complete  control instead  of getting  government out  of the                                                                   
way. He  noted similar  issues  in the past  with the  Alaska                                                                   
Gasline  Inducement Act  (AGIA) trying  to control  decisions                                                                   
instead  of letting  the market  guide them.  He stated  that                                                                   
ENSTAR  could  build  the  pipeline. He  did  not  think  the                                                                   
question  of cost  risk had  been addressed  and opined  that                                                                   
rushing  into a  project could  cost Southcentral  consumers.                                                                   
Once the  certificate is  granted, no  other project  will be                                                                   
allowed into the  market until the debt is  paid. There could                                                                   
be a risk that  the state would then not be  able to bring in                                                                   
cheaper gas if it became an option.                                                                                             
                                                                                                                                
Mr. Fuhs referenced  another in-state gas project  that would                                                                   
bring gas into Valdez. He stated  that the Valdez project was                                                                   
just as legitimate. He thought  that enough volume was key to                                                                   
getting reasonably priced gas  to Southcentral Alaska. If the                                                                   
state  counts  only on  its  own  volume,  the gas  would  be                                                                   
extremely expensive and people  would not object to importing                                                                   
LNG at a third of the cost of an in-state gasline.                                                                              
                                                                                                                                
Mr. Fuhs stated  that AGPA requested that the  legislation be                                                                   
amended  to  support  an  export  license  for  any  in-state                                                                   
gasline instead of focusing on  one entity. He emphasized the                                                                   
importance of supporting all options.                                                                                           
                                                                                                                                
9:53:56 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  MOVED to  report SCS CS  HCR 2(RES)  out of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  note. There  being NO OBJECTION,  it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
SCS  CS HCR  2(RES) was  REPORTED  out of  Committee with  no                                                                   
recommendation and no fiscal note.                                                                                              
                                                                                                                                
                                                                                                                                
CS FOR HOUSE BILL NO. 199(FIN) am                                                                                             
                                                                                                                                
     "An Act making appropriations, including supplemental                                                                      
     appropriations and capital appropriations; amending                                                                        
     appropriations; and providing for an effective date."                                                                      
                                                                                                                                
9:54:55 AM                                                                                                                    
                                                                                                                                
KAREN  REHFELD, DIRECTOR,  OFFICE OF  MANAGEMENT AND  BUDGET,                                                                   
OFFICE  OF THE GOVERNOR,  explained that  HB 199  represented                                                                   
the  non-transportation  appropriations   expected  from  the                                                                   
American Recovery  and Reinvestment  Act (ARRA),  or economic                                                                   
stimulus bill.                                                                                                                  
                                                                                                                                
Ms. Rehfeld  acknowledged concerns about drawing  on reserves                                                                   
at the end of  the current and next fiscal years  as a result                                                                   
of  the current  revenue  shortfall. The  administration  has                                                                   
been discussing replacing general  funds with ARRA funds. She                                                                   
referred to a recommendation.  The largest piece not included                                                                   
in the governor's request for  the stimulus funds was related                                                                   
to  education funding.  She referred  to  two specific  funds                                                                   
through the state fiscal stabilization program:                                                                                 
                                                                                                                                
   · $20.7 million discretionary allocation                                                                                     
   · $93 million for education purposes                                                                                         
                                                                                                                                
Ms. Rehfeld  explained  that the House  recommended  that the                                                                   
first part be allocated to communities  through an additional                                                                   
revenue-sharing payment. The administration  hoped to use the                                                                   
funds for  capital appropriations,  particularly those  in SB
75 related  to the  major maintenance  list for schools,  and                                                                   
relieve pressure on the FY10 budget.                                                                                            
                                                                                                                                
9:58:59 AM                                                                                                                    
                                                                                                                                
Ms. Rehfeld  reminded the committee  that ARRA  allows states                                                                   
to  utilize the  funds  to help  offset  increases in  school                                                                   
funding. She requested  using the funds in FY10  and FY11 for                                                                   
increases already approved in the school funding formula.                                                                       
                                                                                                                                
