Legislature(2023 - 2024)SENATE FINANCE 532

01/26/2023 09:00 AM Senate FINANCE

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Audio Topic
09:00:41 AM Start
09:01:08 AM SB41
09:36:26 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Teleconferenced --
- Office of Management & Budget
                 SENATE FINANCE COMMITTEE                                                                                       
                     January 26, 2023                                                                                           
                         9:00 a.m.                                                                                              
9:00:41 AM                                                                                                                    
CALL TO ORDER                                                                                                                 
Co-Chair Hoffman called the Senate Finance Committee                                                                            
meeting to order at 9:00 a.m.                                                                                                   
MEMBERS PRESENT                                                                                                               
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Donny Olson, Co-Chair                                                                                                   
Senator Click Bishop                                                                                                            
Senator Jesse Kiehl                                                                                                             
Senator Kelly Merrick                                                                                                           
Senator David Wilson                                                                                                            
MEMBERS ABSENT                                                                                                                
Senator Bert Stedman, Co-Chair                                                                                                  
ALSO PRESENT                                                                                                                  
Neil Steininger, Director, Office of Management and Budget,                                                                     
Office of the Governor; Senator Cathy Giessel.                                                                                  
PRESENT VIA TELECONFERENCE                                                                                                    
Theresa Cross, Administrative Service Director, Department                                                                      
of Natural Resources, Office of Management and Budget,                                                                          
Office of the Governor.                                                                                                         
SB 41     APPROP: CAPITAL/SUPPLEMENTAL                                                                                          
          SB 41 was HEARD and HELD in committee for further                                                                     
SENATE BILL NO. 41                                                                                                            
     "An Act making appropriations, including capital                                                                           
     appropriations   and   other   appropriations;   making                                                                    
     supplemental appropriations; making appropriations to                                                                      
     capitalize funds; and providing for an effective                                                                           
9:01:08 AM                                                                                                                    
Co-Chair  Hoffman explained  that the  committee would  do a                                                                    
high-level  overview of  SB 41  and would  get into  further                                                                    
detail at a later stage.                                                                                                        
9:01:43 AM                                                                                                                    
NEIL STEININGER, DIRECTOR, OFFICE  OF MANAGEMENT AND BUDGET,                                                                    
OFFICE OF  THE GOVERNOR,  addressed a  presentation entitled                                                                    
"Capital Budget  SB 41 and  SB42, Senate  Finance Committee,                                                                    
January 26, 2023"  (copy on file). He  thanked the committee                                                                    
and noted  that there  were capital  projects in  the mental                                                                    
health budget as well (SB 42).                                                                                                  
Mr. Steininger  looked at slide  2, "FY 2024  Capital Budget                                                                    
     • Funds match for core federal programs                                                                                    
       Includes federal infrastructure bill match                                                                               
     • Note: House districts listed in bill have not been                                                                       
     updated for redistricting                                                                                                  
Mr. Steininger addressed the table  on slide 2, which showed                                                                    
the breakdown  in capital appropriations  between SB  41 and                                                                    
SB 42. There  was about $10 million  in Unrestricted General                                                                    
Funds (UGF) in  the mental health budget  and $266.3 million                                                                    
in the  traditional capital budget  (SB 41), for a  total of                                                                    
$276 million.  Between the roughly  $1.7 billion  in federal                                                                    
funds and $100 million in  other funds, there was about $2.1                                                                    
billion  in overall  proposed capital  spending between  the                                                                    
two  bills.  He  noted  that  the  capital  budget  included                                                                    
matching funds  for core federal  programs as well  as match                                                                    
for  some new  programs from  the Infrastructure  Investment                                                                    
and  Jobs  Act  (IIJA). He  included  traditional  recurring                                                                    
capital  projects and  a handful  of discretionary  priority                                                                    
projects for investment in the state.                                                                                           
Mr. Steininger noted that the  House districts listed on the                                                                    
Office  of   Management  and   Budget  (OMB)   report  still                                                                    
reflected  the information  before re-districting  had taken                                                                    
place. The  office had  not received  an official  file from                                                                    
