SENATE BILL NO. 142 "An Act making appropriations, including capital appropriations, supplemental appropriations, reappropriations, and other appropriations; making appropriations to capitalize funds; and providing for an effective date." 1:35:51 PM Vice-Chair Bishop MOVED to ADOPT the committee substitute for SB 142, Work Draft 30-GS2565\O (Martin, 4/24/18). Co-Chair MacKinnon OBJECTED for discussion. 1:36:06 PM AT EASE 1:37:47 PM RECONVENED 1:37:57 PM LAURA CRAMER, STAFF, SENATOR ANNA MACKINNON, explained the committee substitute (CS). She pointed out the differences and changes between the governor's proposed budget and the current version. She noted that the governor had also introduced a nontraditional capital request bill that was contingent on the passage of some form of revenue. She stated that the CS included some items in the governor's contingency bill. She thanked the work of the various departments and the Legislative Finance Division (LFD) on the development of the budget. She read from a prepared statement: Section 1, Pages 2-10: Agency capital appropriations proposed by the Governor and amended by the Senate Finance Committee Changes/Highlights: Page 2, line 19: Bulk Fuel Upgrades uses nearly $5 million in AIDEA Dividends to replace UGF Page 3, lines 18-20: Added the Cruise ship tender dock reconstruction for $1,105,000 using Cruise Vessel Passenger funds Page 3, lines 31-32: Added the Ketchikan Cruise ship berth 4 dock expansion for $3,000,000 using CVP funds Page 4, lines 5-9: Funds the first 5 projects on the school major maintenance list $24,203,372 Page 5, lines 14-15: This has to do with the Pittman Robertson Funds we receive from the Federal Government there was concern with overspending the Fish and Game fund, so we have replaced the $2 million fish and game funds with $2 million in Statutory Designated receipts and $2 million in Charter Revolving loan funds 1:40:38 PM AT EASE 1:40:58 PM RECONVENED Ms. Cramer looked at page 4 and noted that the CS included $24.2 million in maintenance funding for the top five projects on the Major Maintenance list. She continued to address her prepared statement: Page 5, lines 19-20: Funded the Governor's project to modernize and replace the existing election voting system $4.8 million $3.8 million is funded using $3 million in federal and $800,000 in reappropriations found in Section 14 with $1 million currently in the election fund Page 5, lines 21-27: Included $20 million to address deferred maintenance needs within State agencies and included intent language that the Office of the Governor prioritize deferred maintenance needs and distribute the funds to address the highest priority issues Page 5, line 28 page 6, line 21: Included IT projects for State agencies to modernize old systems and upgrades in order to remain in compliance with federal requirements Page 6, lines 25-26: Funded the Emergency Medical Services Match for Code Blue at the FY18 level of $500,000 Page 6, lines 29-30: Funded the Pioneer Homes Renovations and Repair at the FY 18 level of $1,000,000 Page 7, lines 15-20: Included the projects approved by the Exxon Valdez Oil Spill Trustee Council using EVOS funds Page 7, lines 30-31: Reduced the National Mineral Security Program funding based on anticipated reduced funding from the Federal government from $16 million to $5 million Page 8, lines 24-25: Included funding for AHFC for facility deferred maintenance $3 million in Federal Funds and $3 million of AHCC funds this is in addition to $3 million in AHFC funds and $1 million Federal funds included in the operating budget for on- going maintenance Page 9, lines 4-5: Funded the Senior Citizen Housing and the FY18 level - $1 million Page 9, lines 6-7: Funded the Supplemental housing development program at the FY18 level - $3 million Page 9, lines 13-17: In response to the accident that closed the highway and rerouted traffic for multiple days Added intent language to the Department of Transportation directing them to develop a temporary traffic control plan, as well as emergency traffic control guidelines for the Glenn Highway from milepost 0 to 35. Page 9, lines 26-28: Funded the Municipal Harbor Facility grant fund at $5 million using UGF and a reappropriations found in Section 22 Page 10, line 6-10: Funded Federal-Aid Highway match $51 million in UGF and $14 million in reappropriations found in Section 21 The Federal aid aviation and other non-federal aid highway program state match can be found in Section 21 1:47:18 PM Ms. Cramer continued with her testimony: Items removed from the Governor's requested budget in Section 1: Port of Anchorage $40 million The Correctional Security Upgrade project was moved from the numbers section to the