Legislature(2021 - 2022)SENATE FINANCE 532

04/30/2021 09:00 AM Senate FINANCE

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09:03:00 AM Start
09:03:46 AM SB49 || SB50
09:03:47 AM University of Alaska Subcommittee of the Whole Budget Close-out
09:06:48 AM Office of Management and Budget (omb) All Supplemental Requests: Operating and Capital
09:56:08 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled: TELECONFERENCED
Heard & Held
Heard & Held
                 SENATE FINANCE COMMITTEE                                                                                       
                      April 30, 2021                                                                                            
                         9:03 a.m.                                                                                              
9:03:00 AM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Bishop called the Senate Finance Committee meeting                                                                     
to order at 9:03 a.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Senator Click Bishop, Co-Chair                                                                                                  
Senator Natasha von Imhof                                                                                                       
Senator David Wilson                                                                                                            
Senator Bill Wielechowski (via teleconference)                                                                                  
Senator Donny Olson (via teleconference)                                                                                        
MEMBERS ABSENT                                                                                                                
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Lyman Hoffman                                                                                                           
ALSO PRESENT                                                                                                                  
Tim Grussendorf, Staff, Senate Finance Committee; Neil                                                                          
Steininger, Director, Office of Management and Budget,                                                                          
Office of the Governor.                                                                                                         
SB 49     APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
          SB 49 was HEARD and HELD in committee for further                                                                     
SB 50     APPROP: CAP; REAPPROP; SUPP; AMEND                                                                                    
          SB 50 was HEARD and HELD in committee for further                                                                     
UNIVERSITY OF ALASKA SUBCOMMITTEE OF THE WHOLE BUDGET                                                                           
SENATE BILL NO. 49                                                                                                            
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs;    capitalizing   funds;   amending                                                                    
     appropriations;    making   reappropriations;    making                                                                    
     supplemental   appropriations;  making   appropriations                                                                    
     under art.  IX, sec.  17(c), Constitution of  the State                                                                    
     of  Alaska,  from  the  constitutional  budget  reserve                                                                    
     fund; and providing for an effective date."                                                                                
SENATE BILL NO. 50                                                                                                            
     "An  Act   making  appropriations,   including  capital                                                                    
     appropriations,     reappropriations,     and     other                                                                    
     appropriations;  making   supplemental  appropriations;                                                                    
     making   appropriations   to  capitalize   funds;   and                                                                    
     providing for an effective date."                                                                                          
9:03:46 AM                                                                                                                    
^UNIVERSITY  OF  ALASKA  SUBCOMMITTEE OF  THE  WHOLE  BUDGET                                                                  
9:03:47 AM                                                                                                                    
TIM GRUSSENDORF, STAFF,  SENATE FINANCE COMMITTEE, explained                                                                    
the narrative associated with the  University of Alaska (UA)                                                                    
Subcommittee.  The proposal  included general  funds in  the                                                                    
amount  of  $577,788,000; federal  funds  in  the amount  of                                                                    
$137,225,000; and other funds  in the amount of $75,116,000.                                                                    
There were  only two action  items. The first  restored half                                                                    
of  the  governor's  $20  million  reduction  to  UA's  main                                                                    
campuses. The second action was  the denial of the structure                                                                    
consolidation retaining  the FY 21 status  quo. He concluded                                                                    
the committee's recommendations.                                                                                                
Senator von Imhof  MOVED the FY 22 operating  budget for the                                                                    
University  of Alaska  from subcommittee  with the  attached                                                                    
legislative  finance  reports:   Agency  Total;  Transaction                                                                    
Compare  FY   22  Adjusted  Base  to   Senate  Subcommittee;                                                                    
Transaction   Compare    Governor's   Amended    to   Senate                                                                    
Subcommittee. The Legislative  Finance Division was directed                                                                    
to make any appropriate or conforming technical changes.                                                                        
There being NO OBJECTION, it was so ordered.                                                                                    
Senator Wilson  thanked Senator Hoffmann  and his  staff for                                                                    
preparing the report and all  their work in subcommittee. He                                                                    
would have some questions  for the University regarding some                                                                    
of  the  Coronavirus  Aid,  Relief,  and  Economic  Security                                                                    
(CARES)  Act funding  and  how it  would  coincide with  the                                                                    
additional reduction in the governor's amended proposal.                                                                        
Co-Chair Bishop  adjourned the finance subcommittee  for the                                                                    
University of Alaska.                                                                                                           
^OFFICE  OF MANAGEMENT  and  BUDGET  (OMB) ALL  SUPPLEMENTAL                                                                  
REQUESTS: OPERATING and CAPITAL                                                                                               
9:06:48 AM                                                                                                                    
Co-Chair  Bishop invited  Mr.  Steininger  to the  testifier                                                                    
table  and  asked him  to  walk  the committee  through  the                                                                    
action  items.   He  noted   Senator  Wielechowski   was  in                                                                    
attendance online.                                                                                                              
NEIL STEININGER, DIRECTOR, OFFICE  OF MANAGEMENT AND BUDGET,                                                                    
OFFICE  OF  THE  GOVERNOR,  noted the  committee  had  three                                                                    
spreadsheets before  them. He would begin  with the document                                                                    
titled, "Supplemental  Operating Items"  (copy on  file). He                                                                    
