Legislature(2021 - 2022)SENATE FINANCE 532

05/03/2022 01:00 PM Senate FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled: TELECONFERENCED
Heard & Held
-- Public Testimony <Time Limit May Be Set> --
Moved SCS CSHB 281(FIN) Out of Committee
Moved SCS CSHB 282(FIN) Out of Committee
Heard & Held
                  SENATE FINANCE COMMITTEE                                                                                      
                         May 3, 2022                                                                                            
                          1:18 p.m.                                                                                             
1:18:07 PM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Bishop called the  Senate Finance Committee meeting                                                                    
to order at 1:18 p.m.                                                                                                           
MEMBERS PRESENT                                                                                                               
Senator Click Bishop, Co-Chair                                                                                                  
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
Senator Bill Wielechowski                                                                                                       
Senator David Wilson                                                                                                            
MEMBERS ABSENT                                                                                                                
Senator Natasha von Imhof                                                                                                       
ALSO PRESENT                                                                                                                  
Senator Mike  Shower, Sponsor; Colleen Evans,  Self, Juneau;                                                                    
Rich  Anderson, Self,  Juneau; Cindy  Fuller, Self,  Juneau;                                                                    
Steve Fuller,  Self, Juneau; Rebecca Dundore,  Self, Juneau;                                                                    
Darrell Harmon, Self, Juneau; Lisa  Ward, Self, Juneau; Cody                                                                    
Grussendorf, Staff  to Senator Bishop; Pete  Ecklund, Staff,                                                                    
Senator Bert Stedman;  Alexei Painter, Director, Legislative                                                                    
Finance Division.                                                                                                               
PRESENT VIA TELECONFERENCE                                                                                                    
Matt  Roe,  Voting   Works,  California;  Logan  Churchwell,                                                                    
Research   Director,  Public   Interest  Legal   Foundation,                                                                    
Oklahoma;  Barbara Tyndall,  Self,  North  Pole; Jean  Holt,                                                                    
Self,  Palmer;  Shelly  Shoupe, Self,  Moose  Creek;  Murray                                                                    
Walsh, Chair,  Alaska Republican Party, District  4, Juneau;                                                                    
Randy  Ruedrich,  Self,  Anchorage; Charles  Perrett,  Self,                                                                    
Glennallen;   Anna  Mackinnon,   Director,  Permanent   Fund                                                                    
Dividend Division, Juneau; Charlie  Franz, Self, Homer; Gary                                                                    
Tyndall,  Self,  North  Pole; Herman  Morgan,  Self,  Aniak;                                                                    
Bonnie Lucas,  National Federation  of the Blind  of Alaska,                                                                    
Anchorage; Robert  Welton, Self,  Douglas; Ann  Brown, Self,                                                                    
Anchorage;  Cheng Saechao,  Self, Mat-Su;  Ray Kreig,  Self,                                                                    
Anchorage;  Carol  Cooper,  Self, Soldotna;  Kathy  Swanson,                                                                    
Self,  Juneau; Linda  Newman,  Self,  Juneau; Brent  Turner,                                                                    
Self, California; Mike Swain,  Self, Anchorage; Marlene Moto                                                                    
Karl, Self, Deering; Kelly Nash, Self, Fairbanks.                                                                               
SB 39     BALLOT CUSTODY/TAMPERING; VOTER REG; MAIL                                                                             
          SB 39 was HEARD and HELD in committee for further                                                                     
SB 164    APPROP: CAP; REAPPROP; SUPP                                                                                           
          SB 164 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
CSHB 281(FIN) am(brf sup maj fld)(efd fld)                                                                                      
          APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
          SCS CSHB 281(FIN) was REPORTED out of committee                                                                       
          with two "do pass" recommendations and with four                                                                      
          "amend" recommendations.                                                                                              
CSHB 282(FIN)                                                                                                                   
          APPROP: MENTAL HEALTH BUDGET                                                                                          
          SCS CSHB 282(FIN) was REPORTED out of committee                                                                       
          with three "do pass" recommendations and with                                                                         
          three "no recommendation" recommendations.                                                                            
1:18:37 PM                                                                                                                    
AT EASE                                                                                                                         
1:19:15 PM                                                                                                                    
Co-Chair Bishop discussed the agenda.                                                                                           
SENATE BILL NO. 39                                                                                                            
     "An  Act  relating  to  elections;  relating  to  voter                                                                    
     registration;  relating  to  ballots and  a  system  of                                                                    
     tracking  and accounting  for ballots;  establishing an                                                                    
     election  offense hotline;  designating  as  a class  A                                                                    
     misdemeanor  the  collection   of  ballots  from  other                                                                    
     voters;   designating  as   a   class   C  felony   the                                                                    
     intentional opening or tampering  with a sealed ballot,                                                                    
     certificate,    or   package    of   ballots    without                                                                    
     authorization  from the  director  of  the division  of                                                                    
     elections; and providing for an effective date."                                                                           
1:19:59 PM                                                                                                                    
Co-Chair Bishop invited the sponsor  to make an introduction                                                                    
of his invited testifiers.                                                                                                      
1:20:09 PM                                                                                                                    
SENATOR  MIKE SHOWER,  SPONSOR,  noted that  there were  two                                                                    
experts available  to speak to  national best  practices and                                                                    
the open-source concept.                                                                                                        
1:20:58 PM                                                                                                                    
MATT  ROE, VOTING  WORKS,  CALIFORNIA (via  teleconference),                                                                    
explained that  Voting Works  was a  non-partisan non-profit                                                                    
organization that  built election  software. He  stated that                                                                    
the  goal of  his  testimony was  to  briefly describe  what                                                                    
open-source  software was  and  how it  applied to  election                                                                    
administration.  He stated  he  would be  speaking from  his                                                                    
experience implementing  open-source software but  would not                                                                    
be speaking  to the specifics  of Voting Works  products. He                                                                    
explained  that  the "source"  in  open  source referred  to                                                                    
source code,  which was the  set of instructions  written by                                                                    
programmers that  a computer follows to  achieve the desired                                                                    
software's  behavior. He  used  an example  of source  code,                                                                    
which he  described as  "a complicated  recipe for  baking a                                                                    
cake," but qualified that for  most software the source code                                                                    
was  kept   secret  and  available  only   to  the  original                                                                    
programmers.  By contrast,  open-source software  had source                                                                    
code that was  always available to anyone who  wished to see                                                                    
Mr. Roe continued his remarks.  He asserted that much of the                                                                    
software used  today (including all  major web  browsers and                                                                    
much  of  software  that  powered  the  internet)  was  open                                                                    
source. He  emphasized that the  key benefit  of open-source                                                                    
technology  was  transparency.  He  cited  that  open-source                                                                    
software  was  used  in  almost  every  industry,  including                                                                    
scientific   research,   financial  services,   and   cyber-                                                                    
security.  He  asserted  that  in   the  world  of  election                                                                    
administration,    especially   when    the   country    was                                                                    
particularly polarized, open-source  transparency provided a                                                                    
common ground of  facts that could be  trusted and verified.                                                                    
He  described  malicious  code  that  changed  votes  as  an                                                                    
example of a problem that  could be dispelled by a technical                                                                    
review   of  the   open-source  code.   He  emphasized   the                                                                    
importance of  proper security  procedures, which  should be                                                                    
transparent.  He  mentioned  the  public  accountability  of                                                                    
election officials.                                                                                                             
1:25:00 PM                                                                                                                    
Mr.  Roe wanted  to discuss  how open-source  voting systems                                                                    
were used  in practice. He asserted  that open-source voting                                                                    
systems were  used just like  any other voting  system, with                                                                    
well-established  practices  for  certifying,  testing,  and                                                                    