language section as we are funding this using a reappropriations found in Section 18 The Fish and Game vessel and aircraft maintenance repair and upgrades was moved from the numbers section to the language section as we are using a Reappropriation found in Section 20 Did not include the amendment from the Governor requesting legal and financial due diligence relating to AK LNG for DNR and DOR - $750.0 for both Did not include the amendment from the Governor relating to the Enhanced 9-1-1 for $8,477,000 Removed funding relating to the Adak Airport operations as it is an item in the operating conference committee Public and Community Transportation State Match $1,000,000 Fully funded Community Assistance in the Operating Budget which communities could prioritize the local transportation match program Removed the Governor's project for the Commuter Rail Concept for $4.5 million Sec. 2 pages 11-13: The breakout of funding by agency for the appropriations made in section 1 Sec. 3 pages 14-15: The breakout of statewide funding for the appropriations made in section 1 UGF: $139,492,862 DGF: $$62,951,500 Other: $73,355,000 FED: $1,087,996,679 Sec. 4 page 16: Supplemental capital projects and grants Page 16, lines 10-11: Included the project to move barracks from JBER to Mertarvik to help relocate the residents of the village of Newtok - $960.0 leverages $3.8 million in Federal funds through the Denali Commission Page 16, lines 15-17: This increase the appropriation to an EVOS project that was funded in the FY18 capital budget by $3 million due to an update appraisal of the land Page 16, lines 21 26: Funding for the processing and storage of untested sexual assault kits statewide - $2.5 million also added intent language to guide the department in this process Page 17, line 5: Included the Klutina Lake road survey project for $350.0 requested by the governor Page 17, lines 9-12: Included funding for the University of Alaska to conduct a study on Long- acting contraception's and for them to provide interim reports to the legislature - $500.0 Sec. 5 page 18: Funding by agency for the appropriations made in Sec. 4 Sec. 6 page 19: Statewide funding for the appropriations made in Sec. 4 UGF: $10,310,00 Other - EVOS: $3,000,000 TOTAL: $13,310,000 Sec. 7 pages 20: Included some supplemental operating items proposed by the Governor there are still several outstanding supplemental items that have not been agreed to by both bodies. Sec. 8 page 21: Funding by agency for the appropriations made in Sec. 7 Sec. 9 page 22: Statewide funding for the appropriations made in Sec. 7 UGF: $3,795,700 DGF: $780,000 Fed Rcpts: $6,500,000 TOTAL: $11,075,700 Sections 10-19 are primarily Governor's request supplemental language sections as follows: Sec. 10 (c) page 23, lines 1-7: Department of Administration labor contract negotiations and arbitration support $792,000 extends lapse date through FY19 Sec. 11 page 23, lines 8-18: Department of Education and Early Development (a) $400,000 from the municipal capital project matching grant fund to Mt. Edgecombe boarding school for maintenance and operation of the Aquatic Center (b) the 1 percent for arts funds relating to the aquatic center estimated to be $200,000 is appropriated to the DEED for equipment, capital improvements, or maintenance of the aquatic facility Sec. 12 page 23, lines 19-23: Department of Health and Social Services - $5 million to the Alaska temporary assistance program to satisfy the Federal maintenance of effort requirement for FY18 and FY19 Sec. 13 page 23, lines 24-27: Department of Law - $3,370,486 to the civil division for judgments and settlements for FY18 1:52:54 PM Ms. Cramer continued with her testimony: Sec. 14 page 23, line 28 page 24, line 11: Fund capitalization of the election fund for $3 million from reappropriations listed in this section Sec. 15 page 24, lines 12-20: Standard language no change Federal and Other Program Receipts Standard Federal receipt authority language for agencies to receive Federal and other receipt authority from Legislative Budget and Audit Sec. 16 page 24, lines 21-25: Standard language no change Insurance Claims amounts to be received in settlement of insurance claims are appropriated to the general fund from the (1) State insurance catastrophe reserve account or (2) appropriate state agency to mitigate the loss Sec. 17 page 24, line 26 page 25, line 31: National Petroleum Reserve Alaska Impact Grant appropriated to the Department of Commerce, Community, and Economic development for capital project grants under the NPR-A impact grant program. This year's grants total $11,611,722 Sec. 18 page 26, lines 1-5: Department of Corrections Reappropriation to the Department of Corrections for $1,605,479 