the Division of Elections to update its system.                                                                                 
9:03:36 AM                                                                                                                    
Mr. Steininger spoke  to slide 3, "Capital  Budget Five Year                                                                    
History,"  which showed  a bar  graph depicting  a five-year                                                                    
history of  the capital  budget. He pointed  out constrained                                                                    
budgets in  FY 20 and  FY 21,  with fairly small  amounts of                                                                    
UGF in only  the amount necessary to  match incoming federal                                                                    
funds. He  noted that  in FY  22 and FY  23 the  federal and                                                                    
Unrestricted General  Fund bars  were growing.  He explained                                                                    
that  the  state  had  received a  fairly  large  influx  of                                                                    
federal   funds   in   the  capital   budget   through   the                                                                    
infrastructure bill  as well as  some of the  other Covid-19                                                                    
relief  bills, which  had required  additional match.  There                                                                    
were also  much higher-than-projected  revenues in FY  23 as                                                                    
well as at  the close-out of FY 22, which  resulted in a lot                                                                    
more capital spending in those two years.                                                                                       
Mr. Steininger continued that in  the FY 24 budget there was                                                                    
a return  back down  to a  more constrained  capital budget,                                                                    
however it  was a bit  larger than FY  21 and FY  20 capital                                                                    
budgets. He relayed he would  go into more detail on another                                                                    
slide  as to  why  there  was a  larger  amount of  required                                                                    
General Funds (GF) in order to match federal programs.                                                                          
Mr. Steininger  referenced slide  4, "UGF Capital    Minimum                                                                    
     Baseline/Minimum match projects include:                                                                                   
     • Community Block Grants                                                                                                   
     • Alaska Energy Authority  Energy Projects                                                                                 
     • Village Safe Water and Wastewater                                                                                        
     • AHFC Housing Programs                                                                                                    
     • Surface Transportation and Aviation State Match                                                                          
     Leverages $1.5 billion of Federal Revenue                                                                                  
Mr. Steininger  explained that the  slide and bar  graph was                                                                    
intended to illustrate the concept  of the minimum amount of                                                                    
GF  that was  necessary for  the states   capital budget  to                                                                    
match to core  federal programs. He listed  the core federal                                                                    
programs listed on the slide. The  blue bars for years FY 20                                                                    
through   FY   24  on   the   graph   represented  the   UGF                                                                    
appropriations  required  to  match   the  $1.5  billion  in                                                                    
federal   revenue.   The   yellow  bars   represented   more                                                                    
discretionary capital  spending, some of which  did match to                                                                    
federal dollars but  not to the core  recurring projects. He                                                                    
pointed out that the blue bar  had grown over time, with two                                                                    
factors that  impacted the increased  need for GF  match for                                                                    
federal  programs. He  mentioned  that under  the IIJA,  the                                                                    
federal   appropriations    to   programs    had   increased                                                                    
significantly,   which   required    more   GF   to   match.                                                                    
Additionally, in FY  21 the state had been  cleaning up some                                                                    
older capital projects and were  able to do reappropriations                                                                    
to   satisfy   match   requirements   rather   than   a   GF                                                                    
9:06:58 AM                                                                                                                    
Co-Chair   Hoffman   had   heard  from   the   congressional                                                                    
delegation  that  in the  immediate  and  near future  there                                                                    
would  be  much more  construction  in  areas of  water  and                                                                    
sewer, in  an amount close to  $1 billion. He asked  if some                                                                    
of the increase was reflected in the FY 24 matching funds.                                                                      
Mr. Steininger  answered "yes" and  noted that the  blue bar                                                                    
with  the  $167 million  including  matching  funds for  the                                                                    
sewer programs for Village Safe Water.                                                                                          
Mr. Steininger  turned to slide 5,  "Capital UGF Unobligated                                                                    
Appropriations,"  which  showed  a  bar  graph  illustrating                                                                    
current   outstanding  unobligated   GF  appropriations   to                                                                    
capital projects,  including how much remained  unspent from                                                                    
capital projects  appropriated by  the legislature  in prior                                                                    
years.  The  data  for  the  slide  came  from  the  Capital                                                                    
Appropriations  Status  Report,  which  OMB  produced  every                                                                    
year.  The  report  showed  every  ongoing  current  capital                                                                    
project,  how much  money had  been spent  to date,  and how                                                                    