operating voting equipment that  would not change. He stated                                                                    
that the only  change introduced to the  election process by                                                                    
open-source  software would  be  increased transparency  and                                                                    
public confidence  in the election  outcome. He  opined that                                                                    
SB 39  represented a  non-partisan commitment  to increasing                                                                    
the   transparency  and   security   of  Alaskan   elections                                                                    
throughout  the entire  cycle of  the election.  He asserted                                                                    
that   voter   registration   and   signature   verification                                                                    
improvements  ensured  that  only  legitimate  ballots  were                                                                    
cast. He  continued that open-source software  would provide                                                                    
transparency   to  ballot   counting,  while   post-election                                                                    
auditing would confirm the election outcomes.                                                                                   
Senator  Wielechowski  guessed   that  open-source  election                                                                    
software would be meaningless to  over 90 percent of people.                                                                    
He  asked if  the open-source  software made  it easier  for                                                                    
hackers to exploit security flaws in the system.                                                                                
Mr.  Roe thought  it was  well  understood that  open-source                                                                    
software  increased  security,  as  transparency  encouraged                                                                    
secure  software  development.  He  used  the  example  that                                                                    
everyone  drove the  speed  limit when  driving  by a  state                                                                    
trooper,  yet  many sped  up  when  the trooper  exited  the                                                                    
highway.  He  suggested that  lack  of  transparency led  to                                                                    
sloppy shortcuts and insecure  coding practices. He asserted                                                                    
that when software  was designed in the open,  it provided a                                                                    
strong incentive to properly design the software.                                                                               
Mr.  Roe  continued designing  in  the  view of  the  public                                                                    
strongly  encouraged separation  between  the public  source                                                                    
code and  the secret  bit used to  operate the  software. He                                                                    
used the example  of the secret keys used  to digitally sign                                                                    
files.  He cited  that recent  United  States Department  of                                                                    
Defense (DOD)  memos on  open-source software  supported his                                                                    
perspective.  He   relayed  that   according  to   the  DOD,                                                                    
releasing  source  code  did not  give  attackers  an  edge,                                                                    
because  attackers  found  pathways  that  did  not  involve                                                                    
looking at  source code.  He quoted the  DOD in  saying that                                                                    
making  source code  available to  the public  significantly                                                                    
aids defenders  continuous and broad peer  review to improve                                                                    
software reliability and security.  He opined that there was                                                                    
no downside  to releasing source  code to the  public, while                                                                    
there was plenty of upsides.                                                                                                    
1:29:45 PM                                                                                                                    
LOGAN CHURCHWELL,  RESEARCH DIRECTOR, PUBLIC  INTEREST LEGAL                                                                    
FOUNDATION,  OKLAHOMA (via  teleconference), explained  that                                                                    
the  Public  Interest Legal  Foundation  (PILF)  was a  non-                                                                    
partisan,   non-profit  law   firm  dedicated   to  election                                                                    
integrity. He  told a  story from  2011 about  an individual                                                                    
named John that  registered to vote in  Alaska despite being                                                                    
a   foreign  national.   He  had   used  a   standard  paper                                                                    
application and  indicated he  was a  citizen of  the United                                                                    
States. He described the  ballot, which contained qualifying                                                                    
information such  as an address and  demographic information                                                                    
such as a date of birth. He  had a copy of the document that                                                                    
was redacted. The application had been approved.                                                                                
Mr.  Churchwell continued  his remarks.  He relayed  that in                                                                    
2014  a  comparison  was performed  between  Alaska's  voter                                                                    
rolls against the Permanent  Fund Dividend (PFD) recipients.                                                                    
At the time, the applicant  he described had applied for the                                                                    
PFD  and  indicated he  was  not  a  U.S. Citizen,  and  the                                                                    
discrepancy was  caught. The Division of  Elections had sent                                                                    
the individual  a letter informing  that it was  illegal for                                                                    
non-citizens  to be  registered  to vote.  The division  had                                                                    
included a form indicating that  he was not a citizen, which                                                                    
he  sent  back and  was  then  removed  from the  rolls.  He                                                                    
thought that the case was  proof of concept that when Alaska                                                                    
engaged in in best practices  to maintain its voter rolls on                                                                    
a permanent  and comprehensive basis, the  roll could become                                                                    
more accurate.                                                                                                                  
Mr.  Churchwell thought  the  heart of  SB  39 required  the                                                                    
development  of   annual  practices  to  assess   faulty  or                                                                    
outdated voter registration records  such as those that were                                                                    
deceased,  convicted of  felonies,  were out  of state,  are                                                                    
foreign   nationals,  or   other  cases   with  questionable                                                                    
eligibility.  The   bill  would  require  the   Division  of                                                                    
Elections  to provide  disclosures  involving data  breaches                                                                    
and   voter  registration   totals   relative  to   eligible                                                                    
population.  He mentioned  bloated voter  rolls. He  thought                                                                    
the bill proposed common-sense  measures that were regularly                                                                    
seen in other states.                                                                                                           
Mr.   Churchwell  asserted   that  Alaska   had  held   more                                                                    
registered  voters than  eligible adults  of voting  age per                                                                    
the U.S. Census. He thought SB  39 followed a clear plan for                                                                    
voter  roll  maintenance   updates  while  also  envisioning                                                                    
necessary  guardrails  to  make  sure errors  and  bad  data                                                                    
complicated the  process. He discussed best  practices which                                                                    
took  Alaska's voter  data and  compared it  with data  from                                                                    
other government sources.                                                                                                       
1:34:59 PM                                                                                                                    
Mr.  Churchwell  continued   his  testimony.  He  referenced                                                                    
different federal data sources,  such as the national change                                                                    
of address  system. He emphasized that  Alaska was expending                                                                    
taxpayer funds  to subscribe to  the data sources.  The bill                                                                    
required  that  additional  data (such  as  social  security                                                                    
numbers) would be matched. He  discussed concerns with false                                                                    
positives. He discussed best practices  and used the example                                                                    
of  Kentucky,  which  he thought  had  similar  problems  to                                                                    
Alaska.  He   questioned  how  the  state   would  tell  the                                                                    
difference  between negligence  and sabotage  and emphasized                                                                    
the need for best practices.                                                                                                    
1:37:21 PM                                                                                                                    
Co-Chair Bishop OPENED public testimony.                                                                                        
COLLEEN EVANS, SELF, JUNEAU, spoke  in support of SB 39. She                                                                    
thanked  the committee  members for  their work.  She shared                                                                    
that she was a parent,  volunteer, and business owner in the                                                                    
community. She shared her desire for transparency.                                                                              
She thought SB 39 would  provide transparency. She urged the                                                                    
committee to support the bill.                                                                                                  
1:39:44 PM                                                                                                                    
RICH ANDERSON, SELF, JUNEAU, spoke  in favor of the bill. He                                                                    
thought  the  system  needed  to  be  fixed.  He  referenced                                                                    
troubles   with   the    federal   elections.   He   thought                                                                    
transparency was important from the  beginning to the end of                                                                    
the election  process. He  mentioned upcoming  elections. He                                                                    
mentioned ranked choice voting.                                                                                                 
1:42:13 PM                                                                                                                    
