Legislature(2019 - 2020)SENATE FINANCE 532

03/21/2020 09:00 AM FINANCE

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Audio Topic
09:01:50 AM Start
09:02:26 AM Presentation: Economic Support for Alaskans Impacted by Covid-19
03:06:22 PM HB308
04:05:30 PM HB205
04:06:30 PM Presentation: Short and Long-term Impacts of Budget
04:48:40 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Uniform Rule 23(a) Waived
+ Presentation: TELECONFERENCED
Economic Support for Alaskans Impacted by
COVID-19
**Please Note: All Public Testimony Will be via
Telephone Only. No In-Person Testimony.
From Juneau: 586-9085, Anchorage: 563-9085
Outside Juneau or Anchorage: 844-586-9085
Written Testimony Will be Accepted at:
finance.committee@akleg.gov
+ Bills Previously Heard/Scheduled: TELECONFERENCED
*+ HB 308 UNEMPLOYMENT BENEFITS FOR COVID-19 TELECONFERENCED
Moved SCS HB 308(FIN) AM Out of Committee
+= HB 205 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Moved SCSCSHB 205(FIN)(CORRECTED)AM(BRFSUPMAJFLD)
                 SENATE FINANCE COMMITTEE                                                                                       
                      March 21, 2020                                                                                            
                         9:01 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:01:50 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  von  Imhof  called the  Senate  Finance  Committee                                                                    
meeting to order at 9:01 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Natasha von Imhof, Co-Chair                                                                                             
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Click Bishop                                                                                                            
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
Senator Bill Wielechowski                                                                                                       
Senator David Wilson                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Senator  Josh Revak;  Senator  Cathy  Giessel; Senator  Gary                                                                    
Stevens;  Senator John  Coghill; Senator  Jesse Kiehl;  Juli                                                                    
Lucky, Staff, Senator Natasha  von Imhof. Representative Ivy                                                                    
Sponholz,   Sponsor;  Pat   Pitney,  Director,   Legislative                                                                    
Finance   Division;  Pete   Ecklund,  Staff,   Senator  Bert                                                                    
Stedman.                                                                                                                        
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Bryan  Butcher,  CEO  Alaska  Housing  Finance  Corporation,                                                                    
Anchorage; Patsy Westcott,  Director, Division of Employment                                                                    
and  Training Services,  Department of  Labor and  Workforce                                                                    
Development; Jon  Bittner, Executive Director,  Alaska Small                                                                    
Business  Development  Center,  Anchorage;  Joe  Schierhorn,                                                                    
President  and CEO,  Northrim Bank;  Cara Durr,  Director of                                                                    
Public  Engagement, Food  Bank  of  Alaska, Anchorage;  Adam                                                                    
Ziegler,   Executive   Director,  New   Hope   Compassionate                                                                    
Ministry,   Anchorage;   Tyson   Gallagher,   GCI,   Juneau;                                                                    
Christine  O'Connor,  Executive   Director,  Alaska  Telecom                                                                    
Association,  Wasilla; Bal  Dreyfus,  Senior Vice  President                                                                    
Alaska,   Matson,  Anchorage.   Patsy  Westcott,   Director,                                                                    
Division of Employment and  Training Services, Department of                                                                    
Labor and Workforce Development.                                                                                                
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
CSHB 205(FIN)(Corrected) am(brf sup maj fld)                                                                                    
          APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
                                                                                                                                
          SCS CSHB 205(FIN) was REPORTED out of committee                                                                       
          with two "do pass" recommendations and five                                                                           
          "amend" recommendations.                                                                                              
                                                                                                                                
HB 308    UNEMPLOYMENT BENEFITS FOR COVID-19                                                                                    
                                                                                                                                
          SCS  HB 308(FIN)  was  REPORTED  out of  committee                                                                    
          with  a  "do  pass" recommendation  and  with  one                                                                    
          previously  published  indeterminate fiscal  note:                                                                    
          FN 1(LWF).                                                                                                            
                                                                                                                                
PRESENTATION:  ECONOMIC  SUPPORT  FOR ALASKANS  IMPACTED  BY                                                                    
COVID-19                                                                                                                        
                                                                                                                                
9:02:26 AM                                                                                                                    
                                                                                                                                
Co-Chair  von  Imhof thanked  all  for  being present  on  a                                                                    
Saturday.  She  relayed  the  extreme  stressors  the  virus                                                                    
presented  to humanity,  both economic  and health  related.                                                                    
She stated that the goal  of the presentation was to explore                                                                    
what programs and  assets the state already had  in place so                                                                    
that both  public and private existing  infrastructure could                                                                    
be leveraged  in order  to support  Alaskans as  quickly and                                                                    
efficiently  as possible.  She  shared that  representatives                                                                    
from   housing,   unemployment  benefits,   small   business                                                                    
support, food insecurity connectivity,  and the supply chain                                                                    
had  been  invited  to testify  before  the  committee.  She                                                                    
assured  Alaskans  that  a  plan   was  being  developed  to                                                                    
sufficiently fund  an infrastructure  to provide  the needed                                                                    
resources to  help people immediately during  this time. She                                                                    
said  that   the  legislature  was  looking   into  enhanced                                                                    
unemployment  benefits,   mortgage  assistance,   food  aid,                                                                    
interest  free  loans,  expanded  childcare  and  healthcare                                                                    
services, direct  aid to communities, and  more. She relayed                                                                    
that the  legislature had appropriated $20  million in state                                                                    
funds, specifically  in healthcare,  in the  recently passed                                                                    
supplemental  budget.  She  stated that  the  several  large                                                                    
Covid-19 bills  had been  passed on  the federal  level that                                                                    
would  provide   immediate  financial  assistance   to  both                                                                    
individuals  and   businesses.  She  related  that   it  was                                                                    
imperative  that  the  state maintain  laser  focus  on  its                                                                    
accounts so  that the scarce  and dwindling  resources could                                                                    
be directed to create the  greatest impact. She stressed the                                                                    
importance of using  federal funds as much  as possible, and                                                                    
avoid redundancies, to maximize  all funding and ensure that                                                                    
state agencies were  ready to receive and use  the money for                                                                    
the broadest benefit.                                                                                                           
                                                                                                                                
Co-Chair von Imhof dubbed the  states  current situation the                                                                    
 hat  trick from  hell   noting the  trifecta  of the  stock                                                                    
market  crashing, oil  prices  plummeting,  and the  tourist                                                                    
season at  a standstill. She  said that the  legislature was                                                                    
working on a bi-partisan plan to help Alaskans.                                                                                 
                                                                                                                                
9:06:07 AM                                                                                                                    
                                                                                                                                
Co-Chair von  Imhof reiterated the urgency  of the situation                                                                    
and stressed  that any plan  put in place could  not exploit                                                                    
the pandemic  to further any political  agenda. She lamented                                                                    
that  Alaskans  were   already  struggling  financially  and                                                                    
stated   that  the   legislature  would   work  to   provide                                                                    
assistance to Alaskans.                                                                                                         
                                                                                                                                
9:06:16 AM                                                                                                                    
                                                                                                                                
^PRESENTATION:  ECONOMIC SUPPORT  FOR  ALASKANS IMPACTED  BY                                                                  
COVID-19                                                                                                                      
                                                                                                                                
Co-Chair von Imhof solicited comments from the committee.                                                                       
                                                                                                                                
9:07:05 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman thought  there  was  clearly an  expedited                                                                    
process  underway   in  the   legislature.  The   state  had                                                                    
substantially   constrained   savings   accounts,   so   the                                                                    
legislature was  working not  to duplicate  federal efforts.                                                                    
He  stressed that  there were  existing state  agencies that                                                                    
were working  together over  the next two  to three  days to                                                                    
craft an assistance plan.                                                                                                       
                                                                                                                                
Co-Chair von  Imhof hoped  that each  agency could  state on                                                                    
the record  what they were  doing during this time  and what                                                                    
could  the state  do to  help with  their efforts.  She felt                                                                    
that this would  help to define legislatively  what could be                                                                    
done over the next few days.                                                                                                    
                                                                                                                                
9:08:47 AM                                                                                                                    
                                                                                                                                
BRYAN  BUTCHER,  CEO  ALASKA  HOUSING  FINANCE  CORPORATION,                                                                    
ANCHORAGE  (via teleconference),  explained  that the  state                                                                    
housing   market  was   very  strong.   He  said   that  the                                                                    
delinquency rate  for the states  16,000  mortgage portfolio                                                                    
was under 3  percent. He shared that  foreclosure rates were                                                                    
under a quarter  of 1 percent, the lowest  in state history.                                                                    
He relayed  that interest rates  were low, compared  to 2008                                                                    
and  2009. Most  people  had been  able  to refinance  their                                                                    
mortgages to a  low rate of 3 percent or  3.5 percent, which                                                                    
gave homeowners more flexibility with funds.                                                                                    
                                                                                                                                
Mr.  Butcher  stated that AHFC was looking at  how to handle                                                                    
the  oncoming  fallout  from   Covid-19.  He  mentioned  the                                                                    
governor's  recent  executive  order   that  put  forward  a                                                                    
moratorium  on  foreclosures  and evictions  for  AHFC,  for                                                                    
Covid-19 related  complications. He  noted that  AHFC worked                                                                    
with the  governor on  the moratorium and  he hoped  that it                                                                    
would help lower stress for Alaskans at this time.                                                                              
                                                                                                                                
9:11:28 AM                                                                                                                    
                                                                                                                                
Mr. Butcher addressed public housing.  He detailed that AHFC                                                                    
ran  over 16,000  apartments, in  13 different  communities,                                                                    
and administered between 5,000  and 6,000 rent vouchers that                                                                    
were  used for  private  sector rentals.  The programs  were                                                                    
federally  funded  through  Housing  and  Urban  Development                                                                    
(HUD).  The state  received  approximately  $60 million  per                                                                    
year  for  the program,  with  nearly  $3 million  going  to                                                                    
private landlords  and vouchers.  He discussed  lower income                                                                    
individuals that  lived paycheck to paycheck  and cited that                                                                    
many of  those individuals lived  in AHFC housing.  He noted                                                                    
that  80 percent  of the  12,000 people  that lived  in AHFC                                                                    
housing  would  be  homeless without  assistance  from  AHFC                                                                    
programs.  He  thought the  group  was  the most  vulnerable                                                                    
population.  He spoke  to the  governors  announcement  of a                                                                    
moratorium  of 60  days on  evictions  for Covid-19  related                                                                    
issues;  therefore, people  would  not have  to worry  about                                                                    
losing their  housing and could  focus on the  other staples                                                                    
to continue living through the crisis.                                                                                          
                                                                                                                                
9:13:27 AM                                                                                                                    
                                                                                                                                
Mr.  Butcher spoke  to the  Homeless Assistance  program. He                                                                    
thanked the  legislature and governor for  the early passage                                                                    
of the  mental health  budget. He  shared that  the Homeless                                                                    
Assistance  program and  the Special  Needs Housing  program                                                                    
were  both funded  early  in the  mental  health budget.  He                                                                    
commented that  it did  not take  much for  people receiving                                                                    
benefits from the program to be  in crisis. He said that the                                                                    
way the  program was administered  was that  shelters signed                                                                    
three-year contracts with  AHFC. He said that  this was done                                                                    
because  it was  difficult for  non-profits to  survive with                                                                    
the expectation that funding could  disappear in a year.  He                                                                    
reiterated  that passing  the budget  early allowed  AHFC to                                                                    
execute  grants  early  to  41  providers  in  13  different                                                                    
communities. He  said that the  funds would  be administered                                                                    
between FY20  and FY21;  a spike in  need was  expected into                                                                    
FY21.                                                                                                                           
                                                                                                                                
9:15:23 AM                                                                                                                    
                                                                                                                                
Co-Chair  von  Imhof  pointed out  that  the  committee  had                                                                    
adopted  a Committee  Substitute (CS)  the previous  evening                                                                    
that included full funding for AHFC programs.                                                                                   
                                                                                                                                