Ms. Rehfeld  added  that in the  area of  public safety,  the                                                                   
administration  had  proposed  utilizing  justice  assistance                                                                   
grants  for capital  projects  rather than  in the  operating                                                                   
budget.  She  pointed  to  a   Department  of  Public  Safety                                                                   
appropriation  in  HB 199  for  around  $5.8 million  in  the                                                                   
operating  budget  to  hire law  enforcement  officials.  The                                                                   
governor's recommendation is to  utilize the funds for a one-                                                                   
time  capital  expenditure  and  continue  to  discuss  using                                                                   
general funds for law and public safety.                                                                                        
                                                                                                                                
Ms.  Rehfeld noted  that  the final  items  had already  been                                                                   
incorporated through  the operating budgets,  particularly in                                                                   
the areas of  Medicaid, child support enforcement,  and Child                                                                   
Support Block Grants.                                                                                                           
                                                                                                                                
Ms. Rehfeld referred to potential amendments.                                                                                   
                                                                                                                                
10:01:42 AM                                                                                                                   
                                                                                                                                
LARRY  PERSILY,  STAFF,  REPRESENTATIVE  MIKE  HAWKER,  HOUSE                                                                   
FINANCE  COMMITTEE  CO-CHAIR,  provided  an overview  of  the                                                                   
legislation  as it  passed  from the  House.  House Bill  199                                                                   
added in  all the money available  to the state.  The largest                                                                   
pieces are  $170 million for  education, mostly  state fiscal                                                                   
stabilization funds.  The $93 million would  flow through two                                                                   
school districts.  The $27  million discretionary  fund would                                                                   
go to communities  as additional revenue-sharing  dollars. He                                                                   
also  pointed  to  funding for  Title  I,  special  education                                                                   
funding at over $73 million through the districts.                                                                              
                                                                                                                                
Co-Chair Stedman  asked for  the definition  of Title  I. Mr.                                                                   
Persily  described  Title  I as  a  distribution  formula  in                                                                   
federal   law   dealing   with   economically   disadvantaged                                                                   
students.                                                                                                                       
                                                                                                                                
Mr. Persily added that approximately  $56 million in stimulus                                                                   
funds was added to HB 199 in the  House for energy efficiency                                                                   
grants,   state   energy   program,   weatherization   funds,                                                                   
electronic  medical records  funding, and  about $17  million                                                                   
for job training and employment services.                                                                                       
                                                                                                                                
10:04:15 AM                                                                                                                   
                                                                                                                                
Senator Thomas  asked how  much of  the stimulus money  still                                                                   
remained.  Mr.  Persily  answered   that  HB  199  leaves  no                                                                   
stimulus  money   unclaimed.  The   grants  are   an  unknown                                                                   
quantity, and so are not included.                                                                                              
                                                                                                                                
Co-Chair Stedman opened public testimony.                                                                                       
                                                                                                                                
STEVEN  CUNNINGHAM, CITY  CLERK, CITY  OF HOUSTON  (testified                                                                   
via teleconference), spoke on  behalf of the mayor of Houston                                                                   
in  support  of maintaining  revenue  sharing.  He  described                                                                   
Houston  as an  economically depressed  area  of Alaska  with                                                                   
little infrastructure.                                                                                                          
                                                                                                                                
Co-Chair Stedman closed public testimony.                                                                                       
                                                                                                                                
Co-Chair Hoffman  commented that the $20 million  for revenue                                                                   
sharing  was   the  only  portion   that  would   give  local                                                                   
communities  flexibility while  stimulating  the economy.  He                                                                   
stated his strong support for revenue sharing.                                                                                  
                                                                                                                                
CS HB 199(FIN)am was HEARD and  HELD in Committee for further                                                                   
consideration.                                                                                                                  
                                                                                                                                
10:07:44 AM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:07 AM.                                                                                          

Document Name Date/Time Subjects
CSHB 199(FIN) am Non Trans Stimulus_Funding Summary_Version P.A.pdf SFIN 4/14/2009 9:00:00 AM
HB 199
OMB HB199 Amendments 04.14.2009.pdf SFIN 4/14/2009 9:00:00 AM
HB 199
Sponsor Stmt HCR 2.pdf SFIN 4/14/2009 9:00:00 AM
HCR 2