CINDY FULLER,  SELF, JUNEAU, spoke  in support of  the bill.                                                                    
She had registered  to vote at age eighteen.  She had worked                                                                    
as a volunteer  at a voting station. She  thought things had                                                                    
changed in  the last two  elections. She recounted  that her                                                                    
ballot  had  not  counted  in  the  first  mail-in  election                                                                    
because of an unmatched signature,  and she had no recourse.                                                                    
She  had stood  in line  for  45 minutes  during a  previous                                                                    
election and had  her ballot counted. She  preferred to vote                                                                    
in  person.  She  did  not  think  mail-in  voting  was  not                                                                    
realistic. She did  not think the bill went  far enough. She                                                                    
thought ballots should not be counted by machines.                                                                              
1:44:52 PM                                                                                                                    
STEVE  FULLER, SELF,  JUNEAU, testified  in  support of  the                                                                    
bill. He  was a  long time Juneau  resident. He  thanked the                                                                    
co-chairs. He wanted more trust and transparency in voting.                                                                     
1:45:37 PM                                                                                                                    
REBECCA  DUNDORE,  SELF, JUNEAU,  spoke  in  support of  the                                                                    
bill.  She thanked  the committee.  She thought  the current                                                                    
voting situation was scary. She  did not think the bill went                                                                    
far enough.                                                                                                                     
1:46:29 PM                                                                                                                    
DARRELL HARMON,  SELF, JUNEAU, testified  in support  of the                                                                    
bill.  He had  lived  in Juneau  for most  of  his life.  He                                                                    
wanted change in order to  have less question about election                                                                    
results. He  thought if the  state was susceptible  to being                                                                    
hacked  by Russia  to  sway viewpoints  for  the effects  of                                                                    
chaos,  that the  same  was possible  to  affect the  voting                                                                    
system. He thought both political  parties should be equally                                                                    
interested in fixing the problem.                                                                                               
1:48:11 PM                                                                                                                    
BARBARA  TYNDALL,  SELF,  NORTH POLE  (via  teleconference),                                                                    
spoke in support  of the bill. She thanked  the sponsor. She                                                                    
had been active in her district,  by going door to door. She                                                                    
had  gleaned that  there was  great distrust  in the  voting                                                                    
system.  She  thought  electronic  elections  equipment  was                                                                    
vulnerable and should  be banned. She was  a precinct worker                                                                    
and  thought  the  ballots  could  be  easily  counted.  She                                                                    
mentioned ballot  harvesting. She  thought the  state needed                                                                    
to reestablish voting integrity and fix the voter rolls.                                                                        
1:50:11 PM                                                                                                                    
JEAN HOLT,  SELF, PALMER (via teleconference),  testified in                                                                    
support of the bill. She  thanked the committee members. She                                                                    
thought   that   the   present-day  election   process   was                                                                    
questioned by many voters. She  mentioned scare tactics used                                                                    
by  opponents of  SB 39.  She  thought SB  39 addressed  all                                                                    
aspects  of the  voting system,  and restored  confidence in                                                                    
the election process.                                                                                                           
1:52:02 PM                                                                                                                    
SHELLY  SHOUPE,  SELF,  MOOSE  CREEK  (via  teleconference),                                                                    
spoke  in support  of the  bill. She  thought much  had been                                                                    
stripped  from the  bill, but  thought the  bill was  a good                                                                    
start  in  fixing  the  problems  in  the  state's  election                                                                    
systems.  She  thought the  bill  should  be a  non-partisan                                                                    
issue.  She mentioned  cleaning  up voter  rolls and  ballot                                                                    
harvesting.  She emphasized  that the  state must  move away                                                                    
from mail-in ballots.                                                                                                           
1:53:06 PM                                                                                                                    
MURRAY WALSH,  CHAIR, ALASKA  REPUBLICAN PARTY,  DISTRICT 4,                                                                    
JUNEAU  (via teleconference),  testified in  support of  the                                                                    
bill. He had sent a  message to the committee regarding what                                                                    
he considered  problems with the Senate  Judiciary Committee                                                                    
CS. He  cited that  the provision for  same-day registration                                                                    
would burden  election workers and favored  requiring voters                                                                    
to  register  30  days  before  an  election.  He  mentioned                                                                    
transparency. He  asked the committee to  reconsider the CS,                                                                    
perhaps for a more comprehensive fix.                                                                                           
1:55:11 PM                                                                                                                    
RANDY RUEDRICH, SELF,  ANCHORAGE (via teleconference), spoke                                                                    
in support of the bill. He  asserted that the current CS for                                                                    
SB  39  had several  issues.  He  cited  that the  bill  was                                                                    
completely  silent on  the topic  of the  modifying the  PFD                                                                    
automatic  voter registration.  He thought  the Division  of                                                                    
Elections had  requested an opt-in provision  be adopted for                                                                    
the  method  of registration.  He  urged  that the  bill  be                                                                    
amended.  He   opposed  same-day  voter   registration,  and                                                                    
thought it was related to  low integrity elections. He had a                                                                    
specific    concern   relating    to   four-year    absentee                                                                    
applications. He  cited that 89  percent of all  the ballots                                                                    
mailed  out  were not  returned.  He  thought the  CS  would                                                                    
prohibit any  infilling of  an absentee  ballot application.                                                                    
He  discussed  tabulators,  which  had  been  used  in  four                                                                    
recounts. He stressed the need for trustworthy equipment.                                                                       
1:58:38 PM                                                                                                                    
CHARLES  PERRETT,  SELF,  GLENNALLEN  (via  teleconference),                                                                    
testified in  support of SB  39. He lauded  transparency and                                                                    
honesty in  elections. He  thought the bill  did not  go far                                                                    
enough. He  expressed a concern with  election integrity. He                                                                    
relayed that  he and his  circle of friends had  very little                                                                    
confidence in  the system.  He thought  the system  had been                                                                    
rigged  and abused.  He wanted  to  make the  act of  ballot                                                                    
harvesting a  crime greater than  a misdemeanor.  He thought                                                                    
that democracy was  at stake if measures were  not taken. He                                                                    
thanked the bill sponsor.                                                                                                       
2:01:04 PM                                                                                                                    
ANNA MACKINNON, DIRECTOR,  PERMANENT FUND DIVIDEND DIVISION,                                                                    
JUNEAU  (via teleconference),  stated she  was available  to                                                                    
answer questions.                                                                                                               
2:01:37 PM                                                                                                                    
CHARLIE FRANZ,  SELF, HOMER  (via teleconference),  spoke in                                                                    
support of  SB 39. He  was not  satisfied that the  bill had                                                                    
all the  needed components,  but he thought  it was  a major                                                                    
step forward.  He thought the  legislature needed to  act in                                                                    
order to reinstate public confidence in elections.                                                                              
2:02:19 PM                                                                                                                    
GARY  TYNDALL,   SELF,  NORTH  POLE   (via  teleconference),                                                                    
testified in support of the  bill. He was convinced that the                                                                    
integrity of Alaska's election  process had been compromised                                                                    
and  needed  reform.  He   supported  in-person  voting.  He                                                                    
supported   elimination   of  mail-in   voting,   electronic                                                                    
machines, ballot  harvesting, automatic  voter registration,                                                                    
and  early  voting. He  thought  absentee  voting should  be                                                                    
restricted to  specific categories  such as  active military                                                                    
personnel  and people  with disabilities.  He thought  voter                                                                    
