Legislature(2021 - 2022)SENATE FINANCE 532

04/13/2022 09:00 AM Senate FINANCE

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Audio Topic
09:03:09 AM Start
09:04:16 AM Alaska Employment Wages and Population Trends
10:08:32 AM SB241
11:00:51 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: Alaska's Employment, Wages, & TELECONFERENCED
Population Trends by
Dan Robinson, Dept. Of Labor
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
**Streamed live on AKL.tv**
                 SENATE FINANCE COMMITTEE                                                                                       
                      April 13, 2022                                                                                            
                         9:03 a.m.                                                                                              
9:03:09 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 Bert Stedman, Co-Chair                                                                                                  
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson (via teleconference)                                                                                        
Senator Bill Wielechowski                                                                                                       
Senator David Wilson                                                                                                            
MEMBERS ABSENT                                                                                                                
Senator Natasha von Imhof                                                                                                       
ALSO PRESENT                                                                                                                  
Dan  Robinson, Chief  Researcher,  Department  of Labor  and                                                                    
Workforce  Development;  Briel Glanville,  Student,  Palmer;                                                                    
Jack  Cain,  Student,  Palmer; Miles  Baker,  Infrastructure                                                                    
Investment  Coordinator,   Office  of  the   Governor;  Neil                                                                    
Steininger,  Director,  Office  of  Management  and  Budget,                                                                    
Office of the Governor.                                                                                                         
PRESENT VIA TELECONFERENCE                                                                                                    
Curtis Thayer, Executive  Director, Alaska Energy Authority,                                                                    
Anchorage;    Stacy   Barnes,    Alaska   Housing    Finance                                                                    
Corporation,   Anchorage;  James   Wiedle,  Alaska   Housing                                                                    
Finance Corporation, Anchorage.                                                                                                 
SB 241    APPROP: SUPPLEMENTAL; CAPITAL                                                                                         
          SB 241 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
PRESENTATION: ALASKA EMPLOYMENT WAGES AND POPULATION TRENDS                                                                     
Co-Chair Bishop reviewed the meeting agenda.                                                                                    
^ALASKA EMPLOYMENT WAGES AND POPULATION TRENDS                                                                                
9:04:16 AM                                                                                                                    
DAN  ROBINSON, CHIEF  RESEARCHER,  DEPARTMENT  OF LABOR  AND                                                                    
WORKFORCE DEVELOPMENT,  discussed the  presentation, "Alaska                                                                    
Economic  Update" (copy  on  file). He  looked  at slide  2,                                                                    
"What We'll Cover Today":                                                                                                       
     1. Job numbers and what they tell us about how Alaska                                                                      
    is recovering from COVID (and other shocks) so far.                                                                         
     2. Brief look at GDP and personal income data (because                                                                     
     job numbers can't tell us everything about an                                                                              
     3. A few special topics: update on actuarial health of                                                                     
     unemployment insurance trust fund, housing market, and                                                                     
     population/migration trends.                                                                                               
9:06:57 AM                                                                                                                    
Mr.  Robinson addressed  slide 3,  "Job  Picture Before  and                                                                    
After COVID." The  slide showed a graph  depicting sharp job                                                                    
losses  in  May  of  2020.  He  noted  that  the  jobs  were                                                                    
seasonally adjusted  and most jobs  in the state  were year-                                                                    
Mr. Robinson  pointed to slide  4, "How Much  Resemblance to                                                                    
U.S.?"  He  relayed  that  the  slide  indexed  the  numbers                                                                    
comparing Alaska's  economy with the nationwide  economy. He                                                                    
stated  that Alaska's  economy was  better overall  than the                                                                    
U.S. economy during the 1980s,  1990s, and 2000s, but it had                                                                    
fallen behind over the last twenty years.                                                                                       
9:09:59 AM                                                                                                                    
Co-Chair Bishop  recalled that  there had  been a  time when                                                                    
the state had averaged a 1 percent growth rate.                                                                                 
Mr. Robinson replied that there  had been an extended period                                                                    
of  time when  the state  experienced no  job losses    from                                                                    
after the recession in the  1980s until the Great Recession,                                                                    
which had  not hit  the state  very hard.  He said  that the                                                                    
state   had  faired   well   through   the  two   nationwide                                                                    
Co-Chair  Bishop remarked  that during  that time  the state                                                                    
had enjoyed robust capital budgets.                                                                                             
Mr.  Robinson  replied  that  it  would  be  complicated  to                                                                    
deconstruct the factors. He noted  that at the time, oil was                                                                    
relatively  stable,  and  the state  savings  accounts  were                                                                    
flush, which was no longer the case.                                                                                            
Co-Chair Stedman remembered the  time of the Great Recession                                                                    
and  discussions  at  the  table  that  had  led  to  taking                                                                    
effective  action  to  insulate   the  state  from  economic                                                                    
downfall. He stressed the importance  of building up savings                                                                    
to shield the state from future downturns.                                                                                      
9:13:24 AM                                                                                                                    
Mr. Robinson  replied that the  debate surrounding  how much                                                                    
the government  should spend when  the economy was  weak had                                                                    
been happening  for a long  time. He added that  the numbers                                                                    
on the slides  reflected policy choices, which  made it hard                                                                    
to isolate individual factors.                                                                                                  
Co-Chair Stedman  remarked that  there had  been substantial                                                                    
disagreements  with the  administration at  the time  of the                                                                    
Great  Recession but  that the  committee at  that time  had                                                                    
taken effective  action to deal  with the  state's financial                                                                    
security. He  stressed that  the state  had the  strength to                                                                    
manage its assets to prepare for future financial crisis.                                                                       
Mr. Robinson  turned to  slide 5,  "Which States  Have Fared                                                                    
Best?" The slide showed the  percentages of COVID-19 related                                                                    
job losses  that states  had recovered as  of July  2021. He                                                                    
noted that Alaska  had recovered less than  other states, at                                                                    
less than 50  percent. He shared that  Utah, Idaho, Arizona,                                                                    
and  Montana  had  recovered well.  Alaska  and  Hawaii  had                                                                    
suffered due to loss of tourism and the price of oil.                                                                           
9:17:43 AM                                                                                                                    
Co-Chair  Bishop asked  why Montana,  Idaho, Utah,  Arizona,                                                                    
and North Carolina had recovered so quickly.                                                                                    
Mr.  Robinson replied  that all  states took  a big  initial                                                                    
loss from  COVID-19. He said  that Utah and Idaho  went into                                                                    
the pandemic with a lower  cost of living than other states,                                                                    
as well as strong tech and university centers.                                                                                  
Co-Chair  Bishop  asked  whether   there  were  any  lessons                                                                    
learned  from  the  more successful  states  that  could  be                                                                    
applicable to Alaska.                                                                                                           
Mr. Robinson  replied that  the data  had been  gathered and                                                                    
studied to find solutions.                                                                                                      
Co-Chair  Stedman asked  how Alaska  would look  relative to                                                                    
the other states if tourism were not a factor.                                                                                  
Mr. Robinson  replied that  Alaska would  be roughly  in the                                                                    
bottom third, due to the oil factor.                                                                                            
9:20:29 AM                                                                                                                    
Co-Chair Bishop  asked if there  had been  any conversations                                                                    
about what  the secretary  of state may  be seeking  for J-1                                                                    
visas  in the  current year.  He  recalled in  the past  the                                                                    
department had signed waivers because  there were not enough                                                                    
seasonal workers. He wondered if  it would be allowed in the                                                                    
current year.                                                                                                                   
Mr.  Robinson   replied,  "The  short  answer   is  no."  He                                                                    
explained  the department  had always  had a  difficult time                                                                    
getting detailed  data from the federal  agency. He detailed                                                                    
