SENATE BILL NO. 18 "An Act making appropriations, including capital appropriations and other appropriations; making appropriations to capitalize funds; and providing for an effective date." 9:26:41 AM Ms. Rehfeld discussed "Senate Bill 18/House Bill 64; Department UGF/DGF/Other/Fed Summary - Capital Budget" (copy on file). She shared that the summary included the mental health capital items. The mental health portion of the bill totaled $14.50 million; of that, $12.650 million were general funds. The total proposed Capital Budget for FY 14 was $1.838 billion. The UGF request was $795.237 million at roughly 44 percent; DGF was $74.617 million at roughly 4 percent; other funds were $56.580 million at roughly 3 percent; federal funds were $911.948 million at 49 percent of the total requested budget. The DGF included the Renewable Energy Grant Funds and the Regional Education Attendance Area Fund. Other funds included the International Airport and statutory designated receipts. Co-Chair Meyer noted that the bulk of the federal funds were used for transportation. Ms. Rehfeld agreed. Co-Chair Meyer stressed that the federal dollars were "driving" much of our transportation programs. Ms. Rehfeld replied that some of the other funds that were leveraged were the request for the municipal water and sewer and projects. Co-Chair Meyer wondered if the federal funding for the roads had been decreasing in recent years. Ms. Rehfeld replied that there had been a continuation of a considerable amount of federal funding. She explained that Department of Transportation and Public Facilities (DOT/PF) could provide a more detailed response. 9:30:46 AM Ms. Rehfeld stated that Sections 1 through 3 of SB 18 were the numbers sections. In the capital budget, Section 1 was organized by department; and the projects were listed in priority within each agency with the deferred maintenance request at the end. The only exception was DOT/PH, because their requests were listed in a program area with the requests listed in alphabetical order. She stated that the detail budget books contained listings of the projects in order by reference numbers. She explained that Section 2 was the funding sources for the appropriations for Section 1 by department. Section 3 was the total summary of the funding sources for Section 1. Ms. Rehfeld stated that Section 4 was the federal and other program receipt language for the LB&A provisions. Section 5 was for fund capitalizations, including the General Obligation (GO) bond language. Section 6 was a fund transfer section, which included the $25 million from the general fund (GF) into the Energy Grant Fund. Section 7 regarded insurance claims. If there was a settlement for an insurance claim, it could be used for the Catastrophic Reserve Risk Management account. Section 8 was the National Petroleum Reserve Alaska (NPRA) Grants estimated to be $3.945 million in FY 14. These funds came from the sale, rental, bonus, or royalties on leases issued within the NPRA. The funds would be available for appropriation for communities that were directly impacted by the leases. The annual grant application process was prepared by DCCED. Ms. Rehfeld stated that Section 9 was a reappropriation of $1.750 million from the Akiak Rural Power System Upgrade. This upgrade was completed for approximately $4.5 million, and a portion of that was federal funding from the Denali Commission. There was a balance in the project that was requested for reappropriation to a rural power system upgrade in Atmautlauk. Section 10 was a reappropriation of balances in Department of Environmental Conservation (DEC) for the engineering and management of municipal water and sew projects. Section 11 was a reappropriation of approximately $2 million from the Kodiak Near Island facility in the Department of Fish and Game (DFG) to be redirected to DFG's hunting and fishing licensing system. Ms. Rehfeld shared that Section 12 were the lapse provisions for the various sections, mostly related to capital lapse provisions for reappropriations and fund transfers. Section 13 declared that the reappropriations would be effective June 30, 2013. Section 14 was the effective date of July 1, 2013 for the FY 14 capital budget. Ms. Rehfeld highlighted some specific funding sources. She stated that OMB proposed to spend $120.2 million from the Alaska Housing Capital Corporation Fund, which was set up in 2006 with a $300 million appropriation. Since that time, there had been other appropriations into that fund and interest had been earned. She stressed that there were needed investments in order to grow the economy. The $95.2 million request for the Susitna Watana project and the $25 million Alaska Gasline Development Corporation, totaling $120.2 million. 9:38:54 AM Ms. Rehfeld shared that $20.745 million out of AIDEA dividends that were proposed to fund 3 Roads to Resources programs and one other: $8.5 million for Ambler; $7.5 million for the Dalton Highway; $2 million for a smaller program; and $2.745 for the strategic minerals assessment. Senator Hoffman wondered if there was a location within the budget for the Roads to Resources projects. Ms. Rehfeld replied that Ambler and Dalton Highway were specifically written in the budget, and the $2 million for the smaller program would be outlined by DOT/PF. Ms. Rehfeld stated that the Alaska Housing Finance Corporation (AHFC) dividends were currently lower than three years prior. In the current budget proposal, $10.6 million in AHFC dividends was directed completely to their debt service. Ms. Rehfeld pointed out that there was no request for using the Alaska Capital Income Fund that had a balance of approximately $76 million Ms. Rehfeld summarized the projects in the proposed budget: Susitna Watana project; weatherization and home energy rebates and renewable energy; the infrastructure, highways, aviations, and village safe water; the Nightmute School and the Kwigillingok school deferred maintenance. Co-Chair Meyer wondered if the last two schools' requests mentioned were a result of the Kaysulie lawsuit. Ms. Rehfeld responded that Nightmute was the next school that was on the "Kaysulie List" for funding in FY 14, and was a $33 million project. It was funded in 2012, but the funds were not available to complete the project. The next school on the "Kaysulie List" was Kwethluck, which would be addressed in the FY 15 budget. 9:43:19 AM Co-Chair Meyer wondered if the State Library and Museums Project (SLAM) was complete. Ms. Rehfeld replied that the previous request of $20 million for SLAM would not complete the project, because $50 million was required to complete SLAM. She stressed that the governor supported SLAM. Co-Chair Meyer noted that there were many projects that were in-progress. He stressed the need to focus on completing projects. He wondered why the Engineering Buildings for the University of Alaska Anchorage (UAA) and University of Alaska Fairbanks (UAF) were not included in the list of requests. Ms. Rehfeld that OMB was supportive of the Engineering Buildings project, but there was imperative work that was required for existing University of Alaska buildings. Senator Hoffman expressed gratitude for the addition of $50 million for the weatherization and home energy rebate programs. He wondered if there was a conversation regarding the mobilization of the workforce to implement the rebate programs. Ms. Rehfeld responded that there was discussion regarding the success of the programs. She understood that there was currently more demand that what workers were able to accomplish. SB 18 was HEARD and HELD in committee for further consideration. 9:47:46 AM AT EASE 9:48:36 AM RECONVENED Co-Chair Kelly discussed the week's agenda, and housekeeping.