registration rolls needed to be  rebuilt. He did not support                                                                    
ranked choice voting.                                                                                                           
2:04:06 PM                                                                                                                    
HERMAN MORGAN,  SELF, ANIAK  (via teleconference),  spoke in                                                                    
support  of  the  bill. He  emphasized  that  elections  had                                                                    
consequences. He mentioned  gerrymandering, voter fraud, and                                                                    
election tampering.  He did not  support voting by  mail. He                                                                    
was concerned about foreign nationals  voting. He quoted the                                                                    
2:06:55 PM                                                                                                                    
BONNIE LUCAS,  NATIONAL FEDERATION  OF THE BLIND  OF ALASKA,                                                                    
ANCHORAGE  (via  teleconference),  explained  that  she  was                                                                    
president of the National Federation  of the Blind of Alaska                                                                    
and was a person with  blindness. She emphasized that it was                                                                    
imperative  for  legislators  to consider  absentee  digital                                                                    
voting   options   for   people   with   disabilities   when                                                                    
considering  election reform.  She  also had  a blind  adult                                                                    
child.  She  explained that  casting  a  private and  secure                                                                    
ballot  had  been very  challenging,  and  a digital  option                                                                    
would  solve  the  difficulties  she  had  experienced.  She                                                                    
mentioned examples such as  unrecognized signatures and long                                                                    
wait times for voting machines.  She emphasized the need for                                                                    
2:08:56 PM                                                                                                                    
LISA WARD, SELF,  JUNEAU, spoke in support of  the bill. She                                                                    
had several children of voting  age. She thought there was a                                                                    
deep  mistrust   of  the  system  and   thought  open  clear                                                                    
elections should be  a bipartisan issue. She  thought it was                                                                    
important  to  have  a  ballot chain  of  custody.  She  was                                                                    
incredulous that PFD rolls were  used for voter registration                                                                    
when  one did  not need  to be  a United  States Citizen  to                                                                    
receive the  PFD. She  supported in  person voting  and open                                                                    
polling stations. She did not  support ranked choice voting.                                                                    
She thought  votes should be  hand counted in  each district                                                                    
without machines being used.                                                                                                    
2:11:20 PM                                                                                                                    
ROBERT   WELTON,   SELF,   DOUGLAS   (via   teleconference),                                                                    
supported  the  bill. He  did  not  agree  with two  of  the                                                                    
provisions.   He  mentioned   Section  36,   which  required                                                                    
absentee voters  to reapply for absentee  ballots every four                                                                    
years. He did not think  the state should restrict the right                                                                    
of voting  by mail unless  there was compelling  evidence of                                                                    
fraud.  He   cited  that  the  Division   of  Elections  had                                                                    
testified on the record that  there was no significant fraud                                                                    
in  the  2020  election.  He referenced  Department  of  Law                                                                    
testimony, which  he thought  had proved  that there  was no                                                                    
significant fraud in absentee voting.  He did not agree with                                                                    
the   signature   verification  requirement   for   absentee                                                                    
ballots.  He referenced  Section 38  and Section  39 of  the                                                                    
Mr.  Welton continued  his testimony.  He  thought the  bill                                                                    
would open the door  to selectively reject absentee ballots.                                                                    
He referenced a similar law  in Texas, which had resulted in                                                                    
up to 12 percent of  ballots being rejected statewide, while                                                                    
before the law less than  1 percent of absentee ballots were                                                                    
rejected. He supported the other provisions of the bill.                                                                        
2:13:49 PM                                                                                                                    
ANN BROWN,  SELF, ANCHORAGE  (via teleconference),  spoke in                                                                    
support  of  the bill.  She  did  not support  the  proposed                                                                    
prohibition of  pre-filled information on  absentee ballots.                                                                    
She  thought  the  pre-filled  information  on  an  absentee                                                                    
ballot application increased the  likelihood the voter would                                                                    
complete  and submit  the application  in  a timely  manner.                                                                    
She suggested deletion of  the witness signature requirement                                                                    
on an absentee by mail ballot  envelope was not a good idea.                                                                    
She thought the witness  signature requirement greatly aided                                                                    
in the cause of election integrity.                                                                                             
2:15:22 PM                                                                                                                    
CHENG SAECHAO, SELF,  MAT-SU (via teleconference), testified                                                                    
in support of the bill.  He supported election integrity. He                                                                    
felt like  his vote did not  count in the 2020  election. He                                                                    
wanted to be able to trust in the voting system.                                                                                
2:16:23 PM                                                                                                                    
RAY KREIG,  SELF, ANCHORAGE  (via teleconference),  spoke in                                                                    
opposition to  the CS  for SB  39(JUD)    Version E.  He was                                                                    
part  of an  informal  group looking  at election  integrity                                                                    
reforms Anchorage. He had spoken  to the sponsor's staff and                                                                    
understood the  bill was  still a work  in progress.  He was                                                                    
opposed  to   same-day  registration,  elimination   of  the                                                                    
required witness signature,  and four-year absentee ballots.                                                                    
He questioned if there was  a definition of routine forensic                                                                    
exams. He did not support PFD automatic voter registration.                                                                     
2:18:22 PM                                                                                                                    
CAROL   COOPER,   SELF,   SOLDOTNA   (via   teleconference),                                                                    
testified  in  support  of  the  bill.  She  had  been  very                                                                    
concerned  about election  integrity in  the 2020  election.                                                                    
She thought  the bill  was a  good start  towards correcting                                                                    
the  problems.  She encouraged  the  committee  to pass  the                                                                    
2:19:14 PM                                                                                                                    
KATHY SWANSON, SELF,  JUNEAU (via teleconference), testified                                                                    
in support of the bill.  She referenced mail-in ballots that                                                                    
were rejected with no adjudicated  process. She was strongly                                                                    
against mail-in elections, which  she thought were rife with                                                                    
fraud. She recounted getting extra  ballots in the mail. She                                                                    
did  not support  same-day voter  registration. She  did not                                                                    
have a  problem with  absentee voting.  She did  not support                                                                    
automatic voter registration.                                                                                                   
2:21:28 PM                                                                                                                    
LINDA  NEWMAN,  SELF,  JUNEAU (via  teleconference),  shared                                                                    
that she  was a person with  low vision and could  not drive                                                                    
to a polling  station nor could she read  a standard ballot.                                                                    
She used  digital-access large print to  access information.                                                                    
She emphasized that digital access  be considered for people                                                                    
with low or no vision, who also had a right to vote.                                                                            
2:22:14 PM                                                                                                                    
BRENT   TURNER,  SELF,   CALIFORNIA  (via   teleconference),                                                                    
thanked  the committee  for consideration  of  the bill.  He                                                                    
stated that  some considered him  an expert in the  field of                                                                    
election  systems security  and technology.  He thanked  the                                                                    
committee  for   considering  the   bill.  He   praised  the                                                                    
heightening of  security and the  reduction of costs  by the                                                                    
consideration of  open-source software. He discussed  use of                                                                    
open-source software in California and Mississippi.                                                                             
2:23:55 PM                                                                                                                    
MIKE SWAIN, SELF,  ANCHORAGE (via teleconference), testified                                                                    
that he believed in less  government. He thought people were                                                                    
farming  personal information.  He  was against  replicating                                                                    