would  be   reviewing  the  various   supplemental  requests                                                                    
encompassed   in  different   vehicles  introduced   by  the                                                                    
governor  including the  fast track  supplemental bill,  the                                                                    
operating budget bill, the capital  budget bill, the regular                                                                    
supplemental bill,  and the American Rescue  Plan Act (ARPA)                                                                    
bill.  He further  explained that  because the  supplemental                                                                    
requests were  spread across several pieces  of legislation,                                                                    
he thought  it would be  helpful to  put them together  in a                                                                    
Mr.  Steininger  noted  that  some   of  the  items  on  the                                                                    
spreadsheet were highlighted reflecting  items new since the                                                                    
previous Office of Management  and Budget (OMB) presentation                                                                    
on supplemental items.  The items in white  had already been                                                                    
presented to the  committee. If there were  any questions on                                                                    
them, he was happy to respond.                                                                                                  
Mr. Steininger  turned to page  1, item 1.  The supplemental                                                                    
request  would  replace  interagency receipts  to  cover  an                                                                    
anticipated  shortfall  in  the Division  of  Personnel  and                                                                    
Labor  Relations.  It would  offset  the  increased cost  to                                                                    
other agencies  of bi-weekly payroll.  Item 2  was technical                                                                    
in nature  within the  Department of  Administration's (DOA)                                                                    
Risk   Management  Division.   It   would   allow  for   the                                                                    
implementation of  statutory language that  deposited excess                                                                    
general  funds   into  the  catastrophic  reserve   fund  to                                                                    
maintain  a  balance  of  $5  million.  Item  3  within  the                                                                    
Department of  Commerce, Community and  Economic Development                                                                    
(DCCED)  in  the  Division   of  Business  and  Professional                                                                    
Licensing  was  $411,000  to   offset  revenue  deficits  in                                                                    
professional  licensing   programs  as   a  result   of  the                                                                    
suspension of  fee increases. He  noted that  the suspension                                                                    
of  fee  increases  made  the  COVID-related  shortfall  not                                                                    
eligible for the ARPA revenue offsets.                                                                                          
Mr. Steininger continued to item  4 within the Department of                                                                    
Education and  Early Development (DEED).  There was a  FY 21                                                                    
supplemental  request  to  address the  Division  of  School                                                                    
Finance  and  Facilities.  The  division  was  inadvertently                                                                    
short-funded   with   the   veto   of   school   bond   debt                                                                    
reimbursement. Item  5 reflected  a reduction in  the Alaska                                                                    
Technical  Vocational   Education  Program   (TVEP)  funding                                                                    
within  DEED.  He  indicated the  document  contained  other                                                                    
items  related to  TVEP  funding. He  pointed  out that  for                                                                    
every TVEP impact there would  be 2 items because initially,                                                                    
the  projection of  TVEP funding  and the  needed adjustment                                                                    
was projected then revised at a later date.                                                                                     
Mr.  Steininger moved  to item  7 within  the Department  of                                                                    
Environmental Conservation  (DEC) in  the amount  of $70,000                                                                    
resulting from  a delayed  energy efficiency  project. There                                                                    
was a one-time  cost to ensure that the  department would be                                                                    
able  to meet  needs as  the energy  efficiency project  was                                                                    
brought  online.  Item  8  would  accommodate  unanticipated                                                                    
legal expenditures for the  Division of Environmental Health                                                                    
within DEC  in the amount  of $120,000.  Item 9 was  for the                                                                    
replacement of  commercial passenger vessel  compliance fees                                                                    
for  shellfish testing.  He added  that there  was a  column                                                                    
included in  the spreadsheet that  noted the  House's action                                                                    
He highlighted  that item 9  noted that it was  not included                                                                    
in the House Committee  Substitute, however, the spreadsheet                                                                    
had not been updated for actions  taken in the prior day. It                                                                    
had been addressed through the amendment process.                                                                               
9:10:47 AM                                                                                                                    
Mr. Steininger moved to page 2,  item 10. The item would pay                                                                    
for  other unanticipated  legal expenses  within DEC  in the                                                                    
amount of approximately  $240,000. Item 11 in  the amount of                                                                    
$590,000 undesignated  general funds (UGF) would  be used to                                                                    
match  additional   federal  receipts  the   state  received                                                                    
through  the  Help America  Vote  Act  for the  Division  of                                                                    
Elections.  Item  12 within  the  Office  of Management  and                                                                    
Budget was language  allowing the use of  lapsing funds from                                                                    
the   prior  fiscal   year   to   ensure  stabilization   of                                                                    
interagency  charge-back rates.  Item 13,  related to  Adult                                                                    
Public  Assistance within  Department of  Health and  Social                                                                    
Services (DHSS),  would help  maintain benefit  payments for                                                                    
the  Adult  Public  Assistance  Program  (the  MOE  for  the                                                                    
Medicaid Program) in the amount of $1.2 million.                                                                                
Mr.  Steininger  continued  to  item 14  in  the  amount  of                                                                    
$6 million for  the Alaska Psychiatric Institute  to support                                                                    
client services.  Item 15 was  a language item  allowing for                                                                    
the  use  of lapsing  Medicaid  funds  to  cover the  FY  22                                                                    
Medicaid budget.  It would  allow for a  tapering down  to a                                                                    