Mr.  Butcher  pointed out  that  AHFC  also had  a  Homeless                                                                    
Prevention program.  He related that studies  had shown that                                                                    
it was four times less expensive  to keep a family in a home                                                                    
than to take a family out  of homelessness and put them in a                                                                    
home. He estimated that the  average cost of helping someone                                                                    
to avoid  homelessness was  $500. He  relayed that  AHFC saw                                                                    
the possibility  of many Alaskans becoming  homeless related                                                                    
to  Covid-19. He  said  that the  prevention  program was  a                                                                    
priority.                                                                                                                       
                                                                                                                                
9:16:33 AM                                                                                                                    
                                                                                                                                
Co-Chair von Imhof asked Mr.  Butcher about people that were                                                                    
not current  AHFC program participants and  wondered whether                                                                    
those  people could  get assistance.  He  stressed that  the                                                                    
shelters should be the first  point of contact for those not                                                                    
currently in an AHFC program.                                                                                                   
                                                                                                                                
Mr.  Butcher  stated that  individuals  could  reach out  to                                                                    
shelters, and  the information would  pass through  to AHFC.                                                                    
He  related  that  if  Alaskans  had  issues  with  mortgage                                                                    
payments,  it  was  encouraged   to  contact  their  service                                                                    
provider, and then the service  provider would contact AHFC.                                                                    
He encouraged people  take early action on the  issue to get                                                                    
the process going.                                                                                                              
                                                                                                                                
9:17:49 AM                                                                                                                    
                                                                                                                                
Senator Wilson  asked how AHFC was  handling mortgages still                                                                    
in process.                                                                                                                     
                                                                                                                                
Mr. Butcher  stated that AHFC  was still  offering potential                                                                    
homeowners the opportunity to lock  in interest rates, which                                                                    
had been going higher almost  by the day. The interest rates                                                                    
had  dropped below  3  percent last  week  when the  federal                                                                    
government had dropped  their numbers to zero.  He said that                                                                    
the lenders who made the  loans were finding it difficult to                                                                    
sell  the loans.  He said  that Fannie  Mae and  Freddie Mac                                                                    
were not buying, and AHFCs   interest rates fluctuated based                                                                    
on the  cost of  capital. He  had found  that the  banks and                                                                    
credit  unions  were unable  to  sell  the loans.  Currently                                                                    
there was  no liquidity in  the capital markets.  There were                                                                    
still mortgages being done but it was shrinking by the day.                                                                     
                                                                                                                                
9:19:29 AM                                                                                                                    
                                                                                                                                
Senator Bishop had heard on  public radio the previous night                                                                    
that a 12-month moratorium would  be made for existing Fanny                                                                    
Mae and Freddie Mac loans.                                                                                                      
                                                                                                                                
Mr.  Butcher knew  the president  had put  out an  order for                                                                    
suspension on  those loans. He recalled  that the suspension                                                                    
was for  60 or 90  days. He said that  he would get  back to                                                                    
the committee with more information.                                                                                            
                                                                                                                                
9:20:36 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman   understood  that   there  would   be  no                                                                    
evictions in the rental market around the state.                                                                                
                                                                                                                                
Mr. Butcher explained that there  was a 60-day moratorium on                                                                    
all  public  housing  voucher  holders  that  were  in  AHFC                                                                    
apartments. He said  that most apartments in  the state were                                                                    
not run by AHFC. He did  not know if the eviction suspension                                                                    
applied to  those apartments. He  had seen  different states                                                                    
have  a broader  suspension of  evictions. He  believed that                                                                    
conversations on the matter were ongoing.                                                                                       
                                                                                                                                
9:21:55 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  thought the information  would be  good to                                                                    
get out  to the  public. He  thought if  there was  a 60-day                                                                    
moratorium and  the virus expanded exponentially,  it may be                                                                    
important to extend the moratorium.                                                                                             
                                                                                                                                
Co-Chair  von  Imhof asked  Mr.  Butcher  to return  to  the                                                                    
committee  with  additional   information  on  the  eviction                                                                    
moratorium.                                                                                                                     
                                                                                                                                
Co-Chair von  Imhof asked whether  AHFC was poised  and able                                                                    
to receive  additional federal funds when  the omnibus bills                                                                    
were passed.                                                                                                                    
                                                                                                                                
Mr.  Butcher  affirmed  that  AHFC  was  poised  to  receive                                                                    
additional  funds.  He  thought that  federal  appropriation                                                                    
authority could be  an issue if the  funds were substantial.                                                                    
The  corporation  had  been  used   for  a  lot  of  federal                                                                    
emergency funds. He  noted that much of  the disaster relief                                                                    
funds that came  through after the 1964  earthquake had gone                                                                    
through AHFC.                                                                                                                   
                                                                                                                                
Co-Chair  von Imhof  thought the  goal was  for the  federal                                                                    
government to get funding out as soon as possible.                                                                              
                                                                                                                                
9:23:51 AM                                                                                                                    
                                                                                                                                
Senator Bishop  asked how AHFC determined  who qualified for                                                                    
a rental voucher.                                                                                                               
                                                                                                                                
Mr. Butcher  stated that AHFC followed  federal rules, which                                                                    
varied  for public  housing versus  receiving a  voucher. He                                                                    
relayed that  public housing required  50 percent  of median                                                                    
income  and below,  80  percent for  vouchers.  There was  a                                                                    
prioritization based  on need. He  noted that 80  percent of                                                                    
applicants  were very  low income,  and  there were  waiting                                                                    
lists  in  most  communities.  He  offered  to  provide  the                                                                    
committee with waiting lists by community.                                                                                      
                                                                                                                                
Senator  Bishop   asked  Mr.   Butcher  whether   people  on                                                                    
unemployment were eligible to apply.                                                                                            
                                                                                                                                
Mr. Butcher answered in the affirmative.                                                                                        
                                                                                                                                
9:25:26 AM                                                                                                                    
                                                                                                                                
Co-Chair von  Imhof noted that  there was more than  one way                                                                    
to  pay  for  rent.  She  relayed  that  AHFC  was  offering                                                                    
financial assistance.  She stated  the legislature  was also                                                                    
looking at providing wage replacement.                                                                                          
                                                                                                                                
Co-Chair  von Imhof  understood  that  people not  currently                                                                    
being  served by  AHFC should  contact their  banks if  they                                                                    
have  a   mortgage,  or  homeless  shelters   if  they  were                                                                    
homeless,  and  those  operations would  contact  AHFC.  She                                                                    
stated  that  the  committee  was   going  to  try  and  get                                                                    
telephone  numbers  to put  on  the  committee website.  She                                                                    
directed attention  to the AHFC  website that  was displayed                                                                    
on screen.                                                                                                                      
                                                                                                                                
Mr. Butcher explained  that AHFC offices were  closed to the                                                                    
public,   but   that   email  and   telephone   were   still                                                                    
operational.                                                                                                                    
                                                                                                                                
Co-Chair von  Imhof asked whether AHFC  had enough employees                                                                    
to handle the call volume.                                                                                                      
                                                                                                                                
Mr.  Butcher  believed that  AHFC  had  enough employees  to                                                                    
handle the current volume.                                                                                                      
                                                                                                                                
9:27:45 AM                                                                                                                    
                                                                                                                                
Co-Chair von  Imhof queried the  available resources  in the                                                                    
Department of  Labor and Workforce Development,  Division of                                                                    
Employment  and  Training  Services,  both  financially  and                                                                    
employee capacity.  She wondered whether the  department was                                                                    
poised to  receive federal funding and  what the legislature                                                                    
could  do  to  help  the  department  with  its  efforts  in                                                                    
response to the virus.                                                                                                          
                                                                                                                                
PATSY  WESTCOTT,   DIRECTOR,  DIVISION  OF   EMPLOYMENT  AND                                                                    
TRAINING  SERVICES,   DEPARTMENT  OF  LABOR   AND  WORKFORCE                                                                    
DEVELOPMENT (via  teleconference), relayed a  brief overview                                                                    
of  the  Unemployment  Insurance  Program  (UI),  which  she                                                                    
stressed was not  a social service program,  but rather like                                                                    
any other insurance program. She  shared that employers paid                                                                    
contributions  into the  program  to  protect an  employee's                                                                    
future loss  of wages. Alaska  was one of three  states that                                                                    
had  provision in  statute  where an  employee  also paid  a                                                                    
portion of  the contribution.  She related that  the current                                                                    
maximum benefit  amount was $370.  Alaska was also one  of a                                                                    
handful of  states that provided a  dependents  allowance of                                                                    
$24, per  dependent, per week,  with a 3-dependent  cap. She                                                                    
spoke  of the  various ways  to apply  for UI  benefits: the                                                                    
online  application  through  the MyAlaska  portal  and  the                                                                    
virtual call  center for those without  internet access. She                                                                    
said that  there were several individual  requirements to be                                                                    
eligible for  UI: the individual must  be unemployed through                                                                    
no  fault  of  their  own;  and  individual  must  be  able,                                                                    
available,  and actively  seeking  work. She  said that  the                                                                    
second  requirement had  proved  challenging for  unemployed                                                                    
workers in the  current environment. She shared  some of the                                                                    
current actions of  the department to address  the influx of                                                                    
cases. She  said that  another cue had  been created  in the                                                                    
virtual call center that dealt  specifically with people who                                                                    
were out  of work because  of Covid-19. She said  that phone                                                                    
hours  had   been  expanded  and  that   staff  was  working                                                                    
overtime.  She  related  28  staff  members  that  had  been                                                                    
working in other units of  the program had been realigned to                                                                    
help with the UI claims,  which had increased sharply in the                                                                    
previous week.                                                                                                                  
                                                                                                                                
9:32:11 AM                                                                                                                    
                                                                                                                                
Ms. Westcott stated  that there had been a 50  percent to 70                                                                    
percent increase  in applications  for UI from  the previous                                                                    
week.  She said  that  the application  had been  simplified                                                                    
over the  past week.  She reiterated the  problematic nature                                                                    
of the  requirement that the  applicant be  actively seeking                                                                    
work  in  the  current   environment  and  shared  that  the                                                                    
department  was liberally  applying statutes  and regulation                                                                    
to  allow  as  many   individuals  as  possible  to  receive                                                                    
benefits. She  expressed appreciation for the  US Department                                                                    
of Labor  for coming out  with additional guidance  to state                                                                    
that  allowed  state  more   flexibility  in  relaxing  that                                                                    
requirement. She stated  that she had worked  in the program                                                                    
for 27  years and,  traditionally, when an  individual filed                                                                    
an initial  claim, they  filed every two  weeks in  order to                                                                    
get  their  benefits.  She  said that  a  change  was  being                                                                    
implemented  for  people to  file  weekly  so that  benefits                                                                    
could be issued  faster. She shared that  the department was                                                                    
developing  a page  on  its website  that  was dedicated  to                                                                    
Covid-19,  with  information   for  unemployed  workers  and                                                                    
employers.  The  hope  was  to   have  all  the  information                                                                    
accessible on one page.                                                                                                         
                                                                                                                                
9:34:55 AM                                                                                                                    
                                                                                                                                
Ms. Westcott  stated that  passage of  legislation currently                                                                    
before the  legislature would be helpful  to the department.                                                                    
She referenced HB 308 or  SB 240. Both pieces of legislation                                                                    
would  enable the  program  to  further liberally  interpret                                                                    
work  requirements   to  pay  more  individuals   that  were                                                                    
unemployed due  to the virus.  The legislation  would expand                                                                    
eligibility, expand  the number  of dependents,  and removed                                                                    
the waiting week.                                                                                                               
                                                                                                                                
9:37:15 AM                                                                                                                    
                                                                                                                                
Senator Bishop thought if HB  308 could be passed within the                                                                    
next  24 hours  it  would  be best.  He  was concerned  with                                                                    
people having to  reapply after this week.  He asked whether                                                                    
it  would  be helpful  to  the  department if  the  governor                                                                    
signed the bill within the next 24-36 hours.                                                                                    
                                                                                                                                