there was  a process  where an employer  made a  request and                                                                    
DLWD  had  a request  validation  process.  He relayed  that                                                                    
seafood  processing companies  that  had been  able to  hire                                                                    
Alaskans or Americans  could not in the  current summer. The                                                                    
demand  for  the [J-1]  visa  had  increased distinctly.  He                                                                    
stated  the   labor  shortage  issue  was   real  and  would                                                                    
Mr.  Robinson looked  at slide  7,  "How Are  We Doing  With                                                                    
GDP?" He defined  gross domestic product (GDP)  as the value                                                                    
of all goods and services  produced in Alaska. The value did                                                                    
not necessarily  stay in  Alaska. He  highlighted oil  as an                                                                    
example. He  noted the Bureau of  Economic Analysis produced                                                                    
the  data,  which  was adjusted  for  inflation.  The  slide                                                                    
showed  the  loss of  $10  billion  to  $15 billion  of  oil                                                                    
production. He  elaborated that in  2013, oil  accounted for                                                                    
about  one-third   of  the  state's  GDP;   the  number  had                                                                    
decreased to about  10 percent at present. He  noted oil was                                                                    
being reduced as a share  of the state's overall economy. He                                                                    
added  that   Russia  and  Ukraine   had  raised   some  new                                                                    
questions. He relayed that without  oil, the state's GDP had                                                                    
been flat over  the period shown on the  slide [between 2010                                                                    
and 2021].                                                                                                                      
9:23:23 AM                                                                                                                    
Co-Chair  Bishop  remarked that  oil  was  the state's  most                                                                    
valuable export commodity.                                                                                                      
Mr. Robinson agreed  and stated it had been true  for a long                                                                    
time.   He  remarked   there  could   be   a  future   where                                                                    
alternatives, mining,  and other things began  to rival oil;                                                                    
however, it was still in the future.                                                                                            
Co-Chair  Stedman  asked  for an  explanation  of  the  term                                                                    
"chained dollars" on slide 7.                                                                                                   
Mr. Robinson answered  it was a Bureau  of Economic Analysis                                                                    
term that meant adjusted for inflation.                                                                                         
Co-Chair  Bishop surmised  it  was the  method of  adjusting                                                                    
real dollar amounts for inflation over time.                                                                                    
Co-Chair  Stedman suggested  adding  several  states to  the                                                                    
chart  on  slide 7  for  comparison.  He was  interested  in                                                                    
seeing  the compounded  effects of  the GDP  growth. He  had                                                                    
seen other recent charts showing  other states slowly moving                                                                    
forward, while  Alaska was going sideways  or down slightly.                                                                    
He   remarked  that   over  several   years   the  gap   was                                                                    
substantial.   He  requested   the   information  from   the                                                                    
Mr. Robinson  replied affirmatively. He  suggested including                                                                    
some oil  states and  non-oil states  in the  comparison. He                                                                    
shared he had initially shown  the data compared to the U.S.                                                                    
to show there  was a different pattern for  the U.S. economy                                                                    
compared to the Alaskan economy.                                                                                                
Co-Chair  Stedman agreed  and asked  for  a compounded  rate                                                                    
with  states starting  off at  the same  point. He  remarked                                                                    
that the  scale was hugely different  between Alaska, Idaho,                                                                    
and California.                                                                                                                 
Mr. Robinson  replied that the information  would be indexed                                                                    
to make it comparable.                                                                                                          
9:26:16 AM                                                                                                                    
Co-Chair  Stedman did  not want  to lose  sight of  the fact                                                                    
that  many states  were  slowly moving  ahead  of Alaska  in                                                                    
terms of  GDP, but  over a  longer timeframe  the difference                                                                    
was substantial. He  did not want Alaska  getting way behind                                                                    
while thinking it was treading water.                                                                                           
Co-Chair Bishop asked  if there would be  merit in isolating                                                                    
the  information  in  two   different  categories  with  one                                                                    
showing energy  producing states  and the other  showing all                                                                    
other states.                                                                                                                   
Mr. Robinson agreed and noted the  U.S. would also be a good                                                                    
comparison.  He  thought  it  was  especially  important  to                                                                    
compare Alaska to small resource  based states such as North                                                                    
Dakota, Wyoming, and  New Mexico. He added  that Texas would                                                                    
also be  an interesting comparison because  of its important                                                                    
oil industry in addition to  enough other revenue sources to                                                                    
absorb  shock.  He added  that  it  was a  hugely  different                                                                    
population base.                                                                                                                
Mr.  Robinson  highlighted  slide  8,  "How  About  Personal                                                                    
Income?"  He explained  the chart  reflected  the amount  of                                                                    
income Alaskans  receive. The  chart included  payments from                                                                    
three  primary  sources,  the largest  of  which  was  work,                                                                    
accounting  for  approximately  two-thirds of  the  personal                                                                    
income typically coming into a  state. The second source was                                                                    
from dividends,  interest, and rent (e.g.,  income from rent                                                                    
or  day  trading).  The third  source  was  called  personal                                                                    
current   transfer  receipts,   which  were   payments  from                                                                    
government for which a recipient  did no current work (e.g.,                                                                    
social security,  unemployment insurance, and  the Permanent                                                                    
Fund  Dividend).  He pointed  out  that  a massive  economic                                                                    
shock  had  occurred,   yet  personal  income  substantially                                                                    
increased [in 2021], which was not how it normally worked.                                                                      
9:30:08 AM                                                                                                                    
Mr.  Robinson continued  to address  slide  8. He  explained                                                                    
that typically personal income went  down during a recession                                                                    
due  to   lost  wages.   He  elaborated  that   the  federal                                                                    
government had made the policy call  to spend a lot of money                                                                    
to avoid  making things worse. He  highlighted foreclosures,                                                                    
evictions, student  loan default,  job loss,  and population                                                                    
displacement as  examples. He noted the  slide reflected the                                                                    
total and  not the per  capita. He  added that the  data was                                                                    
annualized  reflecting  a  quarter of  personal  income.  He                                                                    
would further explain  the origin of the  large increases on                                                                    
a subsequent slide.                                                                                                             
Senator Wielechowski asked what sort  of jobs would grow and                                                                    
need filling over the next 20 to 30 years.                                                                                      
Mr. Robinson replied,  "In the short-term, all  of them." He                                                                    
explained there  was a labor shortage  issue. The department                                                                    
did occupational  and industry projections every  two years,                                                                    
with the  next round coming out  in the fall. He  noted that                                                                    
occupations  were evolving  quickly, but  occupations tended                                                                    
to  stick  around  but   with  modifications.  For  example,                                                                    
lawyers  would  continue  to  do  legal  work,  but  it  was                                                                    
different legal work  in terms of technology.  He stated the                                                                    
fundamentals did not  tend to change rapidly.  He added that                                                                    
technology  had  sped  up  some  existing  changes  such  as                                                                    
alternative energy technologies.                                                                                                
Senator Wielechowski mentioned  incoming federal dollars and                                                                    
wondered where Alaskans should focus  on looking in terms of                                                                    
good paying jobs with benefits for the next 10 to 30 years.                                                                     
9:33:41 AM                                                                                                                    
Mr. Robinson  responded that the wages,  required education,                                                                    
and projected growth were all  important; however, he stated                                                                    
that  people should  follow their  passions. He  stated that                                                                    
someone  who was  very good  at almost  anything could  make                                                                    