data. He  considered that the  signatures on the  outside of                                                                    
ballots were  a violation  of privacy. He  mentioned felons.                                                                    
He emphasized  the need for standardized  procedures. He the                                                                    
referenced separation of powers.                                                                                                
2:26:47 PM                                                                                                                    
MARLENE  MOTO  KARL,  SELF,  DEERING  (via  teleconference),                                                                    
testified  that  she  had  concerns  about  the  last  state                                                                    
election.  She discussed  a lack  of  election workers.  She                                                                    
discussed ballot  counting. She described working  as a poll                                                                    
worker.  She   pondered  whether  it  was   legal  for  city                                                                    
elections and state elections to be held at the same time.                                                                      
2:30:11 PM                                                                                                                    
KELLY NASH,  SELF, FAIRBANKS (via teleconference),  spoke in                                                                    
support  of  the  bill.  She was  the  founder  of  Interior                                                                    
Patriots. She was  appalled at the amount of  fraud that had                                                                    
happened  in the  previous two  days with  absentee ballots.                                                                    
She did not  support ranked choice voting.  She thought some                                                                    
elected officials did  not want fair elections.  She did not                                                                    
think the 2020 election had been safe and secure.                                                                               
2:32:00 PM                                                                                                                    
Co-Chair Bishop CLOSED public testimony.                                                                                        
Senator Shower thanked the committee.                                                                                           
Co-Chair Bishop handed the gavel to Co-Chair Stedman.                                                                           
2:32:24 PM                                                                                                                    
AT EASE                                                                                                                         
2:42:00 PM                                                                                                                    
Co-Chair Stedman  relayed that the committee  would consider                                                                    
the SB 164.                                                                                                                     
SENATE BILL NO. 164                                                                                                           
     "An  Act   making  appropriations,   including  capital                                                                    
     appropriations,     reappropriations,     and     other                                                                    
     appropriations;  making   supplemental  appropriations;                                                                    
     and providing for an effective date."                                                                                      
2:42:24 PM                                                                                                                    
Co-Chair   Bishop   MOVED   to  ADOPT   proposed   committee                                                                    
substitute  for SB  164,  Work  Draft 32-GS2436\O  (Dunmire,                                                                    
Co-Chair Stedman OBJECTED for discussion.                                                                                       
2:42:52 PM                                                                                                                    
CODY GRUSSENDORF,  STAFF TO  SENATOR BISHOP,  explained that                                                                    
the changes  to Version O  of the bill incorporated  all the                                                                    
amendments that  were adopted by the  committee the previous                                                                    
day. Additionally, the CS fixed  a technical drafting error.                                                                    
There had been an incorrect  reference in Section 30 (d), on                                                                    
page 72,  line 6. There  had been  a citation to  Section 1,                                                                    
which was changed to Section 4.                                                                                                 
Co-Chair Stedman WITHDREW his OBJECTION.                                                                                        
Senator Olson  OBJECTED for discussion. He  asked about what                                                                    
would happen to a number  of amendments that were considered                                                                    
but had not passed the previous day.                                                                                            
Co-Chair Stedman asked for clarification.                                                                                       
Senator Olson asked if the  amendments that did not pass the                                                                    
previous day would be reconsidered.                                                                                             
2:44:02 PM                                                                                                                    
AT EASE                                                                                                                         
2:44:26 PM                                                                                                                    
Senator  Olson  WITHDREW  his   OBJECTION.  There  being  NO                                                                    
further OBJECTION, it was so ordered.  The CS for SB 164 was                                                                    
CS FOR HOUSE BILL NO. 281(FIN) am(brf sup maj fld)(efd fld)                                                                   
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs;    capitalizing   funds;   amending                                                                    
     appropriations;  and   making  capital  appropriations,                                                                    
    supplemental appropriations, and reappropriations."                                                                         
2:44:51 PM                                                                                                                    
Co-Chair   Bishop   MOVED   to  ADOPT   proposed   committee                                                                    
substitute for CSHB 281(FIN),  Work Draft 32-GH2686\K (Marx,                                                                    
Co-Chair Stedman OBJECTED for discussion.                                                                                       
2:45:13 PM                                                                                                                    
PETE  ECKLUND, STAFF,  SENATOR BERT  STEDMAN, recalled  that                                                                    
the committee  previously considered Version L  of the bill,                                                                    
at which  time it  considered 29 amendments.  The amendments                                                                    
that were  adopted had  been incorporated  into the  new CS,                                                                    
Version K.                                                                                                                      
Co-Chair  Stedman WITHDREW  his  OBJECTION.  There being  NO                                                                    
further OBJECTION, it was so ordered.                                                                                           
2:46:13 PM                                                                                                                    
Co-Chair   Bishop   MOVED   to  ADOPT   proposed   committee                                                                    
substitute for CSHB 281(FIN),  Work Draft 32-GH2686\Y (Marx,                                                                    
Co-Chair Stedman OBJECTED for discussion.                                                                                       
Mr.  Ecklund explained  that the  proposed CS  for CSHB  281                                                                    
(Version Y) simply merged the  previously adopted CS from SB
164 (Version O) and the  previously adopted CS from CSHB 281                                                                    
(Version K).  The proposed CS  was an  omnibus appropriation                                                                    
bill  that  had  capital   items,  supplemental  items,  and                                                                    
operating items.                                                                                                                
Senator  Wielechowski asked  if  the  proposed CS  contained                                                                    
only amendments passed in the committee.                                                                                        
Mr. Ecklund answered affirmatively.                                                                                             
Co-Chair  Stedman WITHDREW  his  OBJECTION.  There being  NO                                                                    
further  OBJECTION,  it was  so  ordered.  The CS  for  CSHB
281(FIN) Version Y was ADOPTED.                                                                                                 
2:47:50 PM                                                                                                                    
AT EASE                                                                                                                         
2:49:20 PM                                                                                                                    
Co-Chair Stedman  explained that  the committee  had adopted                                                                    
the omnibus bill and mentioned  that copies of the different                                                                    
versions  of the  bill were  available. Additionally,  there                                                                    
was a spreadsheet  entitled "Handout D" (copy  on file) that                                                                    
would  show  school  bond  debt  reimbursement  figures.  He                                                                    
relayed that  the Legislative  Finance Division  (LFD) would                                                                    
be  posting more  fiscal  reports on  the  omnibus bill  and                                                                    
other matters to its website.                                                                                                   
2:50:17 PM                                                                                                                    
ALEXEI  PAINTER,  DIRECTOR,  LEGISLATIVE  FINANCE  DIVISION,                                                                    
introduced himself. He showed slide 2, "Outline":                                                                               
     ? Volatility and Spring Revenue Forecast                                                                                   
     ? Updated Fiscal Summary with Senate Finance CS (SFIN                                                                      
     ? Operating Budget Growth                                                                                                  
     ? Position Count Growth                                                                                                    
Mr. Painter addressed slide 3,  "Oil Price Forecast Update,"                                                                    
which  showed a  line  graph.  He cited  that  the data  was                                                                    
pulled from the futures market  the previous day. The spring                                                                    
forecast was  depicted by the  red line and called  for $101                                                                    
per barrel (bbl)  price of oil for 2023.  The futures market                                                                    
the previous  day had shown  the price to be  about $99/bbl,                                                                    
while the  oil price for  FY 22  was running about  $2 under                                                                    
the  forecast. He  summarized that  the  fiscal summary  was                                                                    