lower  level. Item  16 was  an adjustment  to the  Permanent                                                                    
Fund Dividend  (PFD) and hold  harmless program  that worked                                                                    
in  concert with  the proposal  to  complete the  FY 21  PFD                                                                    
payment. Item  17 within DHSS  for subsidized  adoptions and                                                                    
guardianships reflected  an increased  need in  adoption and                                                                    
guardianship subsidies.  Item 18 within Department  of Labor                                                                    
and  Workforce   Development  (DOL)   was  for   the  Alaska                                                                    
Vocational  Technical Education  Center  (AVTEC) to  provide                                                                    
operational  support for  COVID revenue  shortfalls. It  had                                                                    
been  proposed  using  Alaska  Housing  Capital  Corporation                                                                    
Mr. Steininger reported  that item 19 and item 20  had to do                                                                    
with TVEP  funding adjustments.  Item 20  was listed  at the                                                                    
top  of  page  3.  Item  21  and  item  22  were  also  TVEP                                                                    
adjustments.  Item 23  within the  Department of  Law was  a                                                                    
$4 million multi-year  appropriation for  statehood defense.                                                                    
Item  24  within the  Department  of  Military and  Veterans                                                                    
Affairs  (DMVA) was  $1.2 million  in  federal receipts  for                                                                    
facility maintenance.  Item 25  had not been  brought before                                                                    
the  committee  previously.  The item  reflected  designated                                                                    
program receipts for the  Alaska Housing Finance Corporation                                                                    
(AHFC)  which  would  allow them  to  assist  other  outside                                                                    
entities  in managing  housing  programs  funded with  COVID                                                                    
relief  dollars.  Item 26  provided  authority  for AHFC  to                                                                    
manage the  housing programs directly  granted to  the State                                                                    
of Alaska.                                                                                                                      
Mr. Steininger continued to item  27 which was an adjustment                                                                    
to investment management fees for  the Alaska Permanent Fund                                                                    
Corporation  (APFC).  Item  28 was  a  department-wide  risk                                                                    
management  position for  the Department  of Revenue  (DOR).                                                                    
Item 29  had not been  before the committee. It  fell within                                                                    
Department  of Transportation  and  Public Facilities  (DOT)                                                                    
for $331,000 to address an  extreme winter weather even that                                                                    
occurred  in  the Northern  Region.  Items  30 and  31  were                                                                    
additional TVEP  adjustments. Item 31 was listed  at the top                                                                    
of page 4.                                                                                                                      
Mr.  Steininger  continued  to  address  items  on  page  4.                                                                    
Item 32  was a  deposit  of $30  million  into the  Disaster                                                                    
Relief   Fund.   The   source   of   the   funding   was   a                                                                    
reappropriation  of  $90   million  UGF  and  Constitutional                                                                    
Budget Reserve  (CBR) monies appropriated to  COVID response                                                                    
that ended  up not being needed  due to the amount  of money                                                                    
the state received from the  federal government. Item 33 was                                                                    
a  deposit of  repealed  capital projects  into the  Capital                                                                    
Income  Fund.  The  funds  were  used  to  support  deferred                                                                    
maintenance programs elsewhere in  the state budget. Item 34                                                                    
was the completion of the payment for the FY 21 PFD.                                                                            
9:15:42 AM                                                                                                                    
Mr. Steininger continued  to highlight the items  on page 4.                                                                    
Item  35  was a  technical  adjustment  to language  on  the                                                                    
distribution  of cruise  ship head  tax receipts.  The wrong                                                                    
year  was  referenced and  in  updating  the year,  he  also                                                                    
updated the  estimate to reflect  the dramatic  reduction in                                                                    
collections.  Items   36  and  37   represented  judgements,                                                                    
settlements,  and  claims against  the  state.  Item 38  was                                                                    
another settlement  against the state, the  Morse Settlement                                                                    
- the  Disability Law Center  of Alaska, Inc.  Judgement and                                                                    
Settlement  (FY  21-FY 22).  It  was  separated out,  as  it                                                                    
funded  appropriations  within  DHSS. It  was  different  in                                                                    
nature  than the  normal judgement  or settlement.  Next, he                                                                    
would address  the document  titled:   "Supplemental Capital                                                                    
Senator  Wilson  referred  to  items   25  and  26  for  the                                                                    
additional  receipt  authority for  AHFC.  He  asked if  the                                                                    
items  were  pass-through items  or  if  they reflected  the                                                                    
recouperation of administrative fees incurred by AHFC.                                                                          
Mr. Steininger  did not believe  there would  be significant                                                                    
administrative costs  taken out  by AHFC.  He was  unsure of                                                                    
the exact  cost of administering  the program. He  was aware                                                                    
that AHFC  worked with outside entities  who received monies                                                                    
but did  not have the  capacity to run the  programs. Alaska                                                                    
Housing  Finance Corporation  had the  capacity to  run both                                                                    
their own program and other  outside programs. He would have                                                                    
to  report   back  to  the   committee  regarding   how  the                                                                    
administrative costs were being covered.                                                                                        
Senator  Wielechowski requested  a  detailed  list of  legal                                                                    
Mr.  Steininger assumed  Senator Wielechowski  was referring                                                                    
to the judgements  and settlements listed in  the packet. He                                                                    
agreed to provide  the information. He added  that DEC legal                                                                    
costs related to an enforcement  case against a public water                                                                    