Ms. Westcott answered in the  affirmative. She mentioned the                                                                    
effective date  of the legislative  change. She  thought the                                                                    
legislation should contain a retroactive effective date.                                                                        
                                                                                                                                
Senator  Bishop asked  whether Ms.  Westcott  had drafted  a                                                                    
letter to  the delegation  regarding an emergency  grant for                                                                    
UI.                                                                                                                             
                                                                                                                                
Ms. Westcott  knew that letters  had already  been submitted                                                                    
to  the congressional  delegation. She  thought HR  5021 had                                                                    
been  passed and  signed by  the president;  and included  a                                                                    
provision for  additional administrative  funding for  UI in                                                                    
direct response to the virus.                                                                                                   
                                                                                                                                
9:39:56 AM                                                                                                                    
                                                                                                                                
Co-Chair von  Imhof wanted to  ensure that the  division was                                                                    
poised  to  receive  federal  funds   when  the  funds  were                                                                    
released.                                                                                                                       
                                                                                                                                
Ms. Westcott  was concerned the  division did  not currently                                                                    
have enough  federal authority for  FY20 to  accommodate the                                                                    
receipt of additional federal funds.                                                                                            
                                                                                                                                
Co-Chair  von Imhof  stated that  the  committee would  work                                                                    
within HB  308 to increase the  departments  federal receipt                                                                    
authority. She  asked for  an effective  date that  would be                                                                    
enough for the department.                                                                                                      
                                                                                                                                
Ms.  Westcott recommended  the effective  date be  the first                                                                    
week  of March.  She  relayed that  the  beginning of  March                                                                    
would allow for  the greatest flexibility to  respond to the                                                                    
growing needs of Alaskans.                                                                                                      
                                                                                                                                
Co-Chair von  Imhof understood that  if the  federal receipt                                                                    
authority  were increased  in  the CS,  it  would allow  the                                                                    
department  to  receive  the  federal   money  when  it  was                                                                    
released.                                                                                                                       
                                                                                                                                
Ms. Westcott replied in the affirmative.                                                                                        
                                                                                                                                
9:41:56 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman thought the  committee had several vehicles                                                                    
through  which  to  expand  federal  receipt  authority.  He                                                                    
thought the  committee could take  action to make  sure that                                                                    
the department had ample receipt authority.                                                                                     
                                                                                                                                
9:42:27 AM                                                                                                                    
                                                                                                                                
Senator  Wielechowski  had  asked about  a  comparison  with                                                                    
other states.  He had  looked the figured  up online  and it                                                                    
appeared  that Alaskas   weekly maximum  was $370.  He noted                                                                    
that  Oregons  weekly  maximum  was  $648, Washington's  was                                                                    
$790, Hawaiis  was $630 per  week. He pointed out that other                                                                    
oil producing  states had limits  as high as $618  per week.                                                                    
He  lamented   that  the  limit   in  Alaska   was  woefully                                                                    
inadequate in comparison to other states.                                                                                       
                                                                                                                                
Ms.   Westcott   stated   that   Alaska's   maximum   weekly                                                                    
unemployment insurance rate was very  low. She said that his                                                                    
request had been  sent to the commissioners   office and she                                                                    
apologized  that  he  had not  yet  received  the  requested                                                                    
information. She  cited that Alaska  was 37th in  the nation                                                                    
with  regard to  the maximum  weekly benefit  amount; Alaska                                                                    
was last in the country  with regard to the wage replacement                                                                    
rate, after Puerto Rico and the Virgin Islands.                                                                                 
                                                                                                                                
Co-Chair  von  Imhof thought  Ms.  Westcott  had cited  that                                                                    
there was a provision for a temporary higher weekly amount.                                                                     
                                                                                                                                
Ms. Westcott  answered "no"  that the  bill did  not include                                                                    
provision  for  increasing  the   weekly  amount.  The  bill                                                                    
increased  the dependents  allowance  from $24  per week  to                                                                    
$75, per dependent, per week; as  well as lifting the cap on                                                                    
the number of dependents that could be considered.                                                                              
                                                                                                                                
Co-Chair von  Imhof asked whether  there was  a way to  do a                                                                    
temporary higher amount for weekly benefits.                                                                                    
                                                                                                                                
Ms.  Westcott affirmed  that benefits  were set  in statute,                                                                    
and  a  statute  change  would be  needed  to  increase  the                                                                    
maximum weekly  benefit amount. She  explained that  back in                                                                    
2008, the Congress had passed  a piece of legislation called                                                                    
Federal  Additional  Compensation,   which  added  a  dollar                                                                    
amount to every payment, in  all states. She understood that                                                                    
congress  was currently  looking  into  a similar  provision                                                                    
that  would add  to the  states  weekly  benefit amount  and                                                                    
would be 100  percent federally financed. She  said that the                                                                    
amount was currently unknown.                                                                                                   
                                                                                                                                
9:47:06 AM                                                                                                                    
                                                                                                                                
Co-Chair von  Imhof reiterated that  the bill  increased the                                                                    
money for dependents.                                                                                                           
                                                                                                                                
9:47:19 AM                                                                                                                    
                                                                                                                                
Senator  Wielechowski   thought  there  was   a  significant                                                                    
balance in  the UI trust  fund. He  asked how much  it would                                                                    
impact the fund if the  weekly maximum benefit was increased                                                                    
by $100.                                                                                                                        
                                                                                                                                
Ms. Westcott  replied that  she did not  know. She  said she                                                                    
could get  back to the  committee on the matter.  She stated                                                                    
that there had  been stress tests run on the  fund. She said                                                                    
that  the  fund was  extremely  healthy  and was  poised  to                                                                    
weather this storm.                                                                                                             
                                                                                                                                
9:48:34 AM                                                                                                                    
                                                                                                                                
Co-Chair  von  Imhof noted  that  the  bill needed  to  move                                                                    
quickly,  as  the  number of  UI  applicants  had  increased                                                                    
dramatically.  She commented  that  the  benefits should  be                                                                    
provided  to   get  Alaskans  through  the   crisis  without                                                                    
stressing  the  states   accounts. She  hoped  that  federal                                                                    
dollars would  be arriving soon  to help with  the financial                                                                    
burden.  She  said that  wage  replacement  would be  ideal,                                                                    
along  with  business  loans  so wages  could  be  paid,  to                                                                    
alleviate paying out UI.                                                                                                        
                                                                                                                                
9:49:38 AM                                                                                                                    
                                                                                                                                
Co-Chair von  Imhof introduced the next  testifier. She said                                                                    
that Mr.  Bittner would  speak first,  then the  banks would                                                                    
weigh in on the matter.                                                                                                         
                                                                                                                                
9:50:36 AM                                                                                                                    
                                                                                                                                
JON  BITTNER,  EXECUTIVE  DIRECTOR,  ALASKA  SMALL  BUSINESS                                                                    
DEVELOPMENT CENTER,  ANCHORAGE (via teleconference),  gave a                                                                    
quick  overview of  the  Alaska  Small Business  Development                                                                    
Center  (ASBDC). He  noted  that  small businesses  employed                                                                    
less  than  500  people  and  composed  99  percent  of  the                                                                    
businesses in the  state. He noted that  the center provided                                                                    
workshops  and training,  and served  over 100  communities,                                                                    
with  7  centers  across  Alaska.   He  relayed  that  small                                                                    
businesses were  being hit particularly hard  by the current                                                                    
situation. He mentioned a survey  that had circulated by the                                                                    
Anchorage Economic  Development Corporation (AEDC)  to judge                                                                    
the  impact of  Covid-19 on  businesses, which  had received                                                                    
over 500  responses, with 95 percent  of surveyed businesses                                                                    
reporting negative  affects due  to the virus.  Revenues had                                                                    
been slashed  from 32 percent  to 100 percent.  Workers were                                                                    
being laid  off from breweries, restaurants,  retail stores,                                                                    
and hotels  by the hundreds.  He said that rural  Alaska had                                                                    
been  having trouble  moving to  telework, and  many telecom                                                                    
utilities were stepping up to provide assistance.                                                                               
                                                                                                                                
9:53:28 AM                                                                                                                    
                                                                                                                                
Mr. Bittner lamented that  food and beverage, entertainment,                                                                    
tourism  had all  been negatively  affected. He  warned that                                                                    
the  energy  industry,  manufacturing, seafood,  and  retail                                                                    
industries  would  be hit  hard  soon.  He said  that  every                                                                    
industry  in  the state  would  be  negatively affected.  He                                                                    
shared that  the CEO of  Marriot International  had recently                                                                    
sent an  email to all  employees explaining that  the impact                                                                    
of  the virus  was  worse than  that of  9/11  and the  2009                                                                    
financial  crisis  combined.  The  virus was  causing  a  75                                                                    
percent  reduction in  Marriots  bottom  line. He  said that                                                                    
all ASBDC  workshops had been  moved online and  all offices                                                                    
were working remotely. Every training  was being offered for                                                                    
free  to  be  sure  people had  the  information  they  need                                                                    
without worrying  about how to  pay for the  information. He                                                                    
said that  ASBCD was working with  national restaurant chain                                                                    
representatives  to  develop  webinars to  help  restaurants                                                                    
transition from  in-house dining to take  away and delivery.                                                                    
He shared that ways to  help the tourism industry were being                                                                    
explored.                                                                                                                       
                                                                                                                                
9:56:08 AM                                                                                                                    
                                                                                                                                
Mr. Bitter  informed that short-term contractors  were being                                                                    
hired to help with overflow,  to get assistance to people as                                                                    
quickly  as possible.  He shared  that  a dedicated  webpage                                                                    
would be  launched later in  the day that would  collect all                                                                    
business   assistance   resources  information   and   local                                                                    
government and  state government  websites that  would serve                                                                    
as  central repository  for small  businesses  to find  what                                                                    
they  need  as  quickly  and  efficiently  as  possible.  He                                                                    
related  that he  had been  working  with local  governments                                                                    
across the  state as well  as regional  economic development                                                                    
organizations  to  help get  ahead  of  the issue  and  stay                                                                    
informed  while  providing  accurate information.  He  noted                                                                    
that Alaska  was next  in line  to get  approved for  a loan                                                                    
program  that   funded  up  to  $2   million  to  qualifying                                                                    
businesses at  a rate of  3.75 percent,  up to 30  years. He                                                                    
added that non-profits  were also eligible for  the loans at                                                                    
a rate  of 2.5 percent.  The loans  could be used  for bill,                                                                    
payroll, and accounts payable to  keep businesses afloat. He                                                                    
thought the  program would be  helpful. He relayed  that not                                                                    
all  businesses   would  be  eligible.  He   mentioned  that                                                                    
businesses had been  stepping up to help  during this trying                                                                    
time.                                                                                                                           
                                                                                                                                
Mr.  Bittner relayed  that the  banking  community had  been                                                                    
working with  businesses to  keep doors  open and  make sure                                                                    
that  loan  payments could  be  managed.  He said  that  the                                                                    
telecom industry  was working to provide  internet to people                                                                    
and the  transportation industry  had been doing  good work.                                                                    
He  highlighted that  supermarkets were  providing food  and                                                                    
had been  doing a fantastic  job trying to  prevent hoarding                                                                    
and offering special hours for seniors.                                                                                         
                                                                                                                                
9:59:20 AM                                                                                                                    
                                                                                                                                
Mr. Bittner  addressed receipt of  federal dollars.  He said                                                                    
that ASBDC  was included in the  trillion-dollar relief bill                                                                    
currently  working its  way through  congress  and would  be                                                                    
provided  additional   funding  to  expand   operations.  He                                                                    
understood  that  the funding  did  not  come with  a  match                                                                    
requirement. He affirmed  that the program would  be able to                                                                    
accept finds and would deploy them as rapidly as possible.                                                                      
                                                                                                                                
9:59:58 AM                                                                                                                    
                                                                                                                                
Co-Chair  von Imhof  asked whether  ASBDC needed  additional                                                                    
receipt authority for the federal funds.                                                                                        
                                                                                                                                
Mr. Bittner replied in the affirmative.                                                                                         
                                                                                                                                