close  to the  spring  forecast, but  currently the  futures                                                                    
were slightly  below. He commented  on the  price volatility                                                                    
throughout the year.                                                                                                            
2:51:33 PM                                                                                                                    
AT EASE                                                                                                                         
2:51:51 PM                                                                                                                    
Mr.  Painter advanced  to slide  4,  "Oil Prices,  FY 22  to                                                                    
Date," which  showed a line  graph entitled 'ANS  West Coast                                                                    
Price.' He  noted that the  brackets on the  graph indicated                                                                    
that the Department of Revenue  had done the spring forecast                                                                    
on the period based on the  futures in that week. Since that                                                                    
time, prices  had been extremely  volatile, dipping  down as                                                                    
low  as $100/bbl  and up  to $120/bbl.  He asked  members to                                                                    
keep in  mind that the  level of volatility during  the year                                                                    
had been high.                                                                                                                  
Mr.  Painter addressed  slide 5,  "FY Oil  Price Sensitivity                                                                    
Chart," which showed  a graph entitled 'FY23  UGF Revenue by                                                                    
ANS Price  (Excluding POMV).' He  summarized that  as prices                                                                    
increased,  revenue increased.  The  spring forecast  showed                                                                    
$101/bbl  oil,  which  was  down  to  about  $99/bbl,  which                                                                    
signified a reduction  in revenue of about  $190 million. He                                                                    
explained that  there were "stair-steps" in  DOR's forecast.                                                                    
He noted that the line was  not a fixed curve. He noted that                                                                    
when  the  state was  trying  to  balance the  budget  while                                                                    
relying  on high  oil prices  rather than  savings accounts,                                                                    
LFD had historically recommended  that the legislature use a                                                                    
sensitivity chart to  give a better idea of  where the state                                                                    
would be if prices did not meet the forecast expectation.                                                                       
He encouraged members  to consider a wider span  of the line                                                                    
than just looking specifically at $101/bbl oil.                                                                                 
2:54:07 PM                                                                                                                    
Mr.  Painter  spoke  to slide  6,  "Fiscal  Summary:  Senate                                                                    
Finance Budget, Spring Forecast  (UGF only)," which showed a                                                                    
data  table. He  highlighted  that the  top showed  revenue,                                                                    
projected  to be  just  shy of  $7  billion of  Unrestricted                                                                    
General Fund (UGF) revenue in  FY 22, and about $8.3 billion                                                                    
in FY 23. He pointed out  appropriations on line 6, with the                                                                    
operating budget in FY 22  (including supplementals) at $4.9                                                                    
billion and a  bit over $5 billion in FY  23. He pointed out                                                                    
agency operations  shown on line  8 increasing year  to year                                                                    
by $263.9 million.                                                                                                              
Mr. Painter noted that there  was a placeholder for the K-12                                                                    
disparity test. There was still  an ongoing concern that the                                                                    
state might  fail the K-12  disparity test, with  an ongoing                                                                    
appeal  with the  federal Department  of  Education. If  the                                                                    
state failed  the test,  it would add  $72.4 million  to the                                                                    
state's UGF  expenditures in FY  22 and $74.6 million  in FY                                                                    
23. He included the amount in the fiscal summary on line 9.                                                                     
Mr. Painter  continued to address  the fiscal  summary table                                                                    
on slide  6. He  highlighted that  line 10  showed statewide                                                                    
items, with  an increase of  $349 million  from FY 22  to FY                                                                    
23, primarily  caused from  oil and  gas tax  credits. There                                                                    
was  $54 million  paid out  in the  FY 22  budget, and  $349                                                                    
million in the current budget.  The other major increase was                                                                    
a deposit  to the retirement funds  to make up for  the zero                                                                    
funding of  healthcare by  the Alaska  Retirement Management                                                                    
(ARM) Board.  He noted that  he would discuss the  item more                                                                    
later in the presentation.                                                                                                      
Mr.  Painter  summarized that  there  was  a bit  over  $500                                                                    
million  of  operating  supplementals  in  the  budget,  the                                                                    
largest   of   which   referred    to   school   bond   debt                                                                    
reimbursements  that  paid  back   past  amounts  unpaid  in                                                                    
previous  years.  Similarly,  the  funds  would  go  towards                                                                    
paying  unpaid amounts  for Regional  Educational Attendance                                                                    
Area (REAA) Fund  and Community Assistance, and  oil and gas                                                                    
tax  credits. He  summarized that  the primary  supplemental                                                                    
items made  up for  past years.  Three were  other increases                                                                    
relating to  fire suppression and the  Disaster Relief Fund.                                                                    
Line  12 showed  the capital  budget, which  was split.  The                                                                    
previous  year  there had  been  $242.9  million in  capital                                                                    
appropriations. The  current capital  budget was  split with                                                                    
$324.6 million  in FY 22,  and $407.4  million in FY  23. He                                                                    
summarized that  up for consideration  was a  capital budget                                                                    
of about $730 million of UGF across the two fiscal years.                                                                       
2:57:50 PM                                                                                                                    
Mr. Painter  pointed out that  line 16 showed  the Permanent                                                                    
Fund  Dividend. He  recounted that  the previous  fall there                                                                    
was an  approximately $1,100 PFD  paid out, and  the current                                                                    
budget included a  dividend of 50 percent of  the percent of                                                                    
market value (POMV) draw, which  was estimated to be between                                                                    
$2,500  and  $2,600 per  person.  Line  18 showed  that  the                                                                    
budget  included   $199  million  to  deposit   past  unpaid                                                                    
royalties into the  corpus of the Permanent Fund  to make up                                                                    
for amounts  that were not  paid in FY  17 and FY  18. There                                                                    
was a  pre-transfer surplus in  FY 22 of about  $550 million                                                                    
and about $1.2 billion in FY 23.                                                                                                
Mr.  Painter  pointed  out that  forward  funding  for  K-12                                                                    
education was moved  down to the fund transfers  on line 23,                                                                    
in  order to  be consistent  with how  LFD treated  forward-                                                                    
funding of K-12 in the  previous period when it was forward-                                                                    
funded. He  explained that  when the  state did  not forward                                                                    
fund,  the  Public  Education  Fund   behaved  like  a  fund                                                                    
capitalization  and would  be  in a  different  part of  the                                                                    
fiscal summary.  He thought  the method  made for  a cleaner                                                                    
fiscal  summary than  prior  versions,  because the  forward                                                                    
funding was a form of savings.                                                                                                  
Mr.  Painter  highlighted  the bottom  line  of  the  fiscal                                                                    
summary,  which  showed  a  post-transfer  surplus  of  $832                                                                    
million in FY  22. The line above showed  $660 million being                                                                    
deposited into  the Statutory Budget Reserve  (SBR), and the                                                                    
combined amounts  would result in  just shy of  $1.5 billion                                                                    
expected to go into the SBR in FY  22. In FY 23, there was a                                                                    
post-transfer surplus of $87.4  million that would similarly                                                                    
go in the SBR. In FY  23, the budget-balancing oil price was                                                                    
about  $99/bbl. If  the  oil price  was  above $99/bbl,  the                                                                    
surplus would  go into the  Permanent Fund as shown  on line                                                                    
22. He qualified that the  K-12 forward funding amount would                                                                    
prorate  downward  if the  revenue  was  not available.  The                                                                    
budget balancing  oil price without forward  funding dropped                                                                    
down to $84/bbl.                                                                                                                
3:00:54 PM                                                                                                                    
Mr.  Painter  spoke  to slide  7,  "Fiscal  Summary:  Senate                                                                    
Finance Budget,  $84 Oil  (UGF only),"  which showed  a data                                                                    
table. He  highlighted changes in  the case of  $84/bbl oil,                                                                    