much  money was  unspent.  He observed  there  was a  fairly                                                                    
large  amount  of  money  unspent  from  FY  23  and  FY  22                                                                    
projects. The primary reason for  the unspent funds was that                                                                    
the  appropriations had  just been  made  effective July  1,                                                                    
2022.  Additionally,  supplemental appropriations  from  the                                                                    
previous year had only been on the books for a few months.                                                                      
Mr.  Steininger continued  to address  slide 5.  He observed                                                                    
that there  were outstanding appropriations  from FY  21, FY                                                                    
22,  and FY  19, which  departments were  still working  on.                                                                    
There were  some appropriations  older than five  years that                                                                    
had some  unobligated funds, with  reasons that varied  on a                                                                    
case  by  case  basis.  He mentioned  obstacles  during  the                                                                    
construction or  planning phase of a  project which resulted                                                                    
in delays  in the expenditures.  Some of the  projects might                                                                    
have been identified in the  aforementioned status report as                                                                    
having  been completed,  and any  remaining  funds would  be                                                                    
available to lapse  into the General Fund or  reused to fund                                                                    
a new project or matching fund need.                                                                                            
9:09:50 AM                                                                                                                    
Mr.   Steininger  considered   slide   6,  "FY2024   Capital                                                                    
     Commerce, Community, and Economic Development                                                                              
      Alaska Gasline Development Corporation - Hydrogen                                                                      
        Hub: $10,000.0 Federal (pg. 14)                                                                                         
      Alaska Energy Authority - Statewide Grid Resilience                                                                    
        and Reliability - IIJA Formula: $12,110.5 Federal /                                                                     
      $1,816.6 GF Match (pg. 23)                                                                                             
      Public    Engagement   and    Customer   Relationship                                                                  
        Management System: $2,500.0 Other - Bus. Lic. & Corp                                                                    
        Filing Fees/Taxes (pg. 25)                                                                                              
      Three-Phase Power Extensions and Upgrades to Delta                                                                     
       Farm Region and Co-Op: $3,000.0 UGF (pg. 27)                                                                             
      Statewide    Marketing   and   Economic   Development                                                                  
        Initiative: $5,000.0 GFPR (pg. 28)                                                                                      
      Point Mackenzie Correctional Farm Produce Processing                                                                   
        Plant: $3,080.0 UGF (pg. 29)                                                                                            
Mr.  Steininger noted  that  the list  of  projects was  not                                                                    
comprehensive. He referenced a  project review list document                                                                    
(copy on  file) that  was provided  to members  and detailed                                                                    
all projects.  The slide listed non-recurring  projects, new                                                                    
projects,  or  projects   with  changes  the  administration                                                                    
wanted to  highlight. He discussed the  hydrogen hub project                                                                    
by  the Alaska  Gasline Development  Corporation (AGDC).  He                                                                    
highlighted that  AGDC was in  a competitive process  to try                                                                    
and  make Alaska  one of  six to  ten hydrogen  hubs in  the                                                                    
country. The  federal receipts would allow  AGDC to continue                                                                    
in the competitive application process.                                                                                         
Mr.  Steininger continued  and  discussed an  infrastructure                                                                    
formula program from the  federal infrastructure bill called                                                                    
the  Statewide  Grid  Resiliency  and  Reliability  Program,                                                                    
which  brought in  about $12  million in  federal funds  and                                                                    
required just under  $2 million in matching  funds. He noted                                                                    
that  the   project  from  the  Division   of  Corporations,                                                                    
Business, and Professional Licensing  would use the receipts                                                                    
from  business license  fees and  corporate license  fees to                                                                    
cover  the  cost.  The   modernization  project  would  help                                                                    
streamline  operations in  the  division.  He discussed  the                                                                    
power upgrades in  the Delta farm region,  which should help                                                                    
bolster some  of the food security  initiatives the governor                                                                    
had been  working on and  help provide for  more sustainable                                                                    
farming in the region.                                                                                                          
Mr.  Steininger discussed  the proposed  statewide marketing                                                                    
initiative, which  was to  market Alaska-produced  goods and                                                                    
services, as  well as to  try and attract businesses  to the                                                                    
state. He discussed the item  listed under the Department of                                                                    
Corrections   (DOC),  which   would   establish  a   produce                                                                    
processing plant  at the  Point Mackenzie  Correctional Farm                                                                    