good  money. He  referenced the  current labor  shortage and                                                                    
underscored that  employers would  need to  do a  better job                                                                    
making  employees  feel  valued.  He  stressed  that  people                                                                    
wanted to do work they cared about.                                                                                             
Co-Chair Bishop  invited visiting  students to  approach the                                                                    
table to  testify on what they  wanted to do when  they were                                                                    
BRIEL GLANVILLE, STUDENT, PALMER,  testified that she wanted                                                                    
to  go to  college and  get her  art degree.  She wanted  to                                                                    
become a college art teacher.                                                                                                   
JACK CAIN, STUDENT,  PALMER, testified that he  wanted to go                                                                    
to trade school and learn to become a welder.                                                                                   
9:37:53 AM                                                                                                                    
Co-Chair Bishop  remarked that many adults  falsely believed                                                                    
that kids did  not know what they wanted to  do. He stressed                                                                    
that the  two students who  had testified already  knew what                                                                    
they wanted to do when they graduated.                                                                                          
Mr.  Robinson   shared  that  he   had  attended   a  recent                                                                    
infrastructure  event in  Anchorage.  He  relayed the  labor                                                                    
shortage was real. He suggested  starting to talk to kids in                                                                    
elementary  school   about  what  they  wanted   to  do  and                                                                    
providing  some exposure  to work  places when  they were  a                                                                    
little older. He  stated that most of what  people chose for                                                                    
careers was  based on  what they were  familiar with  or who                                                                    
they  knew. He  highlighted  the idea  of  helping kids  and                                                                    
adults  see there  were always  more  possibilities than  we                                                                    
Co-Chair  Bishop  remarked  that  the  current  presentation                                                                    
would  dovetail nicely  with the  afternoon presentation  on                                                                    
workforce development.                                                                                                          
Mr.  Robinson discussed  slide 9,  "The  Driver of  Personal                                                                    
Income  Change." The  chart showed  the  extent that  mostly                                                                    
federal  funding  flowed  to Alaskans  during  the  COVID-19                                                                    
pandemic. He  underscored that  $5 billion  had come  in the                                                                    
form of  payroll protection, childcare  credit, unemployment                                                                    
insurance benefits,  social security, and other  in order to                                                                    
keep  the economy  from spinning  downwards.  He added  that                                                                    
Alaskans received  more money in income  during COVID-19 and                                                                    
were still receiving more money  than they did pre-COVID. He                                                                    
stated it  was odd and  important to understand in  terms of                                                                    
how much  Alaskans in aggregate  had lost. He  stressed they                                                                    
had gained, not lost during the specified period.                                                                               
9:40:43 AM                                                                                                                    
Mr.  Robinson   discussed  the   actuarial  health   of  the                                                                    
unemployment  trust fund  on slide  10. He  stated that  the                                                                    
unemployment trust fund system  had been used heavily during                                                                    
the  pandemic  and  in  some   new  ways  including  getting                                                                    
unemployment insurance  benefits to gig workers  and related                                                                    
things.  He stated  that work  search requirements  had been                                                                    
temporarily  suspended. He  explained that  in order  to get                                                                    
unemployment insurance  a person had to  be actively seeking                                                                    
work, but  during the  pandemic the  work searches  had been                                                                    
suspended. He  clarified the department was  not involved in                                                                    
the important policy  questions about unemployment insurance                                                                    
related to who received it,  how much they received, and for                                                                    
how long. He shared that  the department was responsible for                                                                    
performing  the actuarial  function. He  relayed all  states                                                                    
performed the work a bit  differently. He shared that Alaska                                                                    
could be  very proud of  how actuarily sound the  system was                                                                    
and had been since the  1980s. He expounded that most states                                                                    
went bankrupt during  the Great Recession and  had to borrow                                                                    
money from  the federal  government, whereas Alaska  had not                                                                    
been anywhere near bankrupt. He  stated that similarly there                                                                    
had  been  a  big  deduction from  the  system  during  this                                                                    
period.  He  pointed to  the  green  lines representing  the                                                                    
solvency target range.  He noted it did not  matter that the                                                                    
unemployment  insurance fund  balance moved  outside of  the                                                                    
target range  occasionally, especially on the  low side; the                                                                    
system was designed that way.  He stated that the system was                                                                    
actuarially very healthy.                                                                                                       
Co-Chair  Bishop  referenced  an article  published  by  Mr.                                                                    
Robinson.  He highlighted  that approximately  75,000 people                                                                    
had exited the Alaska  workforce during COVID-19. He thought                                                                    
approximately  one-third of  the  individuals  did not  draw                                                                    
unemployment insurance benefits during that time.                                                                               
Mr.  Robinson answered  affirmatively. He  characterized the                                                                    
situation  as one  of the  red herrings.  He referenced  the                                                                    
idea that people could not  hire was because there were many                                                                    
people  staying home  collecting unemployment  insurance. He                                                                    
stated it had  not been an irrational idea  when the federal                                                                    
government was adding $600 to  the weekly benefit amount. He                                                                    
elaborated  that  plenty  of people  had  been  making  more                                                                    
briefly ($970 plus some supplemental  options per week) than                                                                    
they had at work. He  relayed that normally Alaska's maximum                                                                    
weekly  benefit  amount was  $370.  He  addressed the  study                                                                    
conducted by  DLWD referenced by Co-Chair  Bishop. The study                                                                    
had found  that of the  75,000 workers who were  not working                                                                    
in the  third quarter  of 2021,  only about  one-third filed                                                                    
for unemployment  insurance ever.  The results  indicated it                                                                    
was not the major factor in missing workers.                                                                                    
9:44:31 AM                                                                                                                    
Mr.  Robinson  displayed slide  11,  "Housing  Market is  in                                                                    
     Prices are way up, inventories are down, interest                                                                          
     rates are still low, but likely headed up.                                                                                 
     A few examples from work we do for AHFC:                                                                                   
     Average loan for single family home in Juneau                                                                              
     2019 Q4: $345K                                                                                                             
     2021 Q4: $414K                                                                                                             
Mr. Robinson  shared that  the housing  market in  the state                                                                    
was not sustainable. He continued  that at some point people                                                                    
could no  longer afford houses; as  interest rates increase,                                                                    
housing   becomes   less   affordable.  He   referenced   an                                                                    
affordability   index  that   compared  wages   and  average                                                                    
mortgage  prices.  He  noted that  Alaska  housing  remained                                                                    
fairly affordable.                                                                                                              
AT EASE                                                                                                                         
9:46:08 AM                                                                                                                    
9:46:52 AM                                                                                                                    
Mr.  Robinson looked  at  slide 12,  "Housing  Market is  in                                                                    
     Prices are way up, inventories are down, interest                                                                          
     rates are still low, but likely headed up.                                                                                 
     A few examples from work we do for AHFC:                                                                                   
     Average loan for single family home in Anchorage                                                                           
     2019 Q4: $328K                                                                                                             
     2021 Q4: $374K                                                                                                             
Mr.  Robinson  discussed slide  13,  "Housing  Market is  in                                                                    
     Prices are way up, inventories are down, interest                                                                          
     rates are still low, but likely headed up.                                                                                 
     A few examples from work we do for AHFC:                                                                                   