including statewide  items on line  10. The oil and  gas tax                                                                    
credit amount would  decrease, as it was a  formula based on                                                                    
oil  revenue.  He  highlighted   that  the  deposit  to  the                                                                    
Permanent Fund  shown on  line 22 would  not happen,  and at                                                                    
$84/bbl  oil  there would  be  $36  million extra  put  into                                                                    
forward funding.                                                                                                                
Co-Chair  Stedman   asked  if  Mr.  Painter   could  discuss                                                                    
backstop or backfill language from the SBR.                                                                                     
Mr.  Painter  explained  that  many  times  there  would  be                                                                    
language  in  the budget  in  the  case  of a  deficit  that                                                                    
allowed   for  the   difference   to  be   drawn  from   the                                                                    
Constitutional Budget Reserve (CBR)  or SBR. He believed the                                                                    
language was  in the budget  for the SBR, but  the mechanism                                                                    
would only kick in after the $84/bbl amount.                                                                                    
Co-Chair  Stedman  asked Mr.  Painter  to  get back  to  the                                                                    
committee   with  information   regarding   the  oil   price                                                                    
threshold that  included evaporation of  the forward-funding                                                                    
and the SBR.                                                                                                                    
Mr. Painter agreed to address the topic.                                                                                        
Co-Chair Stedman  explained that  there were  several issues                                                                    
with  increases  in the  FY  23  budget  that would  not  be                                                                    
recurring.  He asked  for Mr.  Painter  to get  back to  the                                                                    
committee with what  FY 24 recurring costs  would look like.                                                                    
He asked  Mr. Painter  to consider the  governor's submitted                                                                    
budget and wanted to look at  the base rate of change for FY                                                                    
24 in percentages.                                                                                                              
Mr. Painter agreed to provide the information.                                                                                  
Mr.  Painter referenced  slide 8,  "Major Increases  in FY23                                                                    
Governor's Budget from FY22":                                                                                                   
     ? $45.0 million for Medicaid                                                                                               
     ? $33.6  million UGF  increases to  offset DGF  lost in                                                                    
     CBR sweep                                                                                                                  
     ?  $25.5  million  UGF   for  union  contracts,  health                                                                    
     insurance, and other contractual items                                                                                     
     ?  $17.4 million  combined increases  in Department  of                                                                    
     Public  Safety  (adding  troopers, VPSOs,  and  support                                                                    
     ?  $12.9 million  combined increases  in Department  of                                                                    
     Corrections (booking  and MH  unit at  Hiland Mountain,                                                                    
     adding non-CO support positions)                                                                                           
     ?  $5.7 million  for  DEC to  take  primacy of  federal                                                                    
     permitting programs                                                                                                        
     ?  $4.0 million  for  Department of  Law for  statehood                                                                    
     ? $3.8 million for fire suppression preparedness                                                                           
Mr.  Painter  explained that  the  next  few slides  covered                                                                    
major  increases  in  the current  budget  compared  to  the                                                                    
previous  fiscal  year.  The governor's  budget  called  for                                                                    
several  major  increases (listed  on  the  slide), and  the                                                                    
following  few slides  would show  increases  in the  Senate                                                                    
budget that were  not in the governor's  original budget. He                                                                    
reviewed the increases on the slide.                                                                                            
3:06:30 PM                                                                                                                    
Mr.  Painter  highlighted  slide  9,  "Many  FY23  Increases                                                                    
Reverse Past Budget Reductions":                                                                                                
     ? Several increments in the Governor's FY23 budget                                                                         
   request reverse reductions or vetoes made since FY23:                                                                        
            $45.0  million Medicaid increase    Medicaid was                                                                    
          reduced by $35.0 million in FY22.                                                                                     
            $4.0 million University  of Alaska increase   UA                                                                    
        was reduced by $54.3 million from FY20-22.                                                                              
            $2.0  million for Legislative per  diem   vetoed                                                                    
          by Governor in FY22.                                                                                                  
             $0.7  million     GF/MH  items  vetoed  by  the                                                                    
          Governor in FY22.                                                                                                     
     ? Several other items reverse reductions made from                                                                         
     FY15-FY19 under previous governors:                                                                                        
            $4.9 million for DEC  404 Primacy   this was cut                                                                    
          in FY15.                                                                                                              
             $3.8   million  for  wildfire   prevention  and                                                                    
          academy  this was cut in FY16.                                                                                        
              $2.4  million   for   Village  Public   Safety                                                                    
          Officers this was cut in FY16.                                                                                        
            $1.2 million for  Judiciary for increased hours                                                                     
          this was cut in FY16.                                                                                                 
Mr.  Painter  noted  that  many  of  the  increases  on  the                                                                    
previous slide  were reversing  past budget  reductions from                                                                    
the previous  seven or eight  years. He commented  that many                                                                    
of  the items  were bringing  the  state back  to levels  of                                                                    
service provided before revenue decline starting in FY 15.                                                                      
Co-Chair Bishop  commented that the  $4 million  increase to                                                                    
the  University of  Alaska was  in light  of a  $101 million                                                                    
reduction since FY 16 to date.                                                                                                  
Senator  Olson  went back  to  slide  8 and  referenced  the                                                                    
Department  of  Environmental Conservation  primacy  federal                                                                    
permitting. He thought the funds had been cut.                                                                                  
Mr. Painter answered affirmatively.  He shared that the item                                                                    
was not  in the  Senate version  of the  budget, but  was an                                                                    
increase requested by the governor.                                                                                             
Mr.  Painter  showed  slide 10,  "Major  Increases  in  SFIN                                                                    
     Operations from Governor Proposal                                                                                          
     ? $60.0 million K-12 Outside BSA Formula                                                                                   
     ? $59.4 million for AMHS (Governor eliminated UGF)                                                                         
     ? $27.0 million for fuel trigger to offset high oil                                                                        
     ? $16.1 million DOH to Increase Personal Care                                                                              
     Attendant Wages                                                                                                            
     ? $14.1 million for University of Alaska                                                                                   
     ? $5.0 million for ASMI                                                                                                    
     ? $4.3 million for Food Bank pilot program                                                                                 
     ? $4.3 million for 50% increase to K-12 residential                                                                        
Mr.  Painter  explained  that  both  the  House  and  Senate                                                                    
versions of the  budget had an amount of UGF  for the Alaska                                                                    
Marine Highway  System (AMHS) that  was equal to  the amount                                                                    
of funding  the previous  year. It was  not an  increase but                                                                    
showed  as  one  if  compared  to  the  governor's  proposed                                                                    
budget. He  discussed the  fuel trigger  to offset  high oil                                                                    
prices for agencies and particularly  the AMHS. He mentioned                                                                    
that  the increase  to residential  schools did  not include                                                                    
Mt. Edgecumbe High School.                                                                                                      
3:11:39 PM                                                                                                                    
Co-Chair Stedman  referenced the AMHS and  thought the funds                                                                    
were put in  if the ferries ran the schedule  and there were                                                                    
high oil  prices. He did  not think  there would be  crew to                                                                    
run the  AMHS schedule.  He mentioned backfill  language for                                                                    
federal funds and  expected a lot of the funds  would not be                                                                    
Senator Olson asked if Co-Chair  Stedman was referencing the                                                                    
