HOUSE BILL NO. 53 "An Act making supplemental appropriations for fire suppression activities and restoration projects relating to earthquake disaster relief; capitalizing funds; and providing for an effective date." 2:40:19 PM LACEY SANDERS, BUDGET DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET, highlighted that the administration had introduced two supplemental bills on January 28 (the statutory deadline). She indicated she would first speak about HB 53. She introduced a PowerPoint presentation titled "HB 53 - Disaster Relief Supplemental Overview" dated March 8, 2019 (copy on file). The items in the bill were related to the 2018 Cook Inlet earthquake and included capitalization of the Disaster Relief Fund, Federal Highway Administration (FHWA) funding within the Department of Transportation and Public Facilities (DOT), and state facilities costs not covered by insurance. Additionally, the bill included funding for FY 19 fire suppression activity under the Department of Natural Resources (DNR). The total bill was $139 million, comprised of $102 million in requested federal receipt authority and $37.3 million in general funds (matching funds and direct unrestricted general funds). Ms. Sanders advanced to a bar chart on slide 4 showing a historical summary of disaster supplemental appropriations from FY 14 to FY 19. She reported that disasters were unpredictable, and the funding needed from year-to-year varied depending on events and the Disaster Relief Fund balance. The administration was concerned about the current level of the disaster fund. As of March 5, the balance was currently an unobligated $362,900, which was projected to be fully expended by April 1, 2019 (slide 5). The Department of Military and Veterans Affairs (DMVA), Division of Homeland Security and Emergency Management managed the fund and was diligently analyzing the outstanding disasters to make funding available for the Cook Inlet earthquake response. The urgency of the legislation was due to the low fund balance. 2:43:44 PM Ms. Sanders looked at a high level overview of items in the bill (slide 6). The first item of $7.9 million was for DNR fire suppression. The amount that had historically been in the operating was low and not sufficient; it was anticipated that approximately $7.9 million would be needed heading into the fire season. The second item was an appropriation to DOT totaling $65 million in FHWA federal receipts with a match requirement of $6.5 million. The funding would be used to work on roads damaged by the earthquake; it was a multi-year appropriation - the supplemental request would allow the work to occur sooner and would enable the state to continue to collect federal receipts for the work into FY 20. Ms. Sanders reviewed a $1 million UGF appropriation to DOT for costs not covered by insurance for state facilities (item 3, slide 6). She elaborated that DOT and the Department of Administration (DOA) were working with DOA's Division of Risk Management to address all the facility damages. There were some things deemed not coverable by insurance. For example, part of the funding would go to repair damage to a correctional facility parking lot. Additionally, administrative costs associated with buildings and broken items in buildings were other examples of items covered by the appropriation. Ms. Sanders addressed the last item was a fund capitalization of the Disaster Relief Fund for $21,901,700. She detailed the fund balance was anticipated to reach zero in the near future. The department was asking for federal authority related to what was allowed by the disaster declaration. The administration recognized the redundancy; the operating bill allowed any receipts received on behalf of a disaster to be deposited into the Disaster Relief Fund, but HB 53 was an opportunity to clarify the necessary amount. She noted that the numbers were estimates. The $21.9 million was based on an estimate that had been revised after the signing of the disaster declaration. The amount specific to the Cook Inlet earthquake had been reduced to $12 million. The administration was requesting to continue the $21 million appropriation in anticipation of any potential spring disasters. The goal was to ensure there was money available in the fund to allow quick response time to any disasters in the near future. 2:48:03 PM Co-Chair Foster asked what the fund balance had been the previous April. Ms. Sanders did not have the balance from the previous year, but offered to provide the information. She detailed there had been several appropriations to the Disaster Relief Fund to try to increase the balance because the amount appropriated over several years was very low. She believed $10 million had been deposited in 2018 and $2 million had been deposited in 2019. She noted the funds had all been utilized. Vice-Chair Johnston requested a 10-year lookback of the fund balance. Ms. Sanders replied that DMVA had the information and OMB would provide it. Representative Josephson asked whether school districts were eligible for any of the funds. Ms. Sanders deferred the question to DMVA. 2:49:42 PM BRYAN FISHER, STATE COORDINATING OFFICER, HOMELAND SECURITY, DEPARTMENT OF MILITARY AND VETERANS AFFAIRS, answered that school districts, local governments, and certain nonprofits were all eligible for disaster relief funding. Representative Carpenter referenced insurance claims related to the earthquake that had been denied. He wondered about the state's process for scrutinizing whether a denial to pay was legitimate. He remarked that insurance companies liked to not pay when possible. Ms. Sanders replied that the items addressed by the proposed funding increment were not eligible for insurance coverage. She clarified that it was not a situation where claims had been denied. She reported that the DOA Division of Risk Management worked on insurance claims and may have additional information to provide. Ms. Sanders moved to slide 7 and addressed two supplemental amendments that had been submitted to the legislature on March 6. She relayed that OMB was still working with agencies to work through the needs and on the costs identified related to the Cook Inlet disaster. She elaborated that DOT was requesting $1 million for administrative activities associated with surface transportation; the costs were not covered by FHWA or the Federal Emergency Management Agency. For example, funds would go towards costs associated with administrative staff working to support any engineers or surveyors that may not be covered by FHWA. The second item was $1 million in federal funding for the Department of Labor and Workforce Development related to the Disaster Unemployment Assistance Program. She elaborated that individuals who had interruption to work could apply for individual assistance or self-employment funding. The department had some existing authority but needed the additional $1 million to ensure the funding was provided to eligible individuals. Co-Chair Foster remarked that the committee would try to get the bill passed quickly. HB 53 was HEARD and HELD in committee for further consideration.