     Average loan for single family home Mat-Su                                                                                 
     2019 Q4: $255K                                                                                                             
     2021 Q4: $321K                                                                                                             
9:47:47 AM                                                                                                                    
Senator  Wilson asked  how working  from  home affected  the                                                                    
housing market.                                                                                                                 
Mr. Robinson answered that the  answer was not yet known. He                                                                    
relayed  that   in  some  cities  there   were  issues  with                                                                    
commercial  real estate  because  people  were working  from                                                                    
home. He  stated that  people were now  seeing that  some of                                                                    
that expectation of  change was overblown. There  had been a                                                                    
surge of many people working from  home and a return to work                                                                    
of many people. He noted  that some people would continue to                                                                    
work from home. He did not  believe the situation would be a                                                                    
major disruptive factor [to the housing market].                                                                                
Co-Chair Stedman looked  at slides 11 and 13  related to the                                                                    
housing  market  in  Juneau and  Mat-Su.  He  observed  that                                                                    
housing in  Juneau was about  $100,000 more than  Mat-Su and                                                                    
even  though prices  grew  26 percent  in  Mat-Su, the  cost                                                                    
difference continued  to be  about $100,000.  He highlighted                                                                    
that  Mat-Su was  the growth  area of  the state.  He stated                                                                    
there  was a  lack of  housing across  the entire  state. He                                                                    
stated the  legislature would likely be  grappling with ways                                                                    
to  implement  strategies  to   alleviate  the  problem.  He                                                                    
highlighted a  $350 million hospital expansion  in the small                                                                    
town of Sitka. He believed there  would be 80 to 100 housing                                                                    
units  added   to  keep  the  pressure   off  housing  price                                                                    
increases. He  asked if Mr.  Robinson could  provide housing                                                                    
data  for  Ketchikan, Sitka,  and  a  few other  communities                                                                    
around the state to look  at the housing affordability index                                                                    
in  association with  the homelessness  issue in  Alaska. He                                                                    
expected  fewer people  could  afford a  home  based on  the                                                                    
price  movements [shown  on slides  11 through  13]. He  had                                                                    
noticed  in his  district  there seemed  to  be more  people                                                                    
doubling up in housing over the past decade.                                                                                    
9:51:36 AM                                                                                                                    
Co-Chair Bishop asked  Mr. Robinson to pick  a hub community                                                                    
from  census   areas  throughout  the  state   for  Co-Chair                                                                    
Stedman's request.                                                                                                              
Mr.  Robinson responded  that  the  department had  recently                                                                    
finished  its spring  rental survey.  He stated  that rental                                                                    
costs were  increasing, and  vacancy rates  were decreasing.                                                                    
He relayed that  at some point it was not  possible to buy a                                                                    
house or rent.  He elaborated that the  housing shortage was                                                                    
a real problem. He  referenced the hospital example provided                                                                    
by Co-Chair  Stedman and highlighted the  military expansion                                                                    
in Fairbanks as another  example. He detailed the expansions                                                                    
reflected an  economic boon for the  state; however, workers                                                                    
could not find  places to live. He noted it  had long been a                                                                    
problem  in  rural  Alaska, specifically  for  teachers.  He                                                                    
explained that  it was  not possible to  bring workers  to a                                                                    
place where  they could not afford  to buy or rent  a house.                                                                    
The  reasons were  complicated and  not  entirely known.  He                                                                    
highlighted  supply  chain  issues   as  a  new  factor  and                                                                    
inflation would get worse before improving.                                                                                     
Co-Chair   Stedman  believed   the  rental   issue  was   as                                                                    
significant  as  the  housing  shortage.  He  had  met  with                                                                    
numerous  employers  over  the  past nine  months  who  were                                                                    
trying to  expand their business  or service  their workload                                                                    
around  the coast  and other  areas. Those  employers had  a                                                                    
challenging  time  finding  housing for  their  workers.  He                                                                    
explained that  some companies  had actually  bought housing                                                                    
in communities to house employees.  He noted the problem was                                                                    
occurring across  the state, particularly along  the coastal                                                                    
Mr.  Robinson   added  that   Alaska  had   some  additional                                                                    
challenges  associated  with  the  seasonality  of  workers;                                                                    
housing  was needed  temporarily for  workers. Additionally,                                                                    
there  were  areas  where  housing  prices  were  increasing                                                                    
because  people from  out of  state or  elsewhere in  Alaska                                                                    
were buying up the existing housing.                                                                                            
9:54:38 AM                                                                                                                    
Co-Chair Bishop  stated that housing and  rental issues were                                                                    
real.  He looked  at  the  2021 average  loan  for a  single                                                                    
family home in  Juneau of $414,000. He asked  for the amount                                                                    
of the associated mortgage payment.  He asked who was making                                                                    
$2,500  a week  to make  the  first payment.  He stated  his                                                                    
father's rule  had been to  buy a  house with what  a person                                                                    
could afford with their first  paycheck out of the month. He                                                                    
stressed there were many state  workers at a salary range 14                                                                    
and 15 who were working at  least two jobs in Juneau to make                                                                    
ends meet.                                                                                                                      
Senator  Hoffman  highlighted   the  underlying  problem  of                                                                    
availability of  land. He used  Anchorage as an  example and                                                                    
noted there was very  little land available for development,                                                                    
which  increased the  cost [of  housing]. He  suggested that                                                                    
DLWD should look at the  availability of developable land in                                                                    
areas with housing shortages.                                                                                                   
Mr. Robinson  replied that  the reason  Mat-Su had  grown as                                                                    
much  as it  had was  due  to inexpensive  housing and  land                                                                    
availability  in   addition  to  Anchorages  lack   of  land                                                                    
availability and  Mat-Su's proximity to Anchorage  where the                                                                    
jobs were  located. No  other major  location in  Alaska had                                                                    
more  affordable  housing than  the  Mat-Su  worker with  an                                                                    
Anchorage  job.  He  stated it  would  generate  growth  for                                                                    
decades in Mat-Su primarily because of housing.                                                                                 
9:57:13 AM                                                                                                                    
Mr.  Robinson   briefly  highlighted  slide  14,   "Lots  of                                                                    
Demographics Action Too":                                                                                                       
     ? 2020 Census completed, but it was unusually                                                                              
     ? 733,391 AK population (710,231 in 2010 Census)                                                                           
     ? Population projections out to 2050 will be released                                                                      
     in the next few weeks                                                                                                      
     ? Overall, state's population trend is flat/stable                                                                         
     (Mat-Su remains a distinct standout, but growth has                                                                        
     slowed there, too)                                                                                                         
Mr.  Robinson shared  that  for  nine years  in  a row  more                                                                    
people had left  Alaska than had moved to  Alaska. He stated                                                                    
that natural  increase (the number  of people born  less the                                                                    
number  of people  who died)  had generally  compensated for                                                                    
the  migration losses;  therefore,  Alaska's population  had                                                                    
been generally  flat to stable  during the period.  He noted                                                                    
that  Mat-Su was  the distinct  outlier. He  elaborated that                                                                    
growth had slowed over the  period where the state's economy                                                                    
had not done terribly well and over the past decade.                                                                            
Senator  Wilson  wondered  whether   the  state  should  put                                                                    
additional resources and development  into the recent growth                                                                    
in Mat-Su.                                                                                                                      