to provide for the  ability to distribute produce throughout                                                                    
the correctional system.                                                                                                        
9:13:33 AM                                                                                                                    
Senator   Kiehl  thought   the  state   had  a   history  of                                                                    
correctional system  purchases that had degraded  over time.                                                                    
He  asked  if  there  was  a  corresponding  effort  in  the                                                                    
operating  budget to  ensure that  there was  not a  similar                                                                    
problem with the proposed project.                                                                                              
Mr.  Steininger relayed  that  the  administration had  been                                                                    
working with DOC on its  overall strategy of maintenance. He                                                                    
recounted  that   the  previous  year  the   department  had                                                                    
received  several large  appropriations for  maintenance for                                                                    
DOC facilities.  He mentioned  tools to  address maintenance                                                                    
and explained that the administration  had been working with                                                                    
the department  to ensure its  operating budget  was capable                                                                    
of  funding  routine  maintenance.  He  explained  that  DOC                                                                    
ranked high on  the list for the  deferred maintenance funds                                                                    
that  went  through the  office  of  the governor  and  were                                                                    
awarded based on a priority.  He summarized that while there                                                                    
was  not a  specific plan  directly related  to the  capital                                                                    
budget, there  was a broader  strategy to ensure  that there                                                                    
was adequate maintenance funding.                                                                                               
Senator Kiehl  sensed that if  GF and  annual appropriations                                                                    
were  only considered,  the state  would  only maintain  the                                                                    
security  parts  of  the Department  of  Transportation  and                                                                    
Public Facilities (DOT), which  was essential. He reiterated                                                                    
that there had  been past problems with  items degrading. He                                                                    
thought  there could  be  an opportunity  to  work with  the                                                                    
operating  budget chairman  to find  a way  to separate  the                                                                    
project in order to generate  revenue separate from security                                                                    
components in DOC.                                                                                                              
9:16:05 AM                                                                                                                    
Mr.   Steininger   displayed   slide  7,   "FY2024   Capital                                                                    
     Environmental Conservation                                                                                                 
      Ambient Air Monitoring Shelters: $100.0 UGF (pg. 53)                                                                   
     Fish and Game                                                                                                              
      Arctic Fisheries: $2,000.0 Federal / $1,000.0 UGF                                                                      
        (pg. 66)                                                                                                                
     Office of the Governor                                                                                                     
      Legal, Expertise, and Consultation Services to                                                                         
        Support Statehood Defense: $10,000.0 UGF (pg. 68)                                                                       
     Labor and Workforce Development                                                                                            
      Business Enterprise Program: Facility Development                                                                      
        and Equipment Replacement: $1,339.8 UGF (pg. 78)                                                                        
      Business Enterprise Program: Child Care Facility:                                                                      
        $620.4 UGF (pg. 79)                                                                                                     
Mr.  Steininger expanded  that  the  ambient air  monitoring                                                                    
shelters  item  was  associated  with  an  operating  budget                                                                    
increment  with a  plan to  establish  better monitoring  to                                                                    
determine which air pollutants were  coming from outside the                                                                    
state. He  discussed funding  for Arctic  fisheries research                                                                    
to  examine   the  possibility   of  potential   new  viable                                                                    
fisheries associated with  regions of waterways experiencing                                                                    
changes in  ice melt.  The funds  for the  statehood defense                                                                    
were previously  appropriated to the Department  of Law, but                                                                    
other aspects  of statehood defense (such  as research) were                                                                    
proposed to  be managed  in the office  of the  governor. He                                                                    
discussed  the items  for the  Business Enterprise  Program,                                                                    
which was  usually funded with  payments from  recipients of                                                                    
the  program.   The  payments  had   been  swept   into  the                                                                    
Constitutional  Budget  Reserve   (CBR),  and  the  proposed                                                                    
appropriation would make the program whole.                                                                                     
Co-Chair  Hoffman asked  if there  was  someone online  that                                                                    
could address the need for childcare facilities.                                                                                
Mr. Steininger  thought there  was someone  to speak  to the                                                                    
Business Enterprise  Program. He  thought there might  be an                                                                    
