SENATE BILL NO. 164 "An Act making appropriations, including capital appropriations, reappropriations, and other appropriations; making supplemental appropriations; and providing for an effective date." 9:24:20 AM Co-Chair Bishop relayed that the committee would consider a CS for SB 164, set an amendment deadline, and set the bill aside. Co-Chair Stedman MOVED to ADOPT proposed committee substitute for SB 164, Work Draft 32-GS2436\B (Dunmire, 4/9/22). Co-Chair Bishop OBJECTED for discussion. 9:25:02 AM CODY GRUSSENDORF, STAFF, SENATOR CLICK BISHOP, gave an overview of the information he would address, including a Summary of Changes document and three reports from the Legislative Finance Division (copy on file). He explained that Report A showed each project proposed by the governor and the structure of funding delineated by columns listing the governor's supplementally-funded projects, FY 23 projects, the Senate CS total, and a column with comparison of the totals. He explained that Report B had the same column structure and showed the agency spending by Unrestricted General Funds (UGF). Report C was the same but showed total fund sources. 9:26:29 AM Mr. Grussnedorf commented that the CS (Version E) considered all projects proposed by the governor, including the two supplemental bills, and the objective of the CS was to find a baseline starting point for the committee's consideration during the budget process. He addressed the Summary of Changes document: General Overview: Version B incorporates capital requests by the Governor in SB 165 and SB 176 supplemental bills. Finance CS ver. B does not: ? add any new legislative projects ? increase funding to any projects ? include any legislative reappropriations ? include any GO Bond proposed projects Finance CS ver. B Removes all Mental Health budget capital items. Finance CS ver. B Removes the following fund sources: ? Coronavirus Capital Project Funds (CCPF) projects ($64M) ? Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) ($72M) Governor's budgets proposed $90.7 million of FY 22 Supplemental projects funded with unrestricted general fund (UGF) dollars. Finance CS Ver. B moves all but $3.1 million of those to FY 23. These projects are highlighted below. Spend Summary: Governor's budgets including supplementals proposed to spend a total of $249.1 million UGF. Finance CS Ver. B including supplementals proposes to spend $197.4 million UGF, a difference of $51.7 million. This is a 20.7% reduction. Mr. Grussendorf thought it was notable that the total spend for the proposed CS did not include the $14 million in mental health capital projects, nor did it include the $75 million in proposed Infrastructure Investment and Jobs Act (IIJA) spending in SB 241 [the supplemental appropriations bill at the request of the governor]. The capital budget would potentially include the projects. He continued to address the Summary of Changes document: Projects included in the FY 22 Supplemental section of Finance CS ver. B: ? DCCED, AEA Electric Vehicle Infrastructure Plan $1,500,000 UGF ? DOC, Suicide Prevention Barriers $750,000 UGF ? DOH, Office of Children's Services Lease Expansion or Relocation $640,000 UGF $360,000 Fed ? DNR, National Historic Preservation Fund $200,000 UGF ? DCCED, Prince William Sound Science Center & Technology Institute Facilities Replacement and Associated Debt $5,950,000 EVOS ? OOG, Elections Security under the Help America Vote Act $1,250,000 Elect. Fund CSLFRF projects in Finance CS that are changed to UGF fund source: Page 3 Line 8 DCCED, Alaska Travel Industry Association $5,000,000 UGF Page 5 Line 17 DOH, Division of Public Assistance E- Forms and Online Noticing $4,000,000 UGF matches $4,000,000 Fed funds Page 5 Line 19 DOH, Division of Public Assistance Eligibility System Replacement $4,700,000 UGF matches $18,800,000 Fed funds Page 7 Line 3 DNR, Statewide Park Sanitation Deferred Maintenance and Upgrades $1,418,000 UGF 9:31:07 AM Mr. Grussendorf continued to address the Summary of Changes document: Funding requests decreased in Finance CS: Page 2 Line 25 DCCED, AEA- Strategic Plan for Railbelt Assets decreased to $1,500,000 UGF. Original request was for $2,500,000 UGF Page 7 Line 24 DPS, Mobile and Handheld Radio Replacement decreased to $1,000,000 UGF. Original request was for $3,728,000 UGF Governor's projects removed in Finance CS and associated fund source: ? DOA, Azure Adoption to Cloud Migration $23,116,000 UGF ? DCCED, Voice of the Arctic $1,000,000 UGF ? DFG, Arctic Fisheries $1,000,000 UGF $2,000,000 Fed ? DNR, Cook Inlet Petroleum Potential $1,200,000 UGF ? DEED, William N. Miller K-12 Memorial School, Napakiak $22,112,000 UGF $32,784,000 REAA ? DOH, Information Technology Security Program Assessment $1,900,000 UGF ? DOH, Health Record Infrastructure Improvements $30,000,000 CCPF ? DNR, Eagle River Fire Crew Facility $13,856,000 CCPF ? UA, Student Information Technology Systems $20,000,000 CCPF ? DCCED, City of Palmer Wastewater Treatment Plant $6,900,000 CSLFRF ? DCCED, Alaska Mariculture Alliance- Grant Program $25,000,000 CSLFRF ? DNR, Food Security Agriculture Incentive Grant Program $25,000,000 CSLFRF Mr. Grussendorf detailed that that the Coronavirus Capital Project Fund (CCPF) projects that were removed were the result