system  owner/operator   were  significantly   greater  than                                                                    
normal.  The Department  of Environmental  Conservation also                                                                    
had  multiple large  permit issues  for pollution  discharge                                                                    
exceeding the normal costs paid to the Department of Law.                                                                       
Co-Chair  Bishop  directed  Mr. Steininger  to  address  the                                                                    
supplemental capital items.                                                                                                     
9:19:12 AM                                                                                                                    
Mr.  Steininger addressed  the  spreadsheet  related to  the                                                                    
supplemental capital items. Item 1  within DOA in the amount                                                                    
of  $230,000 was  for a  system server  replacement for  the                                                                    
retirement  system.   Item  2  within  DCCED   was  for  the                                                                    
Electrical Emergencies  Program. Item 3, also  within DCCED,                                                                    
was an  adjustment to  the Natural  Petroleum Reserve-Alaska                                                                    
(NPRA) Grant  Program. Item  4 in the  amount of  $2,300 was                                                                    
for  the Blood  Bank of  Alaska. The  source of  funding was                                                                    
from  license  plate  fees when  people  purchase  specialty                                                                    
license plates. Item  5 was a community  block grant program                                                                    
within  DCCED.  The  department  received  additional  COVID                                                                    
relief funding  from the federal  government. Item  6 within                                                                    
DEED  was for  a statewide  school capital  funding forecast                                                                    
database in  the amount  of $240,000  from the  school fund.                                                                    
The purpose  of the database  was to track the  condition of                                                                    
school facilities.                                                                                                              
Mr. Steininger addressed  item 7 from the school  fund for a                                                                    
Mount  Edgecombe   High  School   Master  Plan   update  for                                                                    
$330,000.  Items 8  and 9  were for  the Village  Safe Water                                                                    
Program  within  DEC. There  had  been  an increase  in  the                                                                    
amount of  federal receipts  available which  required match                                                                    
funding. The  department had  adequate authority  to receive                                                                    
the federal receipts but needed matching funds.                                                                                 
Co-Chair Bishop asked how much  the department had in excess                                                                    
federal dollars.                                                                                                                
Mr.  Steininger would  get back  to the  committee with  the                                                                    
total  amount   available  in  federal  receipts   from  old                                                                    
9:21:45 AM                                                                                                                    
Mr. Steininger  continued to item  10 within  the Department                                                                    
of  Fish  and  Game  (DFG) for  the  Sportfish  Recreational                                                                    
Boating  and  Angler Access  Program.  He  noted there  were                                                                    
several items  in the supplemental capital  budget that were                                                                    
normal  and  recurring but  were  left  off  at the  end  of                                                                    
session  in   the  prior  year  because   of  the  truncated                                                                    
timeline. Item  11 within DFG  in the amount of  $500,00 was                                                                    
for facility,  vessel, and aircraft maintenance.  Item 12 in                                                                    
the amount of  $7.7 million in federal receipts  was for the                                                                    
Pacific Salmon Treaty Chinook Fishery Mitigation.                                                                               
Mr. Steininger turned to page  3 of the supplemental capital                                                                    
items.  He  looked  at  item  13  within  DFG  for  wildlife                                                                    
management, research,  and hunting  access. It was  a normal                                                                    
annual recurring project.  Item 14 within the  Office of the                                                                    
Governor  was  for  statewide deferred  maintenance  in  the                                                                    
amount  of  $5.9  million.  The money  was  a  request  that                                                                    
normally  appeared  in  the   capital  budget  for  deferred                                                                    
maintenance. Item 3 in the amount  of $3 million was for the                                                                    
general election security due to COVID  -19. The  item might                                                                    
appear  odd  because  the   election  already  occurred.  He                                                                    
explained  that   the  division  utilized   other  available                                                                    
funding  to cover  the need.  However, the  supplemental was                                                                    
necessary to  continue operations  through the  remainder of                                                                    
the  year. Item  16 within  the  Department of  law was  for                                                                    
prosecutor  recruitment  and  housing.  It  reflected  a  $3                                                                    
million  increase to  its operating  budget base  to address                                                                    
sexual assault and domestic violence cases.                                                                                     
Mr.  Steininger moved  to  item  17 within  DMVA  was for  a                                                                    
statewide  roof, envelope,  and fall  protection maintenance                                                                    
program in the amount of  $850,000. Item 18 was for security                                                                    
upgrades at  the Bethel  Readiness Center  in the  amount of                                                                    
$70,000. Item 19 within DMVA  was for the Kotzebue Readiness                                                                    
Center HVAC system life-cycle  replacement of $250,000. Item                                                                    
20  was for  the Bethel  Readiness Center  Water System  for                                                                    
$125,000.   Item   21   was   a   technical   item   and   a                                                                    
reappropriation for DMVA's Alaska  Land Mobile Radio (ALMR).                                                                    
He relayed that ALMR was moved  from DOA to DMVA. There were                                                                    
old capital  projects that  needed to  be reassigned  to the                                                                    
new  department. Item  22 within  the Department  of Natural                                                                    
Resources (DNR)  regarding the  Land and  Water Conservation                                                                    
Land and  Water Conservation Fund Federal  Grant Program was                                                                    
in the  amount of $3.5  million in federal  receipts matched                                                                    
by $900,000 UGF.                                                                                                                