individual from  the Department of  Health that  could speak                                                                    
to childcare  needs but was  not sure that a  direct subject                                                                    
matter expert available.                                                                                                        
Co-Chair  Hoffman pondered  that the  committee could  get a                                                                    
report  pertaining   to  the   other  needs   for  childcare                                                                    
facilities throughout the state.                                                                                                
9:19:57 AM                                                                                                                    
Co-Chair Olson  considered the  Statehood Defense  Fund, and                                                                    
asked  if there  would be  new positions  hired or  if there                                                                    
were existing personnel.                                                                                                        
Mr. Steininger  relayed that in  the past the  Department of                                                                    
Law  had attorneys  in its  civil division  that charged  to                                                                    
different  agencies depending  upon  the  type of  statehood                                                                    
defense  case. Most  of the  cases did  not have  a specific                                                                    
agency to  charge to, and  the proposed  appropriation would                                                                    
provide for a  pot of money to charge time  to. In addition,                                                                    
the state  was utilizing  outside counsel and  other outside                                                                    
expertise when there  was not an attorney on  staff that had                                                                    
the expertise needed.                                                                                                           
Co-Chair Olson commented that he  had been the chair for the                                                                    
budget subcommittee  and had been  less than  impressed with                                                                    
some  of the  litigation that  the state  had been  involved                                                                    
with.  He thought  the state  had  a history  of failing  to                                                                    
prevail in cases  where there were hundreds  of thousands of                                                                    
dollars being lost.                                                                                                             
Senator  Kiehl  spoke to  items  on  the slide  relating  to                                                                    
research,  including the  legal fund  and the  increment for                                                                    
Arctic fisheries. He asked if  the state was maintaining its                                                                    
research  capacity through  the governors   proposed budget.                                                                    
He  wondered if  the state  would  have the  same number  of                                                                    
biologists,  fish  and  game  vessels,  airplanes,  and  the                                                                    
things needed to do research consistently.                                                                                      
Mr.  Steininger  answered  "yes."  He  reiterated  that  the                                                                    
slides showed  only highlights,  and here  were a  number of                                                                    
annually  recurring  Department  of  Fish  and  Game  (ADFG)                                                                    
projects  related   to  research  as  well   as  significant                                                                    
investments in  ADFGs  operating  budget. He  continued that                                                                    
there was no  plan within the budget that  reduce the number                                                                    
of biologists or reduce the amount of research being done.                                                                      
Senator Kiehl  thought the funding for  major maintenance of                                                                    
aircraft  and vessels  had not  changed much  and understood                                                                    
some of  the things the department  had were on the  edge of                                                                    
needing maintenance.                                                                                                            
9:22:58 AM                                                                                                                    
Mr.   Steininger  highlighted   slide  8,   "FY2024  Capital                                                                    
     Military and Veterans' Affairs                                                                                             
      Construction of a Certified Veterans Cemetery in                                                                       
        Fairbanks area: $6,000.0 Federal / $1,100.0 UGF (pg.                                                                    
     Natural Resources                                                                                                          
      Unlocking Alaska Parks: Construction of New Public                                                                     
        Use Cabins: $2,400.0 UGF (pg. 109)                                                                                      
      Sanitation Upgrades to Parks: $2,000.0 UGF (pg. 113)                                                                   
      Bison Range Restoration: $2,000.0 UGF (pg. 116)                                                                        
Mr. Steininger  detailed that there  was an  area identified                                                                    
for  construction of  the veterans   cemetery in  Fairbanks,                                                                    
and  matching funds  were needed  to access  federal dollars                                                                    
and  complete  the project.  He  discussed  items under  the                                                                    
Department of  Natural Resources (DNR), which  would include                                                                    
upgrades  to restrooms  and cabins.  He  explained that  the                                                                    
bison range restoration  was a partnership with  ADFG to try                                                                    
and establish  a region  to provide for  a bison  range that                                                                    
could be used for a food and stock source.                                                                                      
Senator  Merrick  asked  about  the  veteran's  cemetery  in                                                                    
Fairbanks,  and whether  funds for  ongoing maintenance  and                                                                    
operations  would  be the  responsibility  of  the state  or                                                                    
federal government.                                                                                                             