Co-Chair  von Imhof  appreciated  the  level of  information                                                                    
provided by the testifier.  She solicited questions from the                                                                    
committee.                                                                                                                      
                                                                                                                                
10:00:30 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman recalled  that  the interest  rate was  at                                                                    
2.75, with a $2 million cap for small businesses.                                                                               
                                                                                                                                
Mr.  Bittner stated  the  nonprofit rate  was  2.75 and  the                                                                    
small business interest rate was 3.75.                                                                                          
                                                                                                                                
Co-Chair Stedman understood the cap was $2 million.                                                                             
                                                                                                                                
Mr. Bittner answered in the affirmative.                                                                                        
                                                                                                                                
Co-Chair Stedman  thought there needed  to be clarity  as to                                                                    
what  the  federal  response  was  going  to  be  for  small                                                                    
businesses versus  the state agency  response. He  wanted to                                                                    
ensure there would be capacity  to help small businesses, so                                                                    
they did not have to shutter their doors.                                                                                       
                                                                                                                                
Co-Chair von  Imhof believed that  that the issue  should be                                                                    
brought up to the states congressional delegation.                                                                              
                                                                                                                                
10:01:38 AM                                                                                                                   
                                                                                                                                
Senator  Wilson  asked when  Mr.  Bittner  expected the  new                                                                    
centralized website to be up and running.                                                                                       
                                                                                                                                
Mr.  Bittner  anticipated  that the  site  would  be  online                                                                    
within the day.                                                                                                                 
                                                                                                                                
Co-Chair  von   Imhof  asked   whether  there   were  enough                                                                    
employees to handle the call volume and additional work.                                                                        
                                                                                                                                
Mr.  Bittner said  that currently,  yes, but  if the  volume                                                                    
grew exponentially, no. The program  was looking to possibly                                                                    
hire extra employees to fill the gap.                                                                                           
                                                                                                                                
Co-Chair  von Imhof  asked whether  any  statute change  was                                                                    
needed in order to accommodate the ASBDC.                                                                                       
                                                                                                                                
Mr. Bittner replied  that he did not believe so.  He said he                                                                    
would get back to the committee.                                                                                                
                                                                                                                                
10:02:51 AM                                                                                                                   
                                                                                                                                
JOE  SCHIERHORN,  PRESIDENT  AND  CEO,  NORTHRIM  BANK  (via                                                                    
teleconference),  acknowledged the  wide-sweeping impact  on                                                                    
the  economy  of  the COVID-19  virus.  He  considered  that                                                                    
several his  customers would have entire  seasons curtailed,                                                                    
particularly  the  tourism  industry  Southeast  Alaska.  He                                                                    
stated he  was a member  of the Alaska  Bankers Association.                                                                    
He stated  that Northrim Bank  was actively reaching  out to                                                                    
its customers  and would work  on a  case by case  basis for                                                                    
modifying  and  deferring  payments or  offering  additional                                                                    
capital.  He  stated  the  bank   would  fully  support  the                                                                    
recently  announced  state-guaranteed   loan  program  which                                                                    
mirrored the SBA  disaster relief program alluded  to by Mr.                                                                    
Bittner.                                                                                                                        
                                                                                                                                
Mr.  Schierhorn  continued  his remarks.  He  stressed  that                                                                    
Northrim was  open for business  to customers. The  bank was                                                                    
directing  customers to  utilize online  banking and  a 24/7                                                                    
call  center  was  available to  customers.  He  stated  the                                                                    
banking  industry within  Alaska  was quite  strong and  had                                                                    
worked hard to build up  significant reserves of capital and                                                                    
liquidity in  order to  provide services  to customers.   He                                                                    
stressed that the bank was  here to support the state during                                                                    
this  time of  need.  He hoped  that  the legislature  would                                                                    
support the loan program proposed by the governor.                                                                              
                                                                                                                                
Mr. Schierhorn thought  there was a huge  volume of mortgage                                                                    
refinance  activity  currently in  play,  as  well as  other                                                                    
transaction that  would require recording of  deeds of trust                                                                    
in the  state recorders  office.  He stated it  was critical                                                                    
that the  state recorder's office  be open for people  to be                                                                    
able  to take  advantage of  the refinances  in process  and                                                                    
other  purchase transactions.  He  warned that  it would  be                                                                    
very disruptive to close the recorders office at this time.                                                                     
                                                                                                                                
10:07:41 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman  thought everyone was comfortable  with the                                                                    
physical positioning of the banks  throughout the state.  He                                                                    
wanted to  know what was  happening with bank  customers. He                                                                    
spoke  to earlier  comments made  about  Marriot hotels  and                                                                    
thought that  business customers would be  discussing fiscal                                                                    
positions and  how to get  some help. He asked  for examples                                                                    
of those conversations.                                                                                                         
                                                                                                                                
Mr. Schierhorn  stated the  bank was  beginning to  get such                                                                    
requests. He  mentioned that there were  businesses that had                                                                    
been  more  proactive  in  requesting  altered  payments  or                                                                    
additional working capital  to be able to  pay employees. He                                                                    
said that  as the situation  evolved, he anticipated  that a                                                                    
large  part of  the  banks activity  would  be dealing  with                                                                    
businesses  hardest  hit   in  hospitality,  bar/restaurant,                                                                    
hotel, and tourism industries.                                                                                                  
                                                                                                                                
10:10:19 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman thought  there was  a significant  need in                                                                    
the  tourism  industry.  He   thought  people  pre-paid  for                                                                    
vacations in  Alaska. He queried whether  Mr. Schierhorn was                                                                    
seeing a significant amount of  the industry asking for help                                                                    
with cashflow  dealing with potential  returns of  funds for                                                                    
pre-purchased activities.                                                                                                       
                                                                                                                                
Mr.  Schierhorn  stated  that  requests  were  beginning  to                                                                    
happen,   and  he   thought   the   number  would   increase                                                                    
dramatically over  the next  90 days. He  said that  in many                                                                    
cases  the  entire  season  would  be  cancelled  for  large                                                                    
sections of the industry.                                                                                                       
                                                                                                                                
10:11:29 AM                                                                                                                   
                                                                                                                                
Co-Chair  von  Imhof  added that  regarding  pledging  state                                                                    
assets,  no  executive  branch could  pledge  state  assets,                                                                    
appropriate or  provide loan guarantees  without legislative                                                                    
approval. She thought it was  imperative to leverage federal                                                                    
funds where appropriate and  available. Although Mr. Bittner                                                                    
stated that there  was no federal match  requirement, to the                                                                    
degree  that  it made  sense,  it  was imperative  that  the                                                                    
public and  private work  together to  share the  risk among                                                                    
the different entities and funding sources.                                                                                     
                                                                                                                                
10:12:39 AM                                                                                                                   
                                                                                                                                
Senator  Bishop asked  Mr. Schierhorn  to  confirm that  the                                                                    
governor's  moratorium on  foreclosures  applied to  private                                                                    
financial institutions.                                                                                                         
                                                                                                                                
Mr.  Schierhorn thought  the  moratorium  pertained only  to                                                                    
AHFC. He  shared that the  different mortgage  programs that                                                                    
were  supplied  by  investors   (Fannie  Mae,  Freddie  Mac,                                                                    
Veterans   Administration)  was  administered  according  to                                                                    
their own guidelines  and set their own rules.   He believed                                                                    
AHFC was  separate from those  investors.  He  thought there                                                                    
was a  wide spectrum  of mortgages  that were  controlled by                                                                    
the investors  in the federal  programs. He stated  that the                                                                    
bank  was  actively  working  with  each  investor-sponsored                                                                    
program to  be able to  work with customers on  deferment or                                                                    
modification of payments.                                                                                                       
                                                                                                                                
Mr.  Schierhorn responded  to Co-Chair  von Imhof's  comment                                                                    
and  stated his  bank was  engaged with  the Small  Business                                                                    
Administration. The bank would  actively support the program                                                                    
with  regard to  disaster  relief financing  and would  work                                                                    
with other available programs.  He highlighted several other                                                                    
agencies that  could be leveraged to  provide financing, and                                                                    
modifications to existing debt.                                                                                                 
                                                                                                                                
10:15:48 AM                                                                                                                   
                                                                                                                                
CARA  DURR,  DIRECTOR OF  PUBLIC  ENGAGEMENT,  FOOD BANK  OF                                                                    
ALASKA,  ANCHORAGE  (via   teleconference),  spoke  to  food                                                                    
insecurity  in the  state.  She relayed  that  Food Bank  of                                                                    
Alaska  was  a  statewide  agency; there  are  three  sister                                                                    
foodbanks in  Kenai, Fairbanks, and Juneau.  She stated that                                                                    
food insecurity  and ensuring adequate food  resources was a                                                                    
concern  during the  pandemic. She  said that  food pantries                                                                    
were bracing for a huge surge in need in the coming months.                                                                     
                                                                                                                                
Ms.  Durr stated  that  the food  bank  was delivering  food                                                                    
through the usual  channels and was focusing  on adapting to                                                                    
the  rising needs  and challenges  the virus  placed on  the                                                                    
distribution model.  She said that  there was a lot  of food                                                                    
already  ordered  that would  arrive  within  the week.  She                                                                    
thought that it was likely that  the food bank would need to                                                                    
purchase some food  locally to deal with the  spike in need.                                                                    
She noted there had been  an outpouring of community support                                                                    
in recent days.                                                                                                                 
                                                                                                                                
Ms. Durr  addressed action being taken  on the congressional                                                                    
level,  which  could  provide   $400  million  in  commodity                                                                    
purchases that  might benefit foodbanks in  the network. She                                                                    
said that  mobile food pantry distribution  had been adapted                                                                    
to minimize  client exposure. She  shared that  grocery gift                                                                    
cards,  donated by  Safeway, would  be distributed  clients.                                                                    
She  relayed  that  preparations  for  delivering  boxes  to                                                                    
seniors who wanted to stay in their homes had begun.                                                                            
                                                                                                                                
Ms. Durr  thought the  pre-boxed food  option made  the most                                                                    
sense during this time and  stressed the need for volunteers                                                                    
to  assist with  that effort.  She  noted that  many of  the                                                                    
foodbanks  long-term   volunteers  were  seniors   and  were                                                                    
currently self-isolating.                                                                                                       
                                                                                                                                
Ms. Durr  addressed feeding kids while  schools were closed.                                                                    
She  stated  that the  state  child  nutrition programs  had                                                                    
applied for waivers to help get  food to kids. She said that                                                                    
grab and go meals were  being provided. She was working with                                                                    
the state to  identify schools that were having  a hard time                                                                    
with the current model and  was exploring a recently adopted                                                                    
USDA model that mailed food  directly to school aged kids in                                                                    
rural communities.  She said  that additional  resources for                                                                    
children and families in the  form of supplemental EBT funds                                                                    
were available.                                                                                                                 
                                                                                                                                
10:19:38 AM                                                                                                                   
                                                                                                                                
Ms.   Durr   stressed   that  the   Supplemental   Nutrition                                                                    
Assistance Program SNAP was critical  at this time. She said                                                                    
that after  UI, SNAP  was the most  important response  to a                                                                    
worsening  economy.  She  commented  that  the  Division  of                                                                    
Public Assistance  had done a  good job in  quickly applying                                                                    
for waivers  and bracing  for a  spike in  applications. She                                                                    
said  that  people  who  needed  help  with  applying  could                                                                    
contact  the  foodbanks   outreach  team.  She  shared  that                                                                    
additional  adjustments  in  the  SNAP  program  were  being                                                                    
considered  on  the  federal  level,  such  as  raising  the                                                                    
minimum    benefit,    which    the    foodbank    supported                                                                    
wholeheartedly.                                                                                                                 
                                                                                                                                