$60 million going to the AMHS listed on the slide.                                                                              
Co-Chair  Stedman  answered  affirmatively.  He  noted  that                                                                    
there  would be  $200  million in  federal  funds coming  to                                                                    
AMHS. He  unsure of the  timing of  when the funds  would be                                                                    
available. He thought  there would be a  more refined number                                                                    
during the following year's budget process.                                                                                     
Mr.  Painter spoke  to slide  11, "Major  Increases in  SFIN                                                                    
Statewide Items from Governor Proposal":                                                                                        
     ? $89.3 million for PERS/TRS pension fund (amount that                                                                     
     would have gone to healthcare fund but for ARM Board                                                                       
     decision to leave it unfunded)                                                                                             
     ? $1.2 billion for K-12 forward funding (more of a                                                                         
     savings item than an expenditure)                                                                                          
     ? $199.0 million to PF  corpus in FY22 to satisfy audit                                                                    
     finding relating to FY17-18 royalties                                                                                      
     ? $220.8  million in FY22  to pay past  unfunded School                                                                    
     Bond Debt Reimbursement from FY17-21                                                                                       
     ? $84.0  million in  FY22 to  repay past  unfunded REAA                                                                    
     deposits from FY17-21                                                                                                      
     ?  $60.0 million  in FY22  to  pay oil  tax credits  at                                                                    
     statutory amount                                                                                                           
     ? $38.9  million in FY22 to  bring Community Assistance                                                                    
     distributions to $30 million in FY22 and FY23                                                                              
3:15:04 PM                                                                                                                    
Mr. Painter  addressed slide 12, "What's  the True Operating                                                                    
Budget Growth Rate?"                                                                                                            
     ?  Several changes  from FY22-23  give the  FY23 agency                                                                    
    operations budget a lower starting point than FY22.                                                                         
     ?   The  Governor's   FY23   budget  increases   agency                                                                    
     operations  by  $95.6  million  (2.5%)  over  the  FY23                                                                    
     ?  However,   the  Governor's  budget   uses  temporary                                                                    
     federal funds  in place  of UGF  for the  Alaska Marine                                                                    
     Highway  System.  Keeping  UGF funding  level  (as  the                                                                    
     House and  SFIN budgets  do) would  result in  a $155.0                                                                    
     million (4.0%) over the baseline.                                                                                          
     ? SFIN  Operating Budget is $319.7  million (8.3%) over                                                                    
     the baseline.  The House is $266.9  million (6.9%) over                                                                    
     the   baseline,  although   $10.3  million   of  salary                                                                    
     adjustments  were submitted  after the  House's process                                                                    
     was complete.                                                                                                              
Mr. Painter  noted that  the fiscal  summary had  shown that                                                                    
agency operations  were up  by 6.7  percent, which  could be                                                                    
understating the true  level of budget growth  due to built-                                                                    
in  decreases  before  the  budget  work  was  started.  The                                                                    
decreases were listed in a small  table on the right side of                                                                    
the  slide. He  mentioned changes  in retirement  funds, the                                                                    
decrease in  student count, the  removal of  one-time items,                                                                    
and  contractual  changes.   The  baseline  before  starting                                                                    
budget  work was  $55.5 million  below  the previous  year's                                                                    
level with no  change in service levels.  He summarized that                                                                    
doing a comparison using the  baseline rather than to FY 22,                                                                    
it would provide a clearer picture of growth.                                                                                   
Mr. Painter  explained that  the House  budget had  a growth                                                                    
rate of  6.9 percent  above the  baseline, while  the Senate                                                                    
Finance  Committee budget  had  an 8.3  percent growth  rate                                                                    
above  the  baseline. He  noted  that  there had  been  some                                                                    
governor's  amendments that  may have  increased the  budget                                                                    
and  exaggerated   the  difference   between  the   two.  He                                                                    
commented that the proposed budget  was a significant growth                                                                    
rate  after  years of  flat  or  declining budget,  but  the                                                                    
Senate Finance  budget was  a bit  over $300  million beyond                                                                    
the baseline.                                                                                                                   
3:18:01 PM                                                                                                                    
Co-Chair  Stedman discussed  the  timing  process after  the                                                                    
governor's  budget was  submitted on  December 15  and noted                                                                    
that  there  were quite  a  few  amendments and  adjustments                                                                    
after  the House  had done  its work,  and the  budget cycle                                                                    
stayed open until  the very last requested  changes from the                                                                    
governor. He  noted that  the Senate did  not have  the same                                                                    
time  frame as  the  House and  dealt with  the  end of  the                                                                    
budgetary cycle.                                                                                                                
Mr.  Painter  showed  slide 13,  "Full-Time  Position  Count                                                                    
Comparison," which showed  a table of the  position count in                                                                    
different  versions  of  the   budget.  He  noted  that  the                                                                    
governor's  budget had  proposed to  increase the  statewide                                                                    
position  count by  260 from  the previous  year, while  the                                                                    
Senate Finance budget was 43  positions below the governor's                                                                    
request.  There  was still  a  substantial  increase of  217                                                                    
positions higher than FY 22.                                                                                                    
Senator Hoffman asked about Conference Committee.                                                                               
Co-Chair  Stedman explained  that the  following major  step                                                                    
after  floor action  on the  bill would  be working  out the                                                                    
budget with the other body.                                                                                                     
Co-Chair Bishop  MOVED to  report SCS  CSHB 281(FIN)  out of                                                                    
Committee  with individual  recommendations. There  being NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
SCS CSHB  281(FIN) was  REPORTED out  of committee  with two                                                                    
"do   pass"   recommendations    and   with   four   "amend"                                                                    
Co-Chair  Bishop MOVED  that  the  Senate Finance  Committee                                                                    
direct the Divisions of  Legislative Finance and Legislative                                                                    
Legal make technical  and conforming changes to  the bill as                                                                    
necessary. There being NO OBJECTION, it was so ordered.                                                                         
CS FOR HOUSE BILL NO. 282(FIN)                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive mental health  program; and providing for                                                                    
     an effective date."                                                                                                        
3:21:22 PM                                                                                                                    
Co-Chair Bishop  moved to  report MOVED  to report  SCS CSHB
282(FIN) out  of Committee with  individual recommendations.                                                                    
There being NO OBJECTION, it was so ordered.                                                                                    
SCS CSHB 282(FIN)  was REPORTED out of  committee with three                                                                    
"do    pass"   recommendations    and    with   three    "no                                                                    
recommendation" recommendations.                                                                                                
Co-Chair  Bishop moved  that  the  Senate Finance  Committee                                                                    
direct the Divisions of  Legislative Finance and Legislative                                                                    
Legal make technical  and conforming changes to  the bill as                                                                    
necessary. There being NO OBJECTION, it was so ordered.                                                                         
Co-Chair Stedman discussed the schedule.                                                                                        
3:22:44 PM                                                                                                                    
The meeting was adjourned at 3:22 p.m.                                                                                          

Document Name Date/Time Subjects
SB 164 work draft version O.pdf SFIN 5/3/2022 1:00:00 PM
SB 164
HB 281 work draft version K.pdf SFIN 5/3/2022 1:00:00 PM
HB 281
HB 281 work draft version Y.pdf SFIN 5/3/2022 1:00:00 PM
HB 281
HB 281 LFD Presentation- SFIN Budget 5-2-22.pdf SFIN 5/3/2022 1:00:00 PM
HB 281
HB 281 School Bond Debt Reimbursement to Communities.pdf SFIN 5/3/2022 1:00:00 PM
HB 281
HB 281 Version Y Agency Summary Packet.pdf SFIN 5/3/2022 1:00:00 PM
HB 281
HB 281 Version K Agency Summary Packet.pdf SFIN 5/3/2022 1:00:00 PM
HB 281
SB 164 version O Agency Summary Packet.pdf SFIN 5/3/2022 1:00:00 PM
SB 164
SB 164 Testimony Lutchansky Anchorage Midtown Park Chalet.pdf SFIN 5/3/2022 1:00:00 PM
SB 164
SB 164 Testimony Hinderman Midtown Park Chalet.pdf SFIN 5/3/2022 1:00:00 PM
SB 164
SB 39 Support Dundore.pdf SFIN 5/3/2022 1:00:00 PM
SB 39