Mr. Robinson replied it was  entirely the legislature's call                                                                    
and had little to do with the work done by DLWD.                                                                                
9:58:47 AM                                                                                                                    
Co-Chair  Bishop  remarked that  in  his  past work  at  the                                                                    
department they had  used a hands-off approach  when it came                                                                    
to politics and policy.                                                                                                         
Mr.  Robinson  believed  it was  part  of  the  department's                                                                    
value. He  remarked that  [the department's  magazine Alaska                                                                    
Economic]  Trends  did  not change  from  administration  to                                                                    
administration and  neither did the numbers.  The department                                                                    
did  not talk  about things  that  were not  theirs to  talk                                                                    
Mr. Robinson  discussed slide  15 titled  "Migration Trends,                                                                    
2000-2021." When considering whether  Alaska was a desirable                                                                    
place to live compared to  other states, the chart indicated                                                                    
Alaska was  not doing very  well based on  migration trends.                                                                    
He elaborated  that for nine consecutive  years, more people                                                                    
had left  Alaska than had  come to  Alaska. He noted  it was                                                                    
primarily  because fewer  people were  coming. He  added the                                                                    
issue  was   associated  with  oil  and   other  instability                                                                    
challenges  addressed   by  the  committee   (e.g.,  capital                                                                    
Co-Chair  Bishop  stated the  analogy  he  had made  earlier                                                                    
about housing  affordability got back to  workers' wages. He                                                                    
remarked that Alaska was no  longer the premier state in the                                                                    
nation  for wages.  He believed  people were  moving because                                                                    
they could  go as close as  Washington to make $10  more per                                                                    
hour in his trade. He  pointed out that electricity was much                                                                    
cheaper  in  Washington  than   Fairbanks.  He  thanked  Mr.                                                                    
Robinson for the presentation.                                                                                                  
10:01:16 AM                                                                                                                   
AT EASE                                                                                                                         
10:07:35 AM                                                                                                                   
SENATE BILL NO. 241                                                                                                           
     "An  Act   making  appropriations  for   the  operating                                                                    
     expenses  of  state  government and  certain  programs;                                                                    
     making   capital    appropriations   and   supplemental                                                                    
     appropriations; capitalizing  funds; and  providing for                                                                    
     an effective date."                                                                                                        
10:08:32 AM                                                                                                                   
MILES BAKER,  INFRASTRUCTURE INVESTMENT  COORDINATOR, OFFICE                                                                    
OF THE GOVERNOR, introduced himself.                                                                                            
NEIL STEININGER, DIRECTOR, OFFICE  OF MANAGEMENT AND BUDGET,                                                                    
OFFICE OF THE GOVERNOR, introduced himself.                                                                                     
Mr.  Baker discussed  the  presentation,  "State of  Alaska,                                                                    
Office  of the  Governor, Infrastructure  Appropriation Bill                                                                    
SB241,  Senate Finance  Committee, April  6, 2022"  (copy on                                                                    
file).   He   started   with  slide   7   titled   "SB   241                                                                    
Infrastructure  Overview by  Category"  [see Senate  Finance                                                                    
Committee  meeting dated  April 6,  1:00 p.m.  for slides  1                                                                    
through  6]. The  slide showed  a  table depicting  spending                                                                    
categories  ranging from  the  least  discretionary to  most                                                                    
discretionary.  The  bulk  of the  bill  spending  was  $950                                                                    
million  in  federal  funds and  undesignated  general  fund                                                                    
(UGF) match  (70 percent) for  reauthorized and  new federal                                                                    
programs. The  second spending category was  UGF funding for                                                                    
additional  state  support  of federal  programs.  He  cited                                                                    
critical minerals mapping as an  example. The third category                                                                    
was Congressional  earmarks. He elaborated there  had been a                                                                    
number  for   Alaska  and   only  two   required  additional                                                                    
authority. The  governor wanted to  match the  public safety                                                                    
housing   program  operated   by   Alaska  Housing   Finance                                                                    
Corporation (AHFC) dollar for dollar.                                                                                           
Mr.  Baker  addressed  the  fourth   category  on  slide  7:                                                                    
infrastructure coordination  and implementation.  He relayed                                                                    
it   was  an   ongoing   effort   coordinating  with   local                                                                    
governments and tribes. The category  included money for the                                                                    
governor's  office, a  grant for  the  Alaska Federation  of                                                                    
Natives (AFN) navigator  program, and a grant  to the Alaska                                                                    
Municipal League  (AML). He characterized the  last spending                                                                    
category as  the most policy subjective.  The administration                                                                    
had identified four large areas  in the Department of Energy                                                                    
where Alaska  should be competitive that  were worth putting                                                                    
some UGF into exploring and pursuing.                                                                                           
10:12:01 AM                                                                                                                   
Co-Chair  Bishop  reminded   committee  members  there  were                                                                    
numerous agencies available online for questions.                                                                               
Mr.  Baker displayed  slide 8  titled "Federal  Programs and                                                                    
       Commerce, Community and Economic Development                                                                             
         Alaska Broadband Office $6,513.0 ($6,000.0 Fed,                                                                     
          $513.0 CIP); 3 PFT                                                                                                    
         Rural Utility Business Advisor (RUBA) $666.7                                                                        
          ($500 Fed, $166.7 GF Match); 2 PFT                                                                                    
        Alaska Oil and Gas Conservation Commission (AOGCC)                                                                      
         Orphaned  Well    Plugging,   Remediation    and                                                                    
          Restoration $32,341.0 Fed                                                                                             
Mr. Baker elaborated  that broadband was one  of the biggest                                                                    
game  changing new  investments in  the infrastructure  bill                                                                    
and all states would be  required to have a broadband office                                                                    
to coordinate  the planning effort.  He reported  that every                                                                    
state would receive a minimum  of $100 million and 5 percent                                                                    
of  the funding  received could  be used  on administration.                                                                    
The state expected to receive  another $1 million in federal                                                                    
planning money  for a second  program [under  the Department                                                                    
of  Commerce, Community  and Economic  Development (DCCED)].                                                                    
The  broadband increment  also included  capital improvement                                                                    
project (CIP) funding for three  proposed positions to staff                                                                    
the broadband office. There was  also a tremendous amount of                                                                    
money coming in through  the Environmental Protection Agency                                                                    
(EPA) water  programs. He noted  the Rural  Utility Business                                                                    
Advisor  (RUBA) program  provided  outreach  to support  the                                                                    
water programs.                                                                                                                 
Mr.  Baker  highlighted  a  large  new  initiative  for  the                                                                    
plugging  of oil  and gas  wells through  the Department  of                                                                    
Interior. There were three different  programs for state and                                                                    
private land,  federal land,  and tribal  land. The  bulk of                                                                    
the  federal funding  was  for the  state  and private  land                                                                    
program. He detailed  that AOGCC was the  required lead; all                                                                    
of the  national equivalents  of AOGCC  had been  working on                                                                    
the topic  for quite some  time. The administration  had put                                                                    
in the  request for information  (RFI) and had  received the                                                                    
notice. He relayed there were 12  known oil and gas wells on                                                                    
state land and the funding  was the first tranche of funding                                                                    
the administration  expected to  receive. He  expounded that                                                                    
AOGCC would  contract the work  out and would work  with the                                                                    
Department  of Environmental  Conservation (DEC,  Department                                                                    
of Natural Resources (DNR), RSA, and private contractors.                                                                       
10:15:10 AM                                                                                                                   
Co-Chair  Bishop asked  Mr. Baker  to specify  the operating                                                                    