9:25:02 AM                                                                                                                    
Mr. Steininger  continued to page  4. He began with  item 23                                                                    
within DNR for a new  subdivision development within in land                                                                    
sales.  The   amount  was  $750,000  of   state  land  sales                                                                    
receipts.  Item  24  within   DNR  was  for  the  Geological                                                                    
Materials  Center for  multispectral  scanning equipment  in                                                                    
the  amount of  just under  $1.3 million  from a  variety of                                                                    
fund  sources. Item  25  was $49,000  for  Exxon Valdez  oil                                                                    
spill  outreach.  The purpose  of  item  26 was  to  enhance                                                                    
capacity at  the Geological Material  Center. The  amount of                                                                    
$375,000 would be provided by the  entity who was to use the                                                                    
capcity by  leasing space in the  center. Item 27 was  a new                                                                    
item  for   an  assessment  of  Alaska   landslide  hazards,                                                                    
particularly in  Prince William Sound, to  help with warning                                                                    
system  timelines  for  landslides and  resulting  tsunamis.                                                                    
Item  28 within  DOR was  for a  replacement of  one of  the                                                                    
information technology  (IT) systems  that was aged  but ran                                                                    
on the state's mainframe.                                                                                                       
Mr. Steininger continued to item 29  on page 5. The item was                                                                    
a reappropriation  of a  prior year  project for  just under                                                                    
$485,000. The money would be  used by DOR for tax expertise,                                                                    
economic impact  analysis, and legal  analysis of  any newly                                                                    
introduced tax proposals.  Item 30, also within  DOR, was an                                                                    
AHFC  item. There  was $5  million in  federal receipts  for                                                                    
continued  COVID  relief  from the  federal  government  for                                                                    
homelessness.  Item 31  within  DOR was  for  AHFC for  home                                                                    
ownership assistance.  The amount  of federal  funding COVID                                                                    
receipts was $50 million. Item  32 within DOT was just under                                                                    
$6 million  for deferred  maintenance for  public buildings.                                                                    
He explained there  was a specific class  of buildings owned                                                                    
by the  state - generally  office buildings. Item  33 within                                                                    
DOT  was for  decommissioning  a  remediation of  classified                                                                    
injection wells in the amount of $1.7 million.                                                                                  
Co-Chair  Bishop  asked  Mr. Steininger  if  the  state  was                                                                    
getting  to  the  end  of  the  injection  well  remediation                                                                    
project in terms of the state's liability.                                                                                      
Mr.  Steininger relayed  that the  required work  had to  be                                                                    
completed  by  December  31,  2021.  He  could  contact  the                                                                    
department for additional information.                                                                                          
Co-Chair Bishop  noted that the  timeline had  been extended                                                                    
Senator von Imhof  returned to item 31. She  asked about the                                                                    
$50 million for  AHFC homeowner assistance. In  the notes it                                                                    
stated that  it was  part of  ARPA for  2021. She  was aware                                                                    
that there was  a separate ARPA list that  would be reviewed                                                                    
later in  the presentation.  She wondered  why the  item was                                                                    
not included in the ARPA list.                                                                                                  
Mr. Steininger suspected a clerical error.                                                                                      
Senator von Imhof suggested item 31 was on the wrong list.                                                                      
Mr. Steininger  responded that the  item was put  forward in                                                                    
April separate from the ARPA  list because it had additional                                                                    
clarity which  was the  reason it  was put  forward earlier.                                                                    
The other items on the ARPA  list were items included in the                                                                    
ARPA bill.                                                                                                                      
Mr.  Steininger  continued to  item  34.  He explained  that                                                                    
certain capital projects were  completed under budget. There                                                                    
were remaining available funds ($4.3  million) that could be                                                                    
reappropriated back into the general  fund. The same applied                                                                    
for item  35 in the amount  of $1,600 to the  Alaska Capital                                                                    
Income  Fund. Item  36 reflected  remaining available  funds                                                                    
from capital projects  coming in under budget  in the amount                                                                    
of  $8,600 and  going into  the commercial  passenger vessel                                                                    
head  tax account.  The  remaining two  items  were for  the                                                                    
Alaska Court  System and could be  found on page 6.  Item 37                                                                    
was for  court security improvements  in the amount  of just                                                                    
over $1.5 million. Item 38  was for deferred maintenance for                                                                    
court buildings in the amount of just over $1.5 million.                                                                        
9:30:52 AM                                                                                                                    
Mr.  Steininger looked  at the  spreadsheet related  to ARPA                                                                    
(copy on  file) and  included items  in the  governor's ARPA                                                                    
bill.   The  first   section  of   items  were   related  to                                                                    
non-discretionary  programs  -  items  which  came  directly                                                                    
through the  act to specific  state agencies for  a specific                                                                    
purpose.  There might  be  some discretion  in  the way  the                                                                    
funds  were  deployed.  Generally,  the  items  had  federal                                                                    
restrictions on how they were spent.                                                                                            
Mr. Steininger began with item  1 for the National Endowment                                                                    
for the Arts for the Alaska  State Council on the Arts. Item                                                                    
2 was for  the Institute of Museum and  Library Services for                                                                    