for security upgrades at correctional facilities this project was a request from the administration Sec. 19 page 26, lines 6-22: No change from what the Governor proposed - Department of Environmental Conservation Reappropriations not to exceed $200,000 to the DEC for project administration of water quality enhancement, water supply, sewage, and solid waste facilities grants to municipalities Sec. 20 page 26, line 23 page 27, line 11: Department of Fish and Game Reappropriations estimated to be $309,025 to Fish and Game for maintenance of, repair of, and upgrades to vessels and aircraft Sec. 21 page 27, lines 12-24: Department of Transportation and Public Facilities (a) Reappropriation of $12,111,142 to DOT for federal aid aviation match and other non-federal aid highway program match Page 27, line 25 -page 33, line 26: Various reappropriations of to federal aid highway match Page 33, line 27 Page 34, line 14: Amendment requested by the Governor - Reappropriations not to exceed $10 million to DOT, Alaska international airport system for rehabilitation of runways and taxiways Sec. 22 page 34, lines 15-19: Fund Capitalization Reappropriation $1.97 million to the harbor facility grant fund for the muni harbor grant program - $3 million in numbers section equals $5 mil for the program Funds first project on the list Sitka Crescent Harbor Sec. 23 page 34, lines 20-22: Fund Transfer The large vessel gaming and gambling tax account balance estimated to be $8,700,000 is appropriated to the Alaska marine highway system fund Sec. 24 page 34, lines 23-28: Fees collected for NRA license plates estimated to be $6,000 is appropriated to the Department of Commerce to be distributed as a grant to the Alaska SCTP non-profit corporation for statewide youth shotgun sports programs. Sec. 25 page 34 page 35 line 3: Reappropriation estimated to be $98,782 to the City of Kodiak for design and engineering of a new fire hall due to structural damage as a result of the earthquake in 2017 1:57:14 PM Ms. Cramer continued with her testimony: Sec. 26 page 35, lines 4-20: Reappropriation of Legislative Appropriations for renovation and repair of, technology improvements to, and other necessary projects related to legislative building and facilities Sec. 27 page 35, line 21-26: Lapse (a) capital projects, Insurance claims to state agencies to mitigate loss, and NPR-A grants lapse (b) capitalization of funds, insurance claims to the state insurance catastrophe reserve account, and fund transfer do not lapse (c) capital projects lapse unless a fiscal year is specified Sec. 28 page 35, lines 27-28: Immediate Effective Date for supplemental capital items and Agency operating appropriations Sec. 29 page 35, lines 29-30: June 30, 2018 Effective Date for Agency reappropriations, other reappropriations Sec. 30 page 35, line 31 page 36, line 1: July 1, 2018 Effective Date except as provided in sections 28 and 29 1:58:41 PM Co-Chair MacKinnon WITHDREW her OBJECTION. There being NO further OBJECTION, the proposed committee substitute was adopted. 1:59:01 PM AT EASE 2:01:03 PM RECONVENED Senator Micciche relayed that he had asked for clarification on the difference between the amount of Undesignated General Funds (UGF) in the governor's version and the current version of the bill. He noted that the difference was $2.8487.9 million lower than the governor's version. Vice-Chair Bishop shared that when the committee began to contain spending and find efficiencies he had looked into the Department of Transportation and Public Facilities' (DOT) Highway Equipment Working Capital Fund. He discovered that previously the fund expended $25 million annually. He worked with the State Equipment Fleet (SEF) and reported that last year's and the current year's appropriation was $15 million. He expounded that after explaining his methodology for the cuts that included extending the length of time equipment was used, the SEF were currently using the same equipment he had identified four year's earlier. He thanked the department and appreciated working with SEF. 2:03:10 PM Co-Chair MacKinnon commented that the state continued to face significant budget deficits. The capital budget was based on funds from savings and state revenue was not sufficient to support some of the appropriations without taking other measures. She acknowledged that there were additional wants and needs throughout the state. She prioritized public safety and deferred maintenance through the reapporpriation process. She looked forward to hearing public testimony. Co-Chair MacKinnon announced that public testimony would be heard the following day. SB 142 was HEARD and HELD in committee for further consideration. 2:05:10 PM AT EASE 2:11:36 PM RECONVENED