and  capital funding  in the  requests as  he continued  the                                                                    
presentation.   He  looked   at  the   federal  funding   of                                                                    
$32,341,000 for  AOGCC. He asked  if it was funding  for one                                                                    
year, five  years, or  other. He  asked for  the information                                                                    
going forward.                                                                                                                  
Senator  Wielechowski  asked  if companies  responsible  for                                                                    
drilling  wells  were  required   to  plug,  remediate,  and                                                                    
restore wells they had abandoned.                                                                                               
Mr.  Baker answered  there were  requirements for  companies                                                                    
and requirements had  changed to become more  rigid over the                                                                    
years. He stated that wells  were from various time periods;                                                                    
therefore, some  had been  plugged, but  not to  the current                                                                    
standard. Some  of the  wells were  plugged long  enough ago                                                                    
that  some   of  the  adjacent   lands  were   not  properly                                                                    
remediated. He stated it was all over the map.                                                                                  
Senator  Wielechowski requested  a list  of wells  that were                                                                    
proposed  to  be  plugged,   remediated,  and  restored.  He                                                                    
wondered why the state was  assuming the responsibility with                                                                    
the federal  dollars instead of  the group that  drilled the                                                                    
Co-Chair Bishop  asked if the  funds would "clear  the deck"                                                                    
on the abandoned  wells. He asked if it  would bring closure                                                                    
to all of the abandoned wells.                                                                                                  
Mr.  Baker replied  that when  the notice  came out  for the                                                                    
funding,  AOGCC put  in a  response including  the estimated                                                                    
cost  to plug  the wells  on state  land. The  cost was  $32                                                                    
million.  He  clarified  the  funding  reflected  the  first                                                                    
tranche; if the costs  increased the state could potentially                                                                    
receive additional  money to fill  the work.  The allocation                                                                    
was  based on  the administration's  best cost  estimate. He                                                                    
noted  the funding  was an  FY 22  supplemental because  the                                                                    
well  sites needed  to be  looked  at in  the spring  before                                                                    
alders came up in order to get the best cost estimate.                                                                          
10:19:05 AM                                                                                                                   
Senator Wielechowski asked if the  work would be bid out via                                                                    
a competitive bid process.                                                                                                      
Mr.  Baker replied  in the  affirmative. He  elaborated that                                                                    
AOGCC was  the official  receipt entity  for the  state. The                                                                    
national organization working on  the issue was comprised of                                                                    
all of the AOGCC equivalents.  He explained that AOGCC would                                                                    
be contracting  out and  working with DNR  and DEC  on their                                                                    
portions of the work.                                                                                                           
Senator Wielechowski  referenced the $6.5 million  and three                                                                    
permanent full-time  employees for the broadband  office. He                                                                    
assumed   the  positions   accounted  for   several  hundred                                                                    
thousand dollars.  He asked where the  remaining money would                                                                    
Mr.  Baker replied  that the  administration was  asking for                                                                    
federal receipt authority of what  it expected to get in the                                                                    
first tranche  of available  planning funding.  The $513,000                                                                    
was the  CIP to pay for  the positions. He explained  that a                                                                    
tremendous amount  of work  would be  required. In  order to                                                                    
receive the initial planning funding,  the state had to file                                                                    
a  notice  of  intent  to participate  in  the  program.  He                                                                    
furthered that  the document was fairly  technical and would                                                                    
include the type  of plan and work required.  Once the state                                                                    
received  the  initial  planning funding,  which  should  be                                                                    
fairly quick after filing the  NOI, the administration would                                                                    
develop  a  five-year plan  that  would  include setting  up                                                                    
regional advisory  groups, getting public input  and working                                                                    
with national agencies. The money  would be used for funding                                                                    
positions,   possibly  bringing   in  technical   expertise,                                                                    
holding  planning events,  and putting  together the  needed                                                                    
Senator  Wielechowski relayed  it  would be  helpful if  Mr.                                                                    
Baker could  reference the page number  of the appropriation                                                                    
Mr. Baker offered  to provide the project  numbers and would                                                                    
do his best to provide the requested information.                                                                               
Co-Chair Bishop stated that no  one from DCCED was available                                                                    
online  to  answer any  questions.  He  wanted to  know  the                                                                    
current number of RUBA employees.  He referenced the request                                                                    
for two additional  positions. He wanted to  ensure RUBA was                                                                    
connecting with the United  States Department of Agriculture                                                                    
(USDA).  He highlighted  another $2  billion pot  of funding                                                                    
for rural utility electrification,  water, and broadband. He                                                                    
wanted  to ensure  the state  accessed every  federal dollar                                                                    
possible to get running water in rural Alaska.                                                                                  
10:24:04 AM                                                                                                                   
Mr. Baker continued with slide 8, reading as follows:                                                                           
        Alaska Energy Authority (AEA)                                                                                           
         Alternative Energy and Energy Efficiency Programs                                                                   
          $3,655.6 Fed                                                                                                          
          o Energy Efficiency Conservation Block Grants                                                                         
          o State Energy Program (SEP)                                                                                          
          o   Energy   Efficiency    Revolving   Loan   Fund                                                                    
          Capitalization Program (New)                                                                                          
          o Energy Auditor Training Program (New) Alaska                                                                        
        Housing Finance Corporation (AHFC)                                                                                      
         Weatherization Assistance Program $35,000.0 Fed                                                                     
         Energy Efficiency Research and Training $2,000.0                                                                    
Senator Hoffman commented that $3.6  million was not a large                                                                    
sum of  money. He  recalled that the  weatherization program                                                                    
was  initiated  the last  time  there  was  a spike  in  oil                                                                    
prices. He had  learned from AHFC that  there were thousands                                                                    
of homes in  the state that still  needed weatherization. He                                                                    
was aware that there was  a $1,300 energy rebate proposed by                                                                    
the other body  and the governor had said  he was supportive                                                                    
of  the rebate;  however, there  was no  way to  ensure that                                                                    
individuals would actually spend  the rebate money on energy                                                                    
costs, particularly  in rural  areas. A  significant benefit                                                                    
of the weatherization program was  that it saved individuals                                                                    
from $200 to  $500 per month on energy  costs, which equated                                                                    
to millions of dollars saved  on energy over the lifetime of                                                                    
a home.                                                                                                                         
Senator Hoffman  wondered if  the administration  had looked                                                                    
into  offering financial  assistance  to  Alaskans for  home                                                                    
weatherization. He thought  that of all the  programs in the                                                                    
state, the weatherization program  made the most significant                                                                    
strides  for Alaskans  in reducing  energy  costs. He  noted                                                                    
that there had been out-migration  in the state for the last                                                                    
eight years,  and he believed  that the high cost  of living                                                                    
was  one of  the most  significant contributing  factors. He                                                                    
thought  that  the notion  that  the  proposed sum  of  $3.6                                                                    
million  was   large  was  laughable.  He   asked  what  the                                                                    
administration thought about  the weatherization program and                                                                    
the benefits it could offer.                                                                                                    
10:29:05 AM                                                                                                                   
Mr. Baker agreed that the  term "large" was an inappropriate                                                                    
descriptor for the  sum and apologized if he  gave the wrong                                                                    
impression. He  believed that the weatherization  program to                                                                    