Mr. Steininger affirmed that there  would be operating costs                                                                    
associated with  the cemetery once  it was  operational, and                                                                    
the costs  should be  shared between  the state  and federal                                                                    
Senator Bishop believed that restoration  for the bison herd                                                                    
would also  be administered  by the SalchaDelta   Water Soil                                                                    
and Conservation District and the Community of Delta.                                                                           
Mr.  Steininger  believed there  was  someone  from the  DNR                                                                    
Division of  Agriculture that could  speak to  the execution                                                                    
of the funds in more detail.                                                                                                    
9:25:51 AM                                                                                                                    
THERESA CROSS,  ADMINISTRATIVE SERVICE  DIRECTOR, DEPARTMENT                                                                    
OF  NATURAL  RESOURCES,  OFFICE OF  MANAGEMENT  AND  BUDGET,                                                                    
OFFICE OF  THE GOVERNOR  (via teleconference),  directed the                                                                    
question to an agronomist.                                                                                                      
Senator Bishop  wanted to  add that  the funding  would pass                                                                    
through  to  the SalchaDelta   Water Soil  and  Conservation                                                                    
Mr.   Steininger  looked   at  slide   9,  "FY2024   Capital                                                                    
     Public Safety                                                                                                              
      Training Academy Maintenance and Updates: $750.0 UGF                                                                   
        (pg. 122)                                                                                                               
      Classroom and Offices in the Department of Public                                                                      
        Safety Bethel Hangar: $750.0 UGF (pg. 124)                                                                              
      Investigative and Forensic Electronic Equipment                                                                        
        Refresh: $678.8 UGF (pg. 125)                                                                                           
      Fairbanks Post Remodel and Expansion: $5,650.0 UGF                                                                     
        (pg. 127)                                                                                                               
      Criminal    Justice   Information    Systems   (CJIS)                                                                  
        Modernization: $4,383.2 UGF (pg. 129)                                                                                   
      AHFC Rural Professional Housing: $3,250.0 UGF /                                                                        
        $500.0 SDPR / $1,750.0 AHFC Dividend (pg. 150)                                                                          
Mr.  Steininger   spoke  to   the  Alaska   Housing  Finance                                                                    
Corporation  (AHFC) Rural  Professional Housing  Program and                                                                    
noted that the  proposed funding was to expand  the scope of                                                                    
the program  to include  all rural public  professionals and                                                                    
not just those in public safety, health, or teaching.                                                                           
Co-Chair Hoffman  asked if the  AHFC expansion would  go out                                                                    
to  bid and  if agencies  would not  be responsible  for the                                                                    
housing with management by private industry.                                                                                    
Mr. Steininger knew that AHFC  could provide more detail. He                                                                    
relayed  that the  program applications  had been  generally                                                                    
from communities to  build housing. He thought  there was an                                                                    
option that  a department  could potentially apply  to build                                                                    
housing  themselves  or  by some  other  entity  within  the                                                                    
community,  after which  the department  could focus  on its                                                                    
own mission.                                                                                                                    
Co-Chair Hoffman  recalled that  about ten  years previously                                                                    
there  was a  project  to construct  a  facility for  Alaska                                                                    
State Troopers in  Bethel. The project went out  to bid, and                                                                    
the awardee was responsible  for maintenance of the facility                                                                    
and the  Department of  Public Safety  was not  involved. He                                                                    
relayed he  would address  the matter with  AHFC at  a later                                                                    
9:29:47 AM                                                                                                                    
Mr.   Steininger  addressed   slide   10,  "FY2024   Capital                                                                    
     Transportation and Public Facilities                                                                                       
      Alaska Land Mobile Radio (ALMR) In Vehicle Radio                                                                       
        Replacements: $1,700.0 UGF (pg. 202)                                                                                    
      Dalton Highway Delineators Improvements: $2,143.4                                                                      
        UGF (pg. 203)                                                                                                           
     University of Alaska                                                                                                       
      UAA Health Workforce Diversity Expansion Project                                                                       
        Phase 2 (WWAMI): $2,000.0 UGF (pg. 207)                                                                                 
      UA Drones: $10,000.0 UGF (pg. 212)                                                                                     
      Justice    Technology    Upgrades    and    Courtroom                                                                  
        Modernization: $2,378.3 UGF (pg. 214)                                                                                   
      Court Security Projects: $3,125.0 UGF (pg. 216)                                                                        
Mr. Steininger  explained that the vehicle  replacements for                                                                    