library operations  of approximately $2 million.  Item 3 was                                                                    
pass-through  funding to  communities.  The  amount of  $185                                                                    
million  would be  passed through  to communities  and would                                                                    
include  attached discretionary  rules.  Item  4 was  mental                                                                    
health block  grant funding for  the Division  of Behavioral                                                                    
Health in the amount of about  $3 million. Item 5 within the                                                                    
Division  of Behavioral  Health  was  funding for  substance                                                                    
abuse block  grants in  the amount of  $4.7 million.  Item 6                                                                    
was pandemic emergency assistance  of $3.4 million for DHSS.                                                                    
Items 7  and 8  were childcare-related  grants. One  was for                                                                    
childcare stabilization for $45.5  million and the other was                                                                    
for  childhood development  fund  grants  of $28.4  million.                                                                    
Item 9  was the  Low Income  Home Energy  Assistance Program                                                                    
(LIHEAP)  in the  amount of  $23.7 million.  The item  was a                                                                    
grant  for  $1.1 million  for  Women,  Infants and  Children                                                                    
(WIC) benefit improvements. The  funding applied to the cash                                                                    
vouchers  that were  distributed to  beneficiaries. Item  11                                                                    
was   a   pandemic   Electronic  Benefits   Transfer   (EBT)                                                                    
administrative grant in the amount of $768,000.                                                                                 
Co-Chair Bishop asked  if item 11 had to do  with the summer                                                                    
school lunch program.                                                                                                           
Mr. Steininger  responded in the affirmative.  The grant was                                                                    
primarily for the school lunch program.                                                                                         
Mr.  Steininger  continued  to  item 12  in  the  amount  of                                                                    
$22 million for COVID testing. The  money was supposed to be                                                                    
used for testing from the  reopening of schools, rather than                                                                    
general testing. Item 13 in  the amount of $32.4 million was                                                                    
for COVID  vaccinations. Item 14  in the amount  of $290,000                                                                    
was  for child  abuse  prevention. Item  15  was to  support                                                                    
older  Americans  and  their   families  in  the  amount  of                                                                    
$7 million in grant funding.                                                                                                    
Senator Wielechowski  asked if  every student in  the school                                                                    
system would be tested for COVID each week.                                                                                     
Mr. Steininger  replied that the  funding was  for screening                                                                    
and testing  to help  schools reopen. He  was unsure  of the                                                                    
testing specifics. He  could get back to  the committee with                                                                    
additional information.                                                                                                         
9:35:26 AM                                                                                                                    
Mr.  Steininger continued  to item  16 for  higher education                                                                    
emergency  relief  funds  for   AVTEC.  The  amount  totaled                                                                    
$441,000 and  half of the  funding had to be  spent directly                                                                    
on students. Item 17 within  DMVA was $880,000 for emergency                                                                    
management  grants for  the implementation  of the  national                                                                    
preparedness  system. Item  18 for  DOT was  $6 million  for                                                                    
federal transit  administration grants. He  highlighted that                                                                    
the  description   outlined  how   the  funds  were   to  be                                                                    
distributed.  Item 19  for  UA was  $30.8  million from  the                                                                    
Higher Education  Emergency Relief  Fund. Half of  the money                                                                    
had to  be spent  on grants going  directly to  students. He                                                                    
reported that the one  capital non-discretionary program was                                                                    
in  the Department  of Labor  and Workforce  Development and                                                                    
was anticipated to  be $6 million but the  department had to                                                                    
apply  for  the grant.  It  would  be  used to  upgrade  the                                                                    
Unemployment Insurance (UI) program systems.                                                                                    
Senator  von Imhof  asked to  confirm that  items 1-20  were                                                                    
direct  and pass-through  funds. In  other words,  the funds                                                                    
went from  the federal  government to the  various different                                                                    
departments.   The   legislature   had   no   direction   or                                                                    
appropriation  with  the  funding.  She  asked  if  she  was                                                                    
Mr. Steininger  replied that the legislature  had the choice                                                                    
of whether or  not to give the  department receipt authority                                                                    
to  receive  the  direct grants.  However,  the  legislature                                                                    
would  not be  able  to  change the  rules  assigned by  the                                                                    
federal  government in  terms of  how the  funding could  be                                                                    
Senator von  Imhof used item  12 as an example.  She relayed                                                                    
that the legislature could decide  whether DHSS could accept                                                                    
the $22  million. However, it  could not take the  money and                                                                    
divert it somewhere else such as DFG.                                                                                           
Mr. Steininger agreed.                                                                                                          
Senator von Imhof asserted that  the money could not be used                                                                    
to pay a dividend.                                                                                                              
Mr. Steininger agreed.                                                                                                          
Mr. Steininger turned to page  3. He indicated that the next                                                                    
set of supplemental ARPA items  were discretionary in nature                                                                    
giving  the state  significantly  more latitude  in how  the                                                                    
funds   were   deployed   and   used.   Substantial   policy                                                                    
discussions between  the legislature and  the administration                                                                    
were necessary to deploy the  funding. The items listed were                                                                    