Ms. Durr  thought that the foodbank  was reasonable prepared                                                                    
as an anti-hunger network. She  emphasized the importance of                                                                    
thinking long-term and emphasized  the needs of rural areas.                                                                    
She commented on transportation  costs. She stated that much                                                                    
of the commodities that would  be received came with limited                                                                    
shipping dollars. She  said that depending on  the length of                                                                    
the pandemic  and the magnitude  of the  economic recession,                                                                    
the foodbank could see a  downturn in community donations in                                                                    
the coming  months. She felt  that state agencies  that were                                                                    
going to  be hit  hard should have  the resources  that they                                                                    
need. She  reiterated that all  the resources  she mentioned                                                                    
today, could be found on their website.                                                                                         
                                                                                                                                
10:21:33 AM                                                                                                                   
                                                                                                                                
Co-Chair von  Imhof summarized that  people could go  to the                                                                    
Foodbank   of  Alaska   or  the   United  Way   for  further                                                                    
information. She reminded  that it was the  state that might                                                                    
have to pay for things  that federal dollars would not, such                                                                    
as shipping food to needy communities.                                                                                          
                                                                                                                                
10:22:16 AM                                                                                                                   
                                                                                                                                
ADAM  ZIEGLER, EXECUTIVE  DIRECTOR,  NEW HOPE  COMPASSIONATE                                                                    
MINISTRY, ANCHORAGE (via  teleconference), stated that after                                                                    
the first week of social  distancing, food pantries had seen                                                                    
an up  to 50 percent  increase in clients. He  remarked that                                                                    
the  Anchorage  pantry saw  a  20  percent increase  in  new                                                                    
clients. He  said that  Covenant House  had reached  out for                                                                    
assistance   in   feeding   the   youth   served   by   that                                                                    
organization.  He said  that  it had  been  found that  SNAP                                                                    
benefits were  not going as far  as they used to  as most of                                                                    
the food stockpiled by the  general public has been low-cost                                                                    
food. He  shared that people were  increasingly losing their                                                                    
jobs  and  growing  increasingly food  insecure,  especially                                                                    
when having to  chose between paying for food  or paying for                                                                    
utilities or rent.                                                                                                              
                                                                                                                                
Mr. Ziegler  anticipated growing  numbers over the  next two                                                                    
to three weeks.  He thought if the numbers  increased by the                                                                    
same  amount each  week, there  would  be a  strain on  food                                                                    
security  systems  currently  in place.  He  encouraged  the                                                                    
committee  to think  of delayed  response  tactics. He  said                                                                    
that the SNAP waiver for able  bodied adults would be a good                                                                    
first step.  He recommended  fully funding  the Homelessness                                                                    
Prevention  program as  well as  investing  in shipping  and                                                                    
supply chains.                                                                                                                  
                                                                                                                                
Mr.  Ziegler  mentioned  an  app called  "Got  Food?"  as  a                                                                    
resource that  would provide  information to  legislators to                                                                    
give to constituents in need.                                                                                                   
                                                                                                                                
10:24:59 AM                                                                                                                   
                                                                                                                                
Co-Chair von  Imhof asked Mr. Ziegler  about revenue sources                                                                    
for his agency.                                                                                                                 
                                                                                                                                
Mr. Ziegler  stated that the Anchorage  programs were mostly                                                                    
privately  funded, with  a  few  business contributions.  He                                                                    
said  that his  program  did not  receive  state or  federal                                                                    
funding and  was anticipating reduced funding  as people cut                                                                    
back on contributions.                                                                                                          
                                                                                                                                
Co-Chair von  Imhof thought it  might make sense  to provide                                                                    
funding specifically for food pantries across the state.                                                                        
                                                                                                                                
10:26:03 AM                                                                                                                   
                                                                                                                                
Co-Chair  von Imhof  thanked the  testifiers for  their time                                                                    
and information.                                                                                                                
                                                                                                                                
TYSON   GALLAGHER,   GCI,   JUNEAU   (via   teleconference),                                                                    
referenced the  massive increase in internet  use during the                                                                    
quarantine.  He  stated  the   GCI  had  extended  an  offer                                                                    
statewide for current GCI customers;  an upgrade to the next                                                                    
level, with  more speed  and data, would  be offered  for no                                                                    
charge.  Additionally, non-GCI  customers  would be  offered                                                                    
free entry level internet for the next two months.                                                                              
                                                                                                                                
Co-Chair von Imhof asked about the increased user volume.                                                                       
                                                                                                                                
Mr. Gallagher thought  GCI felt confident in  its ability to                                                                    
maintain  its networks.  He  said that  it  depended on  the                                                                    
technology   that   served   a  community;   a   middle-mile                                                                    
connection   through   fiber,    satellite,   or   microwave                                                                    
technology could bring about capacity constraints.                                                                              
                                                                                                                                
10:28:35 AM                                                                                                                   
                                                                                                                                
Senator Wilson asked  whether a person would  need to cancel                                                                    
the free upgrade after two months.                                                                                              
                                                                                                                                
Mr. Gallagher informed that  GCI would automatically upgrade                                                                    
customer plans  and would  automatically revert  to original                                                                    
plans  in two  months.  He  said that  people  who were  not                                                                    
currently customers  but took advantage  of the  entry level                                                                    
plan  would need  to  return the  modem at  the  end of  two                                                                    
months in order to not be charged.                                                                                              
                                                                                                                                
Senator Wilson  asked how  the upgrade  would work  in rural                                                                    
areas where  people used satellite  and microwave  to access                                                                    
internet service.                                                                                                               
                                                                                                                                
Mr.  Gallagher said  that GCI  is working  on the  issue. He                                                                    
stated that  GCI was devising  scenarios where  home install                                                                    
kits,  with instructions,  were  doing  delivered. He  noted                                                                    
that  GCI had  closed many  of its  stores and  converted to                                                                    
them to call centers.                                                                                                           
                                                                                                                                
10:30:16 AM                                                                                                                   
Senator Hoffman thanked Mr. Gallagher  for the service being                                                                    
offered. He asked how GCI  was disseminating the information                                                                    
so that all people of  Alaska could benefit, including those                                                                    
in the far reaches of the state.                                                                                                
                                                                                                                                
Mr.  Gallagher  stated  that GCI  was  currently  trying  to                                                                    
communicate  to customers  through email  and social  media.                                                                    
Additionally, GCI was working  with commercial customers and                                                                    
business clients,  and residential customers  to communicate                                                                    
options.  He  relayed that  GCI  was  working with  eligible                                                                    
applicants  to  get them  signed  up  for the  FCC  Lifeline                                                                    
Program, which  would provide access to  a low-cost wireless                                                                    
device that could be used as  a hot spot. He shared that GCI                                                                    
was  also  working  with  the  Department  of  Education  to                                                                    
deliver education on a broader level.                                                                                           
                                                                                                                                
Co-Chair   von  Imhof   thanked   the   testifier  for   the                                                                    
information. She  noted that  there were  granular questions                                                                    
that members  could ask GCI  directly. She added  that there                                                                    
were many people waiting online to testify.                                                                                     
                                                                                                                                
10:32:07 AM                                                                                                                   
                                                                                                                                
Senator Olson  considered the internet options  for Alaskas                                                                     
students  and teachers.  He stated  that he  had authored  a                                                                    
letter to GCI on March 17,  2020. He asked whether there was                                                                    
consideration  being taken  to  provide  service to  student                                                                    
without charging extra fees.                                                                                                    
                                                                                                                                
Mr.  Gallagher stated  that GCI  was taking  steps to  offer                                                                    
free  additional  data  and  speed   to  all  GCI  customers                                                                    
statewide -  in rural and  urban Alaska. He  recognized that                                                                    
there  would  be  simultaneous usage  of  the  internet  and                                                                    
different parts  of the  network had  different constraints.                                                                    
He relayed  that in order  to keep  the network viable  on a                                                                    
broad scale  and deliver premium  levels of service  to all,                                                                    
upgrades  to the  next plan  would be  made free  of charge,                                                                    
which  would   provide  the  greatest  lift   to  all  while                                                                    
maintaining the networks viability.                                                                                             
                                                                                                                                
Senator Olson appreciated the work being done by GCI.                                                                           
                                                                                                                                
10:34:26 AM                                                                                                                   
                                                                                                                                
CHRISTINE  O'CONNOR,  EXECUTIVE   DIRECTOR,  ALASKA  TELECOM                                                                    
ASSOCIATION,  WASILLA  (via  teleconference), gave  a  brief                                                                    
update on  the status of  the Alaska Telecom  Network during                                                                    
the unfolding  pandemic. She  relayed that  the goal  of the                                                                    
network was to keep  employees safe and customers connected.                                                                    
She  stated that  the association  was following  guidelines                                                                    
from the  Centers for Disease  Control (CDC) and  the Alaska                                                                    
Department of  Health and Social  Services. She  shared that                                                                    
the  association was  also  following  direction of  Speaker                                                                    
Edgmond  and  the Bush  Caucus,  which  had advised  against                                                                    
travel  to  villages.  She said  that  the  association  was                                                                    
following   the   governors    daily   travel   and   safety                                                                    
restrictions.  She thought  it was  important to  understand                                                                    
the different technologies  that had different capabilities.                                                                    
She said  that in  more populated  areas the  connection was                                                                    
undersea fiber  from South-Central Alaska to  Seattle, which                                                                    
was  robust and  allowed  for increased  demand. She  shared                                                                    
that over 80  percent of Alaskans were served  by this fiber                                                                    
backhaul.  She  said  that other  areas  were  connected  by                                                                    
satellite and microwave, which were  more limited. She noted                                                                    
the concern  that the networks  might not be able  to handle                                                                    
the  influx of  internet traffic  and assured  the committee                                                                    
that  the load  was being  handled. She  added that  ACS had                                                                    
shared that  the current increase  in traffic was  less than                                                                    
what was experienced when the  last two versions of  Call of                                                                    
Duty   were released.  She related  that all  providers were                                                                    
monitoring usage levels;  monitoring network performance was                                                                    
standard  practice  to  ensure  proper  traffic  management,                                                                    
detect and  resolve problems before  they impact  users, and                                                                    
minimize disruptions as soon as  possible. She said that ATA                                                                    
members were  working with communities  to expand  access to                                                                    
residents. She gave an example  of drive-in hot spots in the                                                                    
Mat-Su so  people could access  the internet in  their cars,                                                                    
which supported  social distancing. She recognized  that the                                                                    
current  situation was  bringing economic  hardship to  many                                                                    
across the state.                                                                                                               
                                                                                                                                
10:37:31 AM                                                                                                                   
                                                                                                                                
Ms.  O'Connor stated  that ATA  was committed  to the   Keep                                                                    
Americans Connected pledge, which included commitments to:                                                                      
                                                                                                                                
   1. Not terminate service to any residential or small                                                                       
     business customers because of their inability to pay                                                                       
     bills dues to the disruption caused by the Corona                                                                          
     virus pandemic.                                                                                                            
   2. Waive any late fees that any residential and small                                                                      
     business customers incur because to their economic                                                                         
    circumstances related to the Corona virus pandemic.                                                                         
   3. Open existing Wi-Fi hot spots to any American who                                                                       
     needs them.                                                                                                                
                                                                                                                                
Ms.  O'Connor stated  that additional  hot spots  were being                                                                    
added.   She  furthered   that   families  needing   greater                                                                    
assistance  could qualify  for discounted  internet services                                                                    
through  the  Lifeline   program;  more  information on  the                                                                    
program  was available  on every  providers   website or  by                                                                    
calling local  providers. She relayed  that ATA  was working                                                                    
with all anchor  institutions on what they need  and how ATA                                                                    
could support  them in the  short and long-term.  She stated                                                                    
that ATA was keeping close  contact with other utilities and                                                                    
coordinating  efforts to  the maximum  possible extent.  She                                                                    
shared that  ATA was coordinating with  the federal response                                                                    
team and various  state agencies working on  the crisis. She                                                                    
said that ATA was working  with the rural healthcare program                                                                    
participants   to   increase    bandwidth   for   healthcare                                                                    
facilitates,  as need,  for  no charge.  She  said that  the                                                                    
length  of  time needed  to  implement  the increases  would                                                                    
depend on FCC guidance and the waiver of certain rules.                                                                         
                                                                                                                                