DOT were due  to the Alaska Land Mobile  Radio System (ALMR)                                                                    
transitioning  to  a  new   transmission  system.  The  $1.7                                                                    
million signified about a third  of the replacement cost. He                                                                    
continued  that the  delineator improvements  required state                                                                    
funds  for colored  reflectors which  were not  eligible for                                                                    
federal reimbursement.  He addressed the  proposed expansion                                                                    
of  the  Washington,  Wyoming, Alaska,  Montana,  and  Idaho                                                                    
(WWAMI) Program,  which would provide  for an  additional 10                                                                    
spaces  in  the  program.  He explained  that  the  proposed                                                                    
funding for the UA drone  program would continue the program                                                                    
in  its  research on  commercial  and  other application  of                                                                    
drones in the state.                                                                                                            
Senator Merrick  asked Mr. Steininger  to address  the topic                                                                    
of  deferred   maintenance,  and   knew  the  state   had  a                                                                    
significant  backlog,  particularly  at  the  University  of                                                                    
Mr. Steininger  explained that there  was about  $30 million                                                                    
from the  Alaska Capital Income  Fund in the  capital budget                                                                    
for  deferred maintenance.  He had  chosen not  to highlight                                                                    
the deferred maintenance  on the slides as  he was scheduled                                                                    
to present on the topic in more depth the following day.                                                                        
9:32:53 AM                                                                                                                    
Mr. Steininger  noted that remaining slides  were high-level                                                                    
tables.  He advanced  to slide  11,  "FY2024 Capital  Budget                                                                    
Snapshot," which showed a  table illustrating a distribution                                                                    
of the capital budget by  department. He highlighted that it                                                                    
was possible  to see that  there was a few  departments with                                                                    
large amounts of General  Fund: Department of Transportation                                                                    
and Public  Facilities, that leveraged a  significant amount                                                                    
of federal funds;  Department of Environmental Conservation,                                                                    
also leveraging  a large  amount of  federal funds;  and the                                                                    
Department of Commerce,  Community and Economic Development,                                                                    
which was where all the  AEA energy programs were housed and                                                                    
where the  bulk of the  GF dollars went. The  other agencies                                                                    
had smaller amounts distributed between them.                                                                                   
Mr. Steininger  looked at slide  12, "FY2024  Capital Budget                                                                    
by  House District,"  which showed  a  table. He  reiterated                                                                    
that  the  table showed  old  House  districts and  was  not                                                                    
updated to  the recent  redistricting. He relayed  that much                                                                    
of the  capital budget fit  into the statewide  category. He                                                                    
mentioned that  in the budget  proposed on December  15, the                                                                    
surface  transportation program  in  DOT was  a single  line                                                                    
item. After  working through the  amendment process  for DOT                                                                    
and   working    through   the    Statewide   Transportation                                                                    
Improvement  Program   (STIP)  proposal  with   the  federal                                                                    
government, the  administration would be able  to break down                                                                    
where  the  surface  transportation dollars  were  going  by                                                                    
district and region.                                                                                                            
Mr.  Steininger showed  slide  13,  "Capital Budget  History                                                                    
FY2014    FY2024,"  which showed  a  bar graph  illustrating                                                                    
capital  budgets for  the previous  ten years.  He commented                                                                    
that the  slide highlighted the constrained  capital budgets                                                                    
in the  period between FY  16 to  FY 21, which  were limited                                                                    
mostly just to matching the  federal dollars coming into the                                                                    
Senator  Bishop referenced  potential funds  for the  Alaska                                                                    
Marine Highway  announced the previous day  by United States                                                                    
Senator Lisa  Murkowski. He  wondered if  the administration                                                                    
anticipated any UGF matching funds yet to be announced.                                                                         
Mr.   Steininger  relayed   that  he   had  received   brief                                                                    
information on  the matter earlier  in the morning  and knew                                                                    
that  there were  a couple  of projects  that the  state had                                                                    
appropriated   for   already,    including   the   Tustumena                                                                    
replacement vessel.                                                                                                             
Co-Chair  Hoffman discussed  the  agenda  for the  following                                                                    
SB  41  was   HEARD  and  HELD  in   committee  for  further                                                                    
9:36:26 AM                                                                                                                    
The meeting was adjourned at 9:36 a.m.