initial allocations  providing a  starting place  for policy                                                                    
Co-Chair  Bishop asked  if Senator  Olson had  been able  to                                                                    
join the meeting online.                                                                                                        
Senator  Olson  responded that  he  had  joined the  meeting                                                                    
earlier and had heard the majority of the discussion.                                                                           
9:39:23 AM                                                                                                                    
Mr. Steininger addressed  item 1 which was  an allocation to                                                                    
protect Alaskans in  the areas of health and  other. A total                                                                    
of  $80  million  had  been  allocated for  items  1  and  2                                                                    
combined.  Item  1  was more  general  and  included  health                                                                    
support for  DHSS to continue  some of its  testing programs                                                                    
not  covered  with  the  other  less  discretionary  grants.                                                                    
Item 2  was $6  million for  grants to  sexual abuse,  human                                                                    
trafficking, and domestic violence  organizations. Item 3 in                                                                    
the amount  of $325  million was  for economic  recovery and                                                                    
innovation  such as  business  relief  programs or  programs                                                                    
that could  help move Alaska  out of the pandemic  and shift                                                                    
the way  businesses conducted  themselves. It  would provide                                                                    
relief to businesses throughout the state.                                                                                      
Senator  von  Imhof asked  if  the  administration would  be                                                                    
ready to  distribute the funds  in a timely and  fair manner                                                                    
if the legislature accepted the  funding and added it to the                                                                    
budget. She wondered whether additional time was needed.                                                                        
Mr. Steininger  replied that the items  were being presented                                                                    
as buckets  of money with  rough allocations that  needed to                                                                    
be further  defined. He indicated  that because  the federal                                                                    
guidance  was not  anticipated until  May 10,  2021, it  was                                                                    
difficult  to  specify how  funding  would  be deployed.  He                                                                    
hoped, through  the legislative process, the  items would be                                                                    
better  refined prior  to the  end of  session. He  provided                                                                    
various  distribution options.  The  administration did  not                                                                    
have   specifics  regarding   how  the   funding  could   be                                                                    
Mr.   Steininger  continued   to  item   4,  an   allocation                                                                    
specifically  for tourism  revitalization.  While there  was                                                                    
the  economic   recovery  and  innovation   allocation,  the                                                                    
tourism  industry  had been  hit  especially  hard, and  the                                                                    
industry was facing  another year of reduced  tourism in the                                                                    
following   season.  A   significant  allocation   would  be                                                                    
necessary. Item 5 had to  do with infrastructure investment.                                                                    
The   American  Rescue   Plan   Act   included  monies   for                                                                    
infrastructure  programs, especially  for water,  sewer, and                                                                    
broadband  projects.  More detail  regarding  infrastructure                                                                    
activity would be provided in  the guidelines to be released                                                                    
in May by the US Treasury.                                                                                                      
Mr.   Steininger  addressed   item  6   in  the   amount  of                                                                    
$19 million for replacement of lost  revenue due to COVID in                                                                    
designated  general   funds  (DGF)  or   restricted  revenue                                                                    
sources that supported state programs.  He provided a couple                                                                    
of examples  within DFG  and cruise  ship head  tax receipts                                                                    
which  had declined  significantly. The  funding in  item 16                                                                    
would help  to backfill  some lost revenues.  Item 7  in the                                                                    
amount  of  $120  million  UGF  was  for  revenue  backfill.                                                                    
Regular state activities would be  supported with ARPA funds                                                                    
allowing the general  fund dollars to remain  in the state's                                                                    
general fund treasury.                                                                                                          
9:45:21 AM                                                                                                                    
Senator Olson  asked about  item 2  regarding the  Victim of                                                                    
Crimes Act (VOCA) funds.                                                                                                        
Co-Chair  Bishop   asked  Senator   Olson  to   restate  his                                                                    
Senator Olson restated his question.                                                                                            
Co-Chair Bishop referred to item 2.                                                                                             
Senator  Olson indicated  his question  had to  do with  the                                                                    
$6 million   for  sexual   assault  and   domestic  violence                                                                    
specifically.  There was  a shortfall  currently within  the                                                                    
division. He  wondered if  the funds could  be used  to fill                                                                    
the gap. He asked if money was available presently.                                                                             
Mr.  Steininger explained  that the  $6 million  in item  2,                                                                    
while not  a direct replacement  of the loss of  VOCA funds,                                                                    
it  provided the  Council on  Domestic  Violence and  sexual                                                                    
Assault with funding to avoid  the drop off in grant amounts                                                                    
to  entities  that relied  on  the  funding. The  money  was                                                                    
intended to replace the reduction in funding.                                                                                   
Senator Olson  wondered what kind  of shortfall  the council                                                                    
would still face following the receipt of $6 million.                                                                           
Mr. Steininger  replied that the  federal grant  was reduced                                                                    
by  about  $1.4 million.  The  amount  of $6  million  would                                                                    
replace that shortfall  and bring the council  closer to the                                                                    
baseline  it had  received in  the  past. There  had been  a                                                                    