Ms. O'Connor addressed helping  with educational needs while                                                                    
schools  were   closed.  She  stressed  that   ATAs   member                                                                    
companies   were  committed   to   helping  with   education                                                                    
services; every  provider was working with  school districts                                                                    
throughout  the state  to provide  solutions that  fit their                                                                    
schools and  the available networks. She  continued that ATA                                                                    
was coordinating  with Commissioner  Johnson and  the Alaska                                                                    
Council of  School Administrators to do  everything possible                                                                    
to help kids keep learning.                                                                                                     
                                                                                                                                
10:40:44 AM                                                                                                                   
                                                                                                                                
Senator Wilson asked how many  months the non-disconnect for                                                                    
lack of payment would be offered.                                                                                               
                                                                                                                                
Ms.  O'Connor thought  the situation  was developing  daily.                                                                    
She  stated   that  ATA  was   working  with   its  national                                                                    
association and was in  communication with the congressional                                                                    
delegation to identify resources that  could be used for the                                                                    
long-term.                                                                                                                      
                                                                                                                                
Co-Chair  von  Imhof thought  the  pandemic  would last  for                                                                    
months and  would have unknown  fallout. She thought  it was                                                                    
important  for  everyone  to stay  flexible  moving  forward                                                                    
while keeping an eye on liquidity.                                                                                              
                                                                                                                                
Co-Chair   von  Imhof   commented  on   the  importance   of                                                                    
considering education when discussing connectivity.                                                                             
                                                                                                                                
10:43:23 AM                                                                                                                   
                                                                                                                                
Co-Chair von Imhof addressed the topic of the supply chain.                                                                     
                                                                                                                                
BAL   DREYFUS,  SENIOR   VICE   PRESIDENT  ALASKA,   MATSON,                                                                    
ANCHORAGE  (via  teleconference),  shared  that  the  supply                                                                    
chain  was operating  without interruption.  He stated  that                                                                    
updates were available at matson.com.  He stated that Matson                                                                    
was  taking steps  to ensure  continued services,  including                                                                    
the deployment  of reserve vessels  if needed.  He explained                                                                    
that  sailings (twice  per week  from  Tacoma to  Anchorage,                                                                    
twice  weekly  to  Kodiak, weekly  to  Dutch  Harbor)  would                                                                    
continue.  He thought  people  should  feel comfortable  and                                                                    
confident that goods  were getting to market.  He added that                                                                    
other carriers in the state  were continuing service without                                                                    
interruption.  He  believed that  the  supply  chain in  the                                                                    
state was strong.                                                                                                               
                                                                                                                                
10:45:30 AM                                                                                                                   
                                                                                                                                
Mr.  Dreyfus commented  that stakeholders  had been  working                                                                    
well together to  ensure that goods were  delivered to their                                                                    
appropriate  destination. He  shared  that  CDC updates  and                                                                    
Coast Guard regulations were monitored  to assure the safety                                                                    
of people  and goods. He  stressed that the  teamwork within                                                                    
the   supply   chain,    including   customers,   had   been                                                                    
outstanding.                                                                                                                    
                                                                                                                                
Mr. Dreyfus relayed that Matson  had expanded its technology                                                                    
to allow  more employees  to work  from home.  He reiterated                                                                    
that there  were reserve vessels  that could be  deployed if                                                                    
necessary.                                                                                                                      
                                                                                                                                
Mr.  Dreyfus acknowledged  the  importance of  communication                                                                    
during the pandemic.                                                                                                            
                                                                                                                                
10:48:09 AM                                                                                                                   
                                                                                                                                
Senator  Olson thanked  Mr. Dreyfus  for keeping  the supply                                                                    
chain open.  He was  concerned with the  port in  Tacoma and                                                                    
thought there had been issues  with longshoremen not showing                                                                    
up  for work.  He  had understood  that  the National  Guard                                                                    
could be called in to  make sure that the Northbound vessels                                                                    
were carrying the necessary goods.                                                                                              
Mr.  Dreyfus stated  that the  labor on  the West  Coast had                                                                    
been very good  they came to work and got the job done.                                                                         
                                                                                                                                
Co-Chair  von Imhof  had shared  the concern  and wanted  to                                                                    
ensure the Tacoma port stayed open for business.                                                                                
                                                                                                                                
10:49:41 AM                                                                                                                   
                                                                                                                                
Senator  Wilson  asked  about  the  port  in  Anchorage  and                                                                    
whether there were any expected issues.                                                                                         
                                                                                                                                
Mr.  Dreyfus replied  that  there were  no  issues with  the                                                                    
Anchorage port.                                                                                                                 
                                                                                                                                
Co-Chair  von Imhof  said  it was  reassuring  to know  that                                                                    
goods  and services  were  still coming  to  the state.  She                                                                    
thought  it was  important to  be  sure that  the state  had                                                                    
enough medical supplies.                                                                                                        
                                                                                                                                
Co-Chair von Imhof thought that  the mornings  testimony had                                                                    
been reassuring. She  noted that the UI bill  needed to move                                                                    
out of committee soon.                                                                                                          
                                                                                                                                
10:51:37 AM                                                                                                                   
RECESSED                                                                                                                        
                                                                                                                                
3:05:47 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 308 am                                                                                                         
                                                                                                                                
     "An  Act relating  to  unemployment  benefits during  a                                                                    
     period of state or  national emergency resulting from a                                                                    
     novel  coronavirus  disease  (COVID-19)  outbreak;  and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
3:06:22 PM                                                                                                                    
                                                                                                                                
Co-Chair von Imhof relayed that  the committee had heard the                                                                    
companion bill,  SB 240 on  March 19, 2020. She  invited her                                                                    
staff to discuss changes in the legislation.                                                                                    
                                                                                                                                
3:06:59 PM                                                                                                                    
                                                                                                                                
JULI LUCKY,  STAFF, SENATOR NATASHA  VON IMHOF,  stated that                                                                    
the changes  in the Committee Substitute  (CS) were minimal.                                                                    
She spoke to the Explanation of Changes (copy on file):                                                                         
                                                                                                                                
     The Senate Finance CS for CS for House Bill 308 (FIN)                                                                      
    has two differences from Senate Bill 240, which was                                                                         
    heard in the Senate Finance Committee on March 19,                                                                          
     2020.                                                                                                                      
          1. The period that the protections against                                                                            
          disqualification in this bill apply has been                                                                          
          lengthened to 120 days (from 90). The period                                                                          
          starts when the bill becomes law or when a person                                                                     
          applies, whichever is later.                                                                                          
                                                                                                                                
          2. The bill has a retroactive effective date to                                                                       
          March 1, 2020. This change would result in                                                                            
          minimal fiscal impact and will not require a new                                                                      
          fiscal note.                                                                                                          
                                                                                                                                
Ms.  Lucky  reviewed  previously  published FN  1  from  the                                                                    
Department   of  Labor   and   Workforce  Development,   OMB                                                                    
Component  2276.  The  fiscal note  was  indeterminate.  The                                                                    
narrative  spoke  to why  the  note  was indeterminate,  and                                                                    
there  would be  a  required regulation  change. She  stated                                                                    
that  it  was  difficult  to determine  the  fiscal  impacts                                                                    
because the number of possible applicants was unknown.                                                                          
                                                                                                                                
3:09:54 PM                                                                                                                    
                                                                                                                                
PATSY  WESTCOTT,   DIRECTOR,  DIVISION  OF   EMPLOYMENT  AND                                                                    
TRAINING  SERVICES,   DEPARTMENT  OF  LABOR   AND  WORKFORCE                                                                    
DEVELOPMENT  (via  teleconference),   discussed  the  fiscal                                                                    
note.  She  shared  that  the  division  had  already  taken                                                                    
measures  to realign  staff to  respond  to the  anticipated                                                                    
increase  in workload.  She stressed  that the  division was                                                                    
ready to respond to the  workload, but the possible increase                                                                    
in applicants was unknown. She  felt that additional federal                                                                    
authority could be needed.                                                                                                      
                                                                                                                                
3:11:57 PM                                                                                                                    
                                                                                                                                
Co-Chair von Imhof thought the  appropriate place to add the                                                                    
federal receipt authority was in the budget.                                                                                    
                                                                                                                                
3:12:22 PM                                                                                                                    
                                                                                                                                
Co-Chair von Imhof invited the sponsor to the table.                                                                            
REPRESENTATIVE  IVY  SPONHOLZ,  SPONSOR, supported  all  the                                                                    
changes in the current CS.                                                                                                      
                                                                                                                                
Senator Bishop MOVED to  ADOPT proposed committee substitute                                                                    
for HB  308, Work Draft 31-LS1711\U  (Wayne, 3/21/20). There                                                                    
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
3:13:48 PM                                                                                                                    
                                                                                                                                
Senator Bishop  asked whether Permanent Fund  Dividends were                                                                    
included in base period wages.                                                                                                  
                                                                                                                                
Ms. Westcott answered in the negative.                                                                                          
                                                                                                                                
Senator  Bishop asked  whether a  federal dividend  would be                                                                    
included in base period wages.                                                                                                  
                                                                                                                                
Ms. Westcott answered in the negative.                                                                                          
                                                                                                                                
Senator  Bishop  asked  whether independent  contractors  or                                                                    
sole based proprietorships would be covered under UI.                                                                           
                                                                                                                                
Ms. Westcott replied in the negative.                                                                                           
                                                                                                                                
3:14:29 PM                                                                                                                    
                                                                                                                                
Senator Wielechowski asked whether  people who were employed                                                                    
by  companies  such  as  Uber   and  Lyft  were  covered  by                                                                    
unemployment insurance.                                                                                                         
                                                                                                                                
Ms.  Westcott stated  "yes  and no."  She  relayed that  the                                                                    
legislature  had  exempted  transportation  network  drivers                                                                    
from  the definition  of employment  covered  under UI.  She                                                                    
said  that  the provision  did  not  apply to  drivers  that                                                                    
carried cargo other than human passengers.                                                                                      
                                                                                                                                
Senator  Wielechowski asked  whether there  was a  number of                                                                    
Uber  and  Lyft drivers  that  were  being impacted  by  the                                                                    
COVID-19 virus.                                                                                                                 
                                                                                                                                
Ms. Westcott did  not have data on Uber and  Lyft drivers in                                                                    
the state.  The drivers were  not covered under UI  and were                                                                    
not required to report to the division.                                                                                         
                                                                                                                                
3:16:20 PM                                                                                                                    
                                                                                                                                
Senator  Bishop  MOVED to  report  SCS  HB 308(FIN)  out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
SCS HB  308(FIN) was  REPORTED out of  committee with  a "do                                                                    
pass"  recommendation  and  with  one  previously  published                                                                    
indeterminate fiscal note: FN 1(LWF).                                                                                           
                                                                                                                                
Co-Chair  Stedman briefly  told  members that  there were  a                                                                    
couple of  amendments and a  brief presentation  to consider                                                                    
for the Operating  Budget. He hoped to be  finished with the                                                                    
days business before dinner.                                                                                                    
                                                                                                                                
3:17:32 PM                                                                                                                    
RECESSED                                                                                                                        
4:04:59 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
[Co-Chair von Imhof handed the gavel to Co-Chair Stedman].                                                                      
                                                                                                                                
CS  FOR HOUSE  BILL NO.  205(FIN)(Corrected) am(brf  sup maj                                                                  
fld)                                                                                                                          
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain    programs;    capitalizing   funds;    making                                                                    
     supplemental  appropriations;  and   providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
4:05:30 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman discussed  the agenda.  He explained  that                                                                    
LFD had been invited to present an overview.                                                                                    
                                                                                                                                
^PRESENTATION: SHORT and LONG-TERM IMPACTS OF BUDGET                                                                          
                                                                                                                                
4:06:30 PM                                                                                                                    
                                                                                                                                
PAT   PITNEY,   DIRECTOR,  LEGISLATIVE   FINANCE   DIVISION,                                                                    
discussed  the presentation  "State  of Alaska  - Short  and                                                                    
Long-Term  Revenue Impact  and  Impact  on Budget  Reserves"                                                                    
(copy  on file).  She  stated that  the  presentation was  a                                                                    
short slide  deck that  would illustrate  the impact  of the                                                                    
decline in  the price of oil,  as well as the  impact on the                                                                    
POMV annual draw to the state.                                                                                                  
                                                                                                                                