which Senator Hoffman was referring  was managed by AHFC and                                                                    
supported   by  general   funds  (GF).   The  federal   bill                                                                    
[Infrastructure Investment  and Jobs Act (IIJA)]  had around                                                                    
a $3.5  billion supplemental  for weatherization and  it was                                                                    
previously  estimated that  Alaska's  portion  would be  $35                                                                    
million, but the estimate was  reduced to $18 million in the                                                                    
prior week. He relayed that  the governor wanted to keep the                                                                    
spending of  GF down and  limit the amount  of discretionary                                                                    
GF spending.  The only  exception was  a $2  million federal                                                                    
earmark  for  AHFC's  rural housing  program  for  teachers'                                                                    
health and public  safety. The governor wanted  to match the                                                                    
amount with $2 million of UGF for public safety housing.                                                                        
Senator Hoffman stated that he had a comment on the topic.                                                                      
Mr.  Baker  wondered  if   representatives  from  AHFC  were                                                                    
available to comment.                                                                                                           
Senator  Hoffman asked  if the  legislature  should use  the                                                                    
additional revenue to  try to make Alaska  a more affordable                                                                    
place to  live. He  understood the reasoning  behind wanting                                                                    
to keep GF  spending to a minimum but wondered  how it would                                                                    
impact  Alaskans. He  asked if  it  would be  wiser to  help                                                                    
Alaskans  reduce  their energy  costs  directly  or to  give                                                                    
Alaskans a  check for $1,300  and hope that  individuals use                                                                    
the money for  energy costs. He thought  the question should                                                                    
be debated by policymakers.  He indicated that Alaskans were                                                                    
struggling due  to the  high cost  of fuel,  and he  did not                                                                    
think a  one-time check  would be enough  to make  a change.                                                                    
After  the  check  was  spent,  the  needs  would  still  be                                                                    
pressing because the root cause was not addressed.                                                                              
Co-Chair  Bishop  asked Mr.  Curtis  Thayer  to comment.  He                                                                    
referred to the  last bullet under the AEA  section on slide                                                                    
8 regarding  the Energy Auditor  Training Program.  He asked                                                                    
how many more auditors Mr. Thayer was hoping to hire.                                                                           
10:34:49 AM                                                                                                                   
CURTIS THAYER, EXECUTIVE  DIRECTOR, ALASKA ENERGY AUTHORITY,                                                                    
ANCHORAGE,  (via teleconference)  replied  that the  initial                                                                    
request   was  $63,000   for  a   partial  auditor   and  he                                                                    
anticipated that additional  funding for commercial auditors                                                                    
would come in later years.                                                                                                      
Co-Chair  Bishop  asked  if  Mr.  Thayer  was  referring  to                                                                    
commercial property.                                                                                                            
Mr. Thayer agreed.                                                                                                              
Co-Chair  Bishop wondered  whether AEA  had interfaced  with                                                                    
the  Cold   Climate  Housing  Research  Center   (CCHRC)  in                                                                    
Mr.  Thayer replied  in the  affirmative. He  furthered that                                                                    
AEA had  a working  relationship with AHFC  and some  of the                                                                    
auditor training would be shared between the two agencies.                                                                      
Co-Chair Bishop  thought it  would be  helpful if  AEA could                                                                    
leverage its assets.                                                                                                            
Mr. Baker replied to Senator  Hoffman's earlier comments. He                                                                    
explained that  the new estimate  was $18.4 million  for the                                                                    
weatherization  program, which  had  been  reduced from  $35                                                                    
million. He  added that there were  some other opportunities                                                                    
in  the bill  that  AHFC wanted  to pursue  in  the area  of                                                                    
energy efficiency  research, which was a  $2 million federal                                                                    
receipt authority.                                                                                                              
10:36:43 AM                                                                                                                   
STACY   BARNES,   ALASKA    HOUSING   FINANCE   CORPORATION,                                                                    
ANCHORAGE, (via teleconference) introduced herself.                                                                             
Co-Chair  Bishop noted  that the  estimate had  been reduced                                                                    
from  $35 million  to $18.4  million  over the  course of  a                                                                    
week. He  asked if  the $18.4 million  estimate was  for the                                                                    
current  fiscal  year  and  whether  AHFC  expected  similar                                                                    
funding to continue in the future.                                                                                              
JAMES   WIEDLE,   ALASKA    HOUSING   FINANCE   CORPORATION,                                                                    
ANCHORAGE,  (via teleconference)  responded  that the  money                                                                    
was expected to be available for the next five years.                                                                           
Co-Chair Bishop  asked if Mr.  Wiedle meant $18  million per                                                                    
year or $35 million per year.                                                                                                   
Mr. Wiedle replied $18 million in total.                                                                                        
Co-Chair Bishop  asked for more  information on the  way the                                                                    
money would be  used for the energy  efficiency research and                                                                    
training program.                                                                                                               
Mr.  Wiedle responded  that  he did  not  yet have  specific                                                                    
details about what the program  would look like; however, he                                                                    
would follow up with the information when it came out.                                                                          
Co-Chair Bishop  asked if  Mr. Wiedle meant  he did  not yet                                                                    
have guidance from the federal government.                                                                                      
Mr. Wiedle answered in the affirmative.                                                                                         
10:38:14 AM                                                                                                                   
Mr. Baker looked at slide 9, "Federal Programs and Match":                                                                      
        Fish and Game                                                                                                           
         Wildlife    Restoration      (Pittman-Robertson)                                                                    
          $24,000.0 ($18,000.0 Fed, $6,000.0 F and G Fund)                                                                      
Mr.  Baker indicated  that the  Pittman-Robertson funds  had                                                                    
increased substantially,  and the $18 million  federal funds                                                                    
required a  match that would  come out of the  Department of                                                                    
Fish and Game fund.                                                                                                             
Senator Hoffman remarked that  restoration of Chinook salmon                                                                    
in the  Yukon-Kuskokwim Delta (YKD) was  of great importance                                                                    
to  him. He  added that  devastation of  Chinook salmon  was                                                                    
happening  throughout the  state, and  it was  important for                                                                    
the legislature  to try  to reverse  the trends  as Alaskans                                                                    
living   in  the   YKD   area   were  already   experiencing                                                                    
significant  lifestyle changes  due to  the devastation.  He                                                                    
asked  if it  was possible  to look  into restoring  Chinook                                                                    
salmon in YKD  and throughout the state. He did  not mean to                                                                    
suggest  that  salmon  populations  should  be  restored  to                                                                    
commercial  levels,   but  simply  that  salmon   should  be                                                                    
available for  personal use and  food security  purposes. He                                                                    
asked  if the  administration  could  help Alaskans  achieve                                                                    
food security in  other ways if the funds could  not be used                                                                    
to help restore Chinook populations.                                                                                            
Mr. Baker  replied that he  believed the money  was intended                                                                    
to be used  for game and was therefore  non-fish related. He                                                                    
referred  to pages  24  through 26  of  the capital  backup,                                                                    
reference number 60594, which showed  a list of the types of                                                                    
projects  that  qualified.  He   thought  there  were  other                                                                    
programs that  might have more flexibility  and would follow                                                                    
up  with  more  information on  whether  salmon  restoration                                                                    
would qualify.                                                                                                                  
Senator Hoffman remarked that he  was not only interested in                                                                    
learning  if salmon  restoration would  qualify, but  if the                                                                    
legislature was  interested in  recognizing the  problem and                                                                    
taking  steps  to reverse  the  trends  to ensure  that  the                                                                    
lifestyle of Alaskans on the YKD would not vanish.                                                                              
10:43:37 AM                                                                                                                   
Mr.  Steininger   responded  to  Senator   Bishop's  earlier                                                                    
question  regarding  the  difference between  operating  and                                                                    