steady decline in VOCA receipts  from the federal government                                                                    
in the previous several years  as a result of the complexity                                                                    
of how the  funding was calculated at the  federal level. He                                                                    
thought  the $6  million  would solve  the  problem for  the                                                                    
grantees in the short-term.                                                                                                     
Senator  Wielechowski queried  the administration's  opinion                                                                    
regarding using the  full $1 billion in  the upcoming fiscal                                                                    
year versus spreading  it out over several years.                                                                               
Mr. Steininger  indicated the administration  proposed using                                                                    
the full amount  in the governor's bill as  a starting place                                                                    
in order  to have  such a discussion.  An argument  could be                                                                    
made in  favor of spreading  out the appropriation  over two                                                                    
years. He  reported that  the $1 billion  as proposed  was a                                                                    
multi-year   appropriation   spread   over   4   years   but                                                                    
appropriated up-front.  It would  allow for  some management                                                                    
of the funds.  He also indicated that  the legislature could                                                                    
only appropriate a portion of  the funds in the current year                                                                    
and make  another appropriation in  the following  year. The                                                                    
federal government  might require  the state do  the latter.                                                                    
There  had   been  talk  of  the   federal  government  only                                                                    
dispersing  half  of  the  funds in  the  current  year  and                                                                    
waiting  12 months  to  provide the  other  half. The  state                                                                    
might  only be able  to only appropriate about $510 million.                                                                    
The issue had to be part of the policy discussions.                                                                             
Senator Wielechowski  queried the  administration's position                                                                    
on  giving  money  directly  to  individuals  or  businesses                                                                    
versus  making  investments  in infrastructure  projects  in                                                                    
which businesses would participate.                                                                                             
9:50:36 AM                                                                                                                    
Mr. Steininger  replied that as the  administration had laid                                                                    
out its plan,   it tried to create a  balance between needs.                                                                    
There  were businesses  and individuals  that needed  direct                                                                    
relief.  However, it  was important  to  think about  things                                                                    
that  generated an  environment that  allowed businesses  to                                                                    
continue to function. The funding  was short-term relief. He                                                                    
thought  it  was  also  important   to  think  about  stable                                                                    
economic development in the long-term.                                                                                          
Mr.  Steininger continued  to item  7  (page 3)  and item  8                                                                    
(page  4)  that worked  together.  The  items reflected  the                                                                    
one-time  UGF reduction  that allowed  for revenue  offsets.                                                                    
Item 9 was language  "compliance and contingencies" included                                                                    
in the bill that reaffirmed  that any action taken with ARPA                                                                    
funding needed  to be  done in  compliance with  the federal                                                                    
rules as  they were  released on May  10, 2021  and possibly                                                                    
updated. He was  aware that under the  Coronavirus State and                                                                    
Local Fiscal Recovery Funds  (CSLFRF) the guidelines changed                                                                    
frequently  over  the course  of  the  previous summer.  The                                                                    
administration needed  to be prepared for  the guidelines to                                                                    
change as the  state began to operate some  of the programs.                                                                    
The  language  attempted to  ensure  that  once a  plan  was                                                                    
developed  and an  appropriation was  made, the  state could                                                                    
execute it  without disruption. Item  10, the final  item on                                                                    
the  list, in  the  amount  of $112.3  million  was for  the                                                                    
Coronavirus Capital Projects Fund.  It would allow the state                                                                    
to  carry  out  capital  projects  directly  enabling  work,                                                                    
education,  and  health  monitoring.   Since  the  bill  was                                                                    
submitted, the administration  started receiving indications                                                                    
that the  US Treasury  would interpret the  funding strictly                                                                    
as it related to broadband.                                                                                                     
Co-Chair Bishop  wondered if Mr. Steininger  had any updates                                                                    
on  the  guidelines  and  whether   May  10th  remained  the                                                                    
anticipated date of their receipt.                                                                                              
Mr. Steininger  replied that  he did not  have an  update on                                                                    
the   release   of   the  guidelines.   The   administration                                                                    
occasionally  received  guidelines  on   some  of  the  more                                                                    
specific pots  of money. May  10, 2021 was the  deadline for                                                                    
guidance. He  hoped the state would  receive the information                                                                    
earlier. It took the US Treasury  some time to hire the team                                                                    
writing the guidelines.                                                                                                         
Co-Chair  Bishop  discussed  the  agenda  for  the  upcoming                                                                    
meeting on the following Monday.                                                                                                
SB 49 was HEARD and HELD in committee for further                                                                               
SB 50 was HEARD and HELD in committee for further                                                                               
9:56:08 AM                                                                                                                    
The meeting was adjourned at 9:56 a.m.                                                                                          

Document Name Date/Time Subjects
SB 49 043021 UA 22 Sub Com final close out docs.pdf SFIN 4/30/2021 9:00:00 AM
SB 49
SB 49 Supplemental Operating Spreadsheet 4.30.2021.pdf SFIN 4/30/2021 9:00:00 AM
SB 49
SB 128 Supplemental ARPA Items 4.30.2021.pdf SFIN 4/30/2021 9:00:00 AM
SB 128
SB 50 Supplemental Capital Spreadsheet 4.30.2021.pdf SFIN 4/30/2021 9:00:00 AM
SB 50