4:07:04 PM                                                                                                                    
                                                                                                                                
Ms.  Pitney  spoke  to   Slide  2,  "Traditional  (non-PMOV)                                                                    
Revenue, FY19-FY29,"  which showed  a line graph.  She noted                                                                    
that she would  show three slides with graphs  that were all                                                                    
scaled the  same. The  graph on  Slide 2  showed traditional                                                                    
revenue, largely  made up of petroleum  revenue. She pointed                                                                    
out  that  the  state  was  under $3  billion  in  FY19  and                                                                    
expected to  be at  $2 billion  in fall  2020. The  blue bar                                                                    
showed the  fall forecast. There were  additional sources of                                                                    
revenue from  entities other than oil:  marijuana tax, motor                                                                    
fuel tax, and corporate income tax.                                                                                             
                                                                                                                                
Ms. Pitney  noted that  the red line  showed a  $600 million                                                                    
difference, on  average, across  the timeframe  FY21 through                                                                    
FY29, so the  state had $600 million less  coming in through                                                                    
the traditional revenue streams. She  said that the red line                                                                    
was based on  $40/bbl. She stated that the  current price of                                                                    
oil  hovered close  to $35/bbl.  She  relayed that  assuming                                                                    
$35/bbl oil on  an inflation adjusted basis  would result in                                                                    
$700   million   less;   approximately   $1.2   billion   in                                                                    
traditional revenue.                                                                                                            
                                                                                                                                
4:09:16 PM                                                                                                                    
                                                                                                                                
Ms. Pitney  discussed Slide  3, "POMV  "Revenue, FY19-FY29,"                                                                    
which showed  a line graph.  She explained that POMV  took 5                                                                    
percent of  the permanent  fund value  on annual  basis. She                                                                    
related that  the POMV was  calculated by only  drawing from                                                                    
the  fund  the  amount  that,  over  time,  the  fund  could                                                                    
continue to grow at inflation,  so the fund value was strong                                                                    
for  future generations.  She said  that at  this point  the                                                                    
state had  $2.9 billion from  the POMV in FY19.  She relayed                                                                    
that  the effects  of the  market were  delayed in  the POMV                                                                    
because it  was on  a 5-year rolling  average. At  the peak,                                                                    
the state  would have $400  million less than  expected from                                                                    
the  fall revenue  source. She  discussed the  slow recovery                                                                    
scenario:                                                                                                                       
                                                                                                                                
     Slow  recovery:  FY20  ending  balance  matches  actual                                                                  
     balance  as of  3/19/20.  No growth  in  FY21, then  10                                                                    
     percent  growth for  5-years,  then  7 percent  growth.                                                                    
     Peak impact of $700 million in FY26.                                                                                       
                                                                                                                                
4:11:40 PM                                                                                                                    
                                                                                                                                
Ms.  Pitney reviewed  Slide 4,  "Total Revenue,  FY19-FY29,"                                                                    
which showed a line  graph that combined traditional revenue                                                                    
with the  POMV revenue. She  said that the fall  revenue had                                                                    
been  expected to  be $6  billion by  FY29. She  pointed out                                                                    
that the  red bar  was at 40/bbl  and steady  recovery, plus                                                                    
one draw  with decent returns  thereafter. She noted  the $1                                                                    
billion  dollar difference  at the  peak of  the decline  in                                                                    
FY26. She said that if the  state took an additional year to                                                                    
recover at $35/bbl, the difference  was $1.5 billion less in                                                                    
revenue  per year.  She highlighted  that  revenue would  go                                                                    
from $6 billion  to $4.6 billion in the out  years. She said                                                                    
that  the  amazing  figures was  the  cumulative  impact  on                                                                    
revenue.  Cumulatively, the  gap between  the fall  forecast                                                                    
and the  $40/bbl plus steady  recovery, was a  cumulative $8                                                                    
billion  in  revenue  that  did not  exist  in  the  states                                                                     
revenue  streams from  what was  considered  last fall.  She                                                                    
added that  if oil stayed  at $35/bbl, the  figure increased                                                                    
to $11 billion. She  stressed the significant differences in                                                                    
the states fiscal situation over the last two-week period.                                                                      
                                                                                                                                
4:13:39 PM                                                                                                                    
                                                                                                                                
Ms.  Pitney  showed  Slide 5,  "Scenario  1:  $40/bbl,  POMV                                                                    
impact,   Senate  Finance   Budget   without  Dividend,   no                                                                    
Stimulus,"  which  showed  a   table  using  modest  revenue                                                                    
decline. She  noted that the  slide showed a  modest, steady                                                                    
recovery  of   the  permanent   fund.  The   UGF  assumption                                                                    
reflected a drop from $4.8  billion in 2020, to $4.4 billion                                                                    
in  2022. The  total spending,  not counting  supplementals,                                                                    
was $4.3 billion; there were  $360 million in supplementals.                                                                    
Included  in  last years   spending  was  a $1600  dividend,                                                                    
which totaled  $1.1 billion.  She said  that because  of the                                                                    
drop  in revenue  the division  anticipated  a $728  million                                                                    
draw on  the CBR, after  $142 from  the CBR for  the capital                                                                    
budget, and  $172 million  from the  SBR for  dividends. She                                                                    
relayed that  the year-end balance  (June 30, 2020)  for the                                                                    
CBR  was expected  to be  $1.5 billion.  She furthered  that                                                                    
coming   into  2020   with  the   current  spending   level,                                                                    
additional  capital  budget  items,   and  $100  million  in                                                                    
supplemental  items, the  state  would have  a $300  million                                                                    
deficit  (reflected  on  Line 12)  without  a  dividend  and                                                                    
without any money  towards stimulus. The CBR  would be drawn                                                                    
down  to   under  $1.4   billion.  She   directed  committee                                                                    
attention to Line 18, which  showed the CBR balance for FY20                                                                    
through FY22.  She noted the  ERA balance on Line  20, which                                                                    
was $16  billion in FY20,  dropped to  $12 billion in  FY 21                                                                    
and $10  billion in FY21,  with lower returns into  the ERA.                                                                    
She said that under this  scenario, assuming no stimulus and                                                                    
no  dividend, the  deficit would  be $500  million by  FY22,                                                                    
with a CBR  balance below $1 billion. The  ERA balance would                                                                    
be 8.5 billion.                                                                                                                 
                                                                                                                                
4:16:59 PM                                                                                                                    
                                                                                                                                
Ms. Pitney  referenced Slide 6,  "Scenario 2:  $40/bbl, POMV                                                                    
impact,  Senate Finance  Budget $400/person  Dividend, $100M                                                                    
Stimulus,"  which  showed the  same  table  as the  previous                                                                    
slide  with  the assumption  of  a  $400 dividend  and  $100                                                                    
million in  stimulus. She relayed  that under  the scenario,                                                                    
FY 20  remained the same,  FY21 brought the deficit  to $700                                                                    
million and  the CBR was  drawn below $1 billion.  She noted                                                                    
that there  were no additional  draws to the ERA  beyond the                                                                    
POMV. She  said that in FY22  there would be a  $500 million                                                                    
deficit, before  dividends or stimulus,  which drew  the CBR                                                                    
under $600 million.                                                                                                             
                                                                                                                                
Ms.  Pitney  explained  that  given   the  tight  cash  flow                                                                    
arrangement,  drawing  the  CBR  below  $600  million  would                                                                    
require  another  cash  flow solution  for  the  state.  She                                                                    
thought that the  $563 million was as low as  the CBR should                                                                    
drop unless  another source of  cash flow for the  state was                                                                    
discovered.                                                                                                                     
                                                                                                                                
4:18:43 PM                                                                                                                    
                                                                                                                                
Ms.  Pitney discussed  Slide 7,  "Scenario 3:  $40/bbl, POMV                                                                    
impact, Senate  Finance Budget $1000/person  Dividend, $300M                                                                    
Stimulus," which showed  the same table as  the previous two                                                                    
slides,  but  with a  $1000  dividend  and $300  million  in                                                                    
stimulus. This  scenario would result  in a deficit  of $1.2                                                                    
billion, which would  draw the CBR down to  $600 million and                                                                    
would require  an ad hoc draw  from the ERA. The  draw could                                                                    
be $276  million   at $40/bbl.  She pointed out that  in the                                                                    
next year,  with no  dividend and  no stimulus,  the deficit                                                                    
would be  $500 million and  because the CBR was  drawn down,                                                                    
another ad hoc draw would be required on the ERA.                                                                               
                                                                                                                                
Ms.  Pitney explained  that for  every billion  dollars draw                                                                    
out of  the ERA, future  annual POMV revenue was  reduced by                                                                    
$50 million. Future  cash flows would be reduced,  on top of                                                                    
what was  going to happen  due to  the market and  oil price                                                                    
crash.                                                                                                                          
                                                                                                                                
4:20:32 PM                                                                                                                    
                                                                                                                                
Senator Hoffman asked Ms. Pitney to review the deposits on                                                                      
Line 14.                                                                                                                        
                                                                                                                                
Ms.  Pitney   explained  that  the   deposits  on   Line  14                                                                    
represented oil  tax settlements. She relayed  that the $235                                                                    
million  was  the  amount  already  received  in  FY20,  the                                                                    
additional  numbers were  estimates based  on Department  of                                                                    
Revenues forecast.                                                                                                              
                                                                                                                                
4:21:30 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:23:11 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Stedman informed the public that the committee                                                                         
would now take up amendments on the operating budget.                                                                           
                                                                                                                                
Co-Chair Stedman MOVED to ADOPT Amendment 1 (copy on file):                                                                     
                                                                                                                                
     DEPARTMENT:    DCCED                                                                                                       
     APPROPRIATION: AIDEA                                                                                                       
     ALLOCATION:    AIDEA                                                                                                       
                                                                                                                                
     RESTORE: $110.3 AIDEA Receipts (code 1102)                                                                                 
                                                                                                                                
     EXPLANATION:   Corrects funding inadvertently removed                                                                      
                                                                                                                                
     DEPARTMENT:    LAW                                                                                                         
                                                                                                                                
     APPROPRIATION: Civil Division                                                                                              
                                                                                                                                
     ALLOCATION:    Labor and State Affairs                                                                                     
                                                                                                                                
     DELETE:   $400.0 UGF                                                                                                       
                                                                                                                                
     ADD INTENT:  It is the  intent of the  legislature that                                                                    
     when  making reductions  to outside  counsel contracts,                                                                    
     the department  use staff instead of  outside contracts                                                                    
     whenever possible;  and the department should  not make                                                                    
     reductions to  contracts if the contract  is a possible                                                                    
     revenue generator.                                                                                                         
                                                                                                                                
Co-Chair Stedman OBJECTED for discussion.                                                                                       
                                                                                                                                
PETE ECKLUND, STAFF, SENATOR BERT STEDMAN, spoke to                                                                             
Amendment 1, which he described as a technical clean-up                                                                         
amendment.                                                                                                                      
                                                                                                                                
Co-Chair Stedman WITHDREW his OBJECTION. There being NO                                                                         
further OBJECTION, Amendment 1 was ADOPTED.                                                                                     
                                                                                                                                
4:25:12 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman MOVED to ADOPT Amendment 2 (copy on file):                                                                     
                                                                                                                                
     Agency: Environmental Conservation                                                                                         
                                                                                                                                
     Project:                                                                                                                   
                                                                                                                                
     Village Safe Water and Wastewater Infrastructure                                                                           
     Projects                                                                                                                   
                                                                                                                                
     Village Safe Water and Wastewater Infrastructure                                                                           
     Projects: Expansion, Upgrade. and Replacement of                                                                           
     Existing Service                                                                                                           
                                                                                                                                
     Amount:                                                                                                                    
                                                                                                                                
     $20.900,000 Federal Receipts (1002)                                                                                        
     $4.832.000 GF/Match (1003)                                                                                                 
     $200.000 Stat Desig (1108)                                                                                                 
                                                                                                                                
     Village Safe Water and Wastewater Infrastructure                                                                           
     Projects: First Time Service Projects                                                                                      
                                                                                                                                
     Amount:                                                                                                                    
                                                                                                                                
     $31,350.000 Federal Receipts (1002)                                                                                        
     $7.248.000 OF/Match (1003}                                                                                                 
     $300.000 Statutory Designated Program Receipts (1108)                                                                      
                                                                                                                                
                                                                                                                                
    Agency: Commerce, Community & Economic Development                                                                          
                                                                                                                                
     Project:                                                                                                                   
                                                                                                                                
     Alaska Energy Authority - Rural Power Systems Upgrades                                                                     
                                                                                                                                
     Amount:                                                                                                                    
     $12,500.000 Federal Receipts (1002)                                                                                        
     $5,000,000 Unrestricted General Funds (1004)                                                                               
                                                                                                                                
     APPROPRIATION: National Petroleum Reserve                                                                                  
                                                                                                                                
     ADD: NATIONAL PETROLEUM RESERVE - ALASKA IMPACT                                                                            
     GRANT  PROGRAM. The  amount  received  by the  National                                                                    
     Petroleum  Reserve-Alaska  special   revenue  fund  (AS                                                                    
     37.05.530(a))  under 42  U.S.C. 6506a(l)  or former  42                                                                    
     U.S.C.  6508  by August  31,    2020, estimated  to  be                                                                    
     $13,100,000,  is appropriated  from  that  fund to  the                                                                    
     Department   of  Commerce,   Community,  and   Economic                                                                    
     Development  for  capital   project  grants  under  the                                                                    
     National  Petroleum  Reserve   -  Alaska  impact  grant                                                                    
     program.                                                                                                                   
                                                                                                                                
     EXPLANATION:   Fund   the   NPRA  receipts,   per   the                                                                    
     Governor's requested level.                                                                                                
                                                                                                                                
Co-Chair Stedman OBJECTED for discussion.                                                                                       
                                                                                                                                
Mr.   Ecklund  explained   that   Amendment   2  had   three                                                                    
components. The  first part  would add  the water  and sewer                                                                    
projects  across  the  state.  The  second  part  would  add                                                                    
funding for rural power system  upgrade to DECCED. The third                                                                    
was $13.1 million for the  National Petroleum Reserve Alaska                                                                    
Impact Grant Program.                                                                                                           
                                                                                                                                
Co-Chair Stedman WITHDREW his OBJECTION.                                                                                        
                                                                                                                                
4:26:45 PM                                                                                                                    
                                                                                                                                
Senator Olson stated that there  was a name missing from the                                                                    
list of co-sponsors on the amendment.                                                                                           
                                                                                                                                
Senator Bishop wanted  to be a co-sponsor  of the amendment,                                                                    
as well as Senator Wielechowski and Senator Wilson.                                                                             
                                                                                                                                
There being NO further OBJECTION, Amendment 2 was ADOPTED.                                                                      
                                                                                                                                
4:27:32 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  MOVED to ADOPT Amendment  3, 31-GH2197\O.4                                                                    
(Bruce, 3/21/20) (copy on file):                                                                                                
                                                                                                                                
     Page 74, following line 23:                                                                                                
     Insert a new subsection to read:                                                                                           
     "(d) The  sum of $680,000,000 is  appropriated from the                                                                    
     general  fund to  the dividend  fund (AS  43.23.045(a))                                                                    
     for the payment of permanent fund dividends and for                                                                        
     administrative and associated costs for the fiscal                                                                         
     year ending June 30, 2021."                                                                                                
                                                                                                                                
     Reletter the following subsection accordingly.                                                                             
                                                                                                                                
     Page 97, lines 29 - 30:                                                                                                    
     Delete "secs. 21(a), (b), and (d)"                                                                                         
     Insert "secs. 2l(a), (b), (d), and (e)"                                                                                    
                                                                                                                                
Co-Chair Stedman OBJECTED for discussion.                                                                                       
                                                                                                                                
Mr. Ecklund explained that the  purpose of the amendment was                                                                    
to pay a $1000 dividend in October.                                                                                             
                                                                                                                                
Co-Chair  Stedman  understood  that each  qualified  Alaskan                                                                    
would receive a $1000 dividend.                                                                                                 
                                                                                                                                
Co-Chair  von Imhof  OJBECTED. She  believed  that paying  a                                                                    
large   dividend   at   this  point   had   serious   fiscal                                                                    
consequences.  She  asserted that  the  focus  should be  on                                                                    
paying   stimulus  money   and  Covid-19   associated  money                                                                    
directly  to  the  people  who  truly  needed  it  for  food                                                                    
security, energy assistance, and supplemental UI benefits.                                                                      
                                                                                                                                
Senator  Wielechowski   thought  the  amount   was  woefully                                                                    
inadequate. He  said that  people have  been ordered  out of                                                                    
work and  he supported  the recently passed  UI legislation.                                                                    
He  lamented   that  Alaska  had  the   lowest  unemployment                                                                    
replacement wage  in the country.  He argued that  the $1000                                                                    
dollars was far  below what was required in  statute and was                                                                    
inadequate   for    the   current   crisis    Alaskan   were                                                                    
experiencing.                                                                                                                   
                                                                                                                                
Senator Bishop  agreed with Senator  Wielechowski's comments                                                                    
- to  a point. He was  afraid the proposed dividend  was the                                                                    
last  one  Alaskans   would  receive for  a  while.  He  was                                                                    
concerned that  future generations would not  benefit in the                                                                    
same was as past and current generations.                                                                                       
                                                                                                                                
4:30:34 PM                                                                                                                    
                                                                                                                                
Senator Olson  lamented that businesses were  losing revenue                                                                    
and families  continued to  have expenses  to pay.  He found                                                                    
that the  dividend amount was  wanting but was a  good first                                                                    
step in getting money to Alaskans.                                                                                              
                                                                                                                                
Co-Chair Stedman WITHDREW his OBJECTION.                                                                                        
                                                                                                                                
Co-Chair von Imhof MAINTAINED her OBJECTION.                                                                                    
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Hoffman, Wilson, Olson, Stedman                                                                                       
OPPOSED: Bishop, Wielechowski, von Imhof                                                                                        
                                                                                                                                
The MOTION  PASSED (4/3). There being  NO further OBJECTION,                                                                    
Amendment 3 was ADOPTED.                                                                                                        
                                                                                                                                
4:32:02 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:34:12 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Stedman   stated  that  there  was   a  conceptual                                                                    
amendment brought to the committee by Senator Wielechowski.                                                                     
                                                                                                                                
Senator Wielechowski MOVED to ADOPT Conceptual Amendment 4:                                                                     
                                                                                                                                
     An emergency  PFD of $1,000 payable  to each individual                                                                    
     who  is  eligible  to receive  a  2020  Permanent  Fund                                                                    
     Dividend to  be appropriated from the  Earnings Reserve                                                                    
     Account to the dividend fund payable on June 15, 2020.                                                                     
                                                                                                                                
Co-Chair Stedman OBJECTED for discussion.                                                                                       
                                                                                                                                
Co-Chair  Stedman summarized  that the  conceptual amendment                                                                    
was  for an  additional $1000  dividend from  the ERA  to be                                                                    
paid out June 15, 2020.                                                                                                         
                                                                                                                                
Senator  Wielechowski offered  rationale for  the amendment.                                                                    
He  explained   that  the  COVID-19  virus   had  caused  an                                                                    
unprecedented  unemployment, which  was  not  likely to  end                                                                    
soon. The  conceptual amendment would provide  a payment out                                                                    
of the ERA for every man,  woman, and child who was eligible                                                                    
for a  2020 dividend. He was  worried for the people  in his                                                                    
district, in  which there were  many low-income  people that                                                                    
worked in  restaurants, hotels,  gyms, and  were struggling.                                                                    
He thought  the amount of  money in the amendment  was small                                                                    
considering the magnitude of the  crisis. He expressed great                                                                    
concern  for the  financial hardships  and suffering  of the                                                                    
people of Alaska.                                                                                                               
                                                                                                                                
4:37:55 PM                                                                                                                    
                                                                                                                                
Senator Wilson  asked whether the  amendment applied  to the                                                                    
2020 application process.                                                                                                       
                                                                                                                                
Co-Chair Stedman stated in the affirmative.                                                                                     
                                                                                                                                
Senator  Wielechowski thought  the amendment  was better  to                                                                    
base off  the applicants  that were due  by March  31, 2020.                                                                    
                     th                                                                                                         
Giving until  June 15   would allow  a determination  of who                                                                    
was legitimately eligible.                                                                                                      
                                                                                                                                
4:38:59 PM                                                                                                                    
                                                                                                                                
Co-Chair  von  Imhof  asked Senator  Wielechowski  to  check                                                                    
whether  the governor  had extended  the application  period                                                                    
for a PFD.                                                                                                                      
                                                                                                                                
Senator Wielechowski stated if  there had been an extension,                                                                    
he would be happy to amend his amendment.                                                                                       
                                                                                                                                
4:39:41 PM                                                                                                                    
                                                                                                                                
Senator Olson  believed that the communities  he represented                                                                    
could use the additional funds sooner rather than later.                                                                        
                                                                                                                                
Co-Chair  Stedman  thought  there  was clearly  a  need  for                                                                    
relief  for  citizens  across  the  state.  He  thought  the                                                                    
federal   government  was   targeting  May   and  June   for                                                                    
assistance. He considered that the  severity of the economic                                                                    
downturn could  extend into  2021. He  did not  believe that                                                                    
the virus  and its effects  would only last  several months.                                                                    
He  felt  that the  severity  of  the  draw to  support  the                                                                    
amendment was not prudent at this time.                                                                                         
                                                                                                                                
Co-Chair Stedman MAINTAINED his OBJECTION.                                                                                      
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Wilson, Olson, Wielechowski                                                                                           
OPPOSED: Hoffman, Bishop, von Imhof, Stedman                                                                                    
                                                                                                                                
The MOTION to adopt Conceptual Amendment 4 FAILED (3/4).                                                                        
                                                                                                                                
4:43:21 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:43:41 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Stedman  checked  in  with  committee  members  to                                                                    
determine whether  anyone needed further explanation  of the                                                                    
amendments.                                                                                                                     
                                                                                                                                
Co-Chair von Imhof MOVED to  report SCS CSHB 205(FIN) out of                                                                    
Committee  with individual  recommendations. There  being NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
SCS CSHB  205(FIN) was  REPORTED out  of committee  with two                                                                    
"do pass" recommendations and five "amend" recommendations.                                                                     
                                                                                                                                
Co-Chair Stedman explained that the  bill would move next to                                                                    
the Senate  Rules Committee  and then it  would move  to the                                                                    
Senate Floor.                                                                                                                   
                                                                                                                                
4:45:29 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:47:45 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Stedman relayed  that  there would  be  a 9:00  am                                                                    
meeting  the following  morning,  but he  expected a  delay.                                                                    
There  was  a  floor   session  scheduled  for  11:00am.  He                                                                    
anticipated the  committee would  meet at  1 PM.  He thanked                                                                    
everyone for coming to work  on a Saturday and stressed that                                                                    
the committee was  on an expedited schedule to  get ahead of                                                                    
the virus and keep people safe.                                                                                                 
                                                                                                                                
ADJOURNMENT                                                                                                                   
4:48:40 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 4:48 p.m.                                                                                          

Document Name Date/Time Subjects
HB 308 Work Draft v. U.pdf SFIN 3/21/2020 9:00:00 AM
HB 308
032120 LFD HB 205 Presentation SFIN .pdf SFIN 3/21/2020 9:00:00 AM
HB 205
HB 308 Work Draft v. U Explanation of Changes.pdf SFIN 3/21/2020 9:00:00 AM
HB 308