capital in the  presentation. He explained that  on slide 8,                                                                    
the  RUBA  program  and the  broadband  programs  were  both                                                                    
operating items and  the rest of the items were  part of the                                                                    
capital  budget. On  slide  9, the  Low  Income Home  Energy                                                                    
Assistance  Program (LIHEAP)  was within  the Department  of                                                                    
Health and  Social Services (DHSS) operating  budget and all                                                                    
other items were part of the capital budget.                                                                                    
Mr. Baker continued with slide 9:                                                                                               
        Health and Social Services                                                                                              
         Low Income Home Energy Assistance Program                                                                           
          (LIHEAP) $314.0 Fed                                                                                                   
Mr. Baker commented that the  money was a small supplemental                                                                    
compared  to current  funding for  LIHEAP, which  was around                                                                    
$10 million. There were also  some significant tribal awards                                                                    
for the same purpose that did not come through the state.                                                                       
Senator Hoffman asked if Mr.  Baker had done any analysis on                                                                    
what energy costs  would be in rural  Alaska through LIHEAP.                                                                    
He wondered if the funding  would be enough to help Alaskans                                                                    
facing increased energy costs.                                                                                                  
Mr.  Baker  replied  that  he   would  follow  up  with  the                                                                    
Senator Hoffman was looking forward to it.                                                                                      
10:45:50 AM                                                                                                                   
Mr. Baker continued with slide 9:                                                                                               
        Military and Veterans' Affairs                                                                                          
         State and Local Cybersecurity Grants $2,404.4                                                                       
          ($2,164.0 Fed, 240.4 UGF)                                                                                             
        Natural Resources                                                                                                       
         National  Geological   and    Geophysical   Data                                                                    
          Preservation Program (NGGDPP) $3,290.0                                                                                
          ($2,290.0 Fed, $1,000.0 UGF)                                                                                          
         Critical Minerals Mapping - Earth Mapping                                                                           
          Resources Initiative (MRI) $7,500.0 Fed                                                                               
         Abandoned Mine Lands Reclamation Program $1,333.0                                                                   
         Community Wildfire Defense Grants (NEW) $3,000.0                                                                    
Mr. Baker  added that  the cybersecurity  grant was  a four-                                                                    
year  program, and  that 80  percent of  the funds  would be                                                                    
sub-granted  out   to  local  and  tribal   governments.  He                                                                    
highlighted that  the program was  one of the  few four-year                                                                    
programs  in the  bill and  that most  of the  programs were                                                                    
five-year programs. The match  requirement changed from year                                                                    
to year,  beginning with a  10 percent match  and increasing                                                                    
by 10 percent each year.                                                                                                        
Co-Chair  Stedman  recalled  that slide  8  indicated  there                                                                    
would be $24 million  of Pittman-Robertson funds coming into                                                                    
the  state. There  were three  major shooting  ranges around                                                                    
the state  that were  subsidized in  the budget  every year,                                                                    
and  the increase  in Pittman-Robertson  funding was  due to                                                                    
the volume of  ammunition being sold around  the country. He                                                                    
thought  the  legislature  should consider  dedicating  more                                                                    
funds to shooting  ranges outside of the  three major ranges                                                                    
in  the state.  He thought  it was  beneficial for  youth to                                                                    
learn how to  handle firearms. He did not  think the funding                                                                    
was sufficient and suggested implementing a match.                                                                              
10:49:09 AM                                                                                                                   
AT EASE                                                                                                                         
10:53:22 AM                                                                                                                   
Senator  Wielechowski   wondered  whether  there   were  any                                                                    
federal funds  that were  available that  the state  did not                                                                    
Mr. Baker replied in the negative.                                                                                              
Senator  Wilson  wondered why  there  was  not more  federal                                                                    
funds  for  railroad  related  infrastructure  projects.  He                                                                    
asked how  many full-time equivalents (FTE)  would be needed                                                                    
and  whether the  positions would  be permanent.  He guessed                                                                    
the number would be around 25.                                                                                                  
Mr.  Steininger   replied  that  there  were   27  full-time                                                                    
positions  and five  non-permanent positions  represented in                                                                    
the  bill.  He stated  that  the  full-time positions  would                                                                    
exist within DEC to help  manage the significant increase in                                                                    
DEC  programs. He  noted  that many  of  the programs  would                                                                    
experience  a  five-year  increase,   however  some  of  the                                                                    
programs  could continue  for  a decade  which  was why  the                                                                    
decision was made to  add permanent positions. Additionally,                                                                    
the bill represented the federal  dollars that the state was                                                                    
certain would be incoming. There  may be other opportunities                                                                    
in the future to address other areas such as the railroad.                                                                      
Mr.  Baker furthered  that generally,  there was  no federal                                                                    
money  for the  purpose of  building new  rail, particularly                                                                    
not freight rail. There was  money for Amtrak and inner-city                                                                    
passenger rails,  but there  was no  new money  for capacity                                                                    
building  of  rails.  The Federal  Transit  Administration's                                                                    
(FTA) transit  formula programs could elicit  an increase in                                                                    
money  for  railroads  in  the   state  based  on  passenger                                                                    
traffic. There  were some existing grant  programs for which                                                                    
the Alaska railroad was eligible  and regularly applied for,                                                                    
but there were no new funding sources for the railroad.                                                                         
Senator Wilson asked if the  administration had considered a                                                                    
passenger rail from the Mat-Su area to Anchorage.                                                                               
Mr.  Baker   responded  that  the  administration   had  not                                                                    
considered a passenger rail.                                                                                                    
10:57:54 AM                                                                                                                   
Senator Wielechowski  asked if  there were  federal commuter                                                                    
dollars that the state could utilize.                                                                                           
Mr.  Baker  responded  that  there  were  competitive  grant                                                                    
programs. The largest  driver of whether a  rail received an                                                                    
award was based  on whether the rail would  assist in moving                                                                    
passenger traffic  off roads  and onto  centralized transit.                                                                    
He  thought a  new capacity  rail such  as a  passenger rail                                                                    
from  Mat-Su  to  Anchorage  would   be  challenged  in  the                                                                    
opportunities  in  the  bill. However,  it  might  be  worth                                                                    
looking  into  if  the  municipalities  and  the  rail  were                                                                    
Mr. Steininger  furthered that if  there was money  that was                                                                    
coming into  the state  for the railroad  that did  not pass                                                                    
through   the  Department   of  Transportation   and  Public                                                                    
Facilities, it  would not  be included  in the  bill because                                                                    
the railroad  was not subject  to the Alaska Budget  Act. He                                                                    
explained  that if  the Alaska  railroad  received a  direct                                                                    
grant, it  would not  be included  in an  appropriation bill                                                                    
coming from  OMB because  the railroad  was exempt  from the                                                                    
Co-Chair Bishop  noted that the committee  would discuss the                                                                    
bill  again in  the future.  He  wanted to  ensure that  the                                                                    
appropriate agencies would be  present at future meetings to                                                                    
answer questions.                                                                                                               
SB  241  was  HEARD  and   HELD  in  committee  for  further                                                                    
11:00:51 AM                                                                                                                   
The meeting was adjourned at 11:00 a.m.                                                                                         

Document Name Date/Time Subjects
041322 Senate Finance.April 13 2022.Robinson.pdf SFIN 4/13/2022 9:00:00 AM
SB 241 22.04.06 GOV Infrastructure Bill SFIN FINAL.pdf SFIN 4/13/2022 9:00:00 AM
SFIN 4/19/2022 9:00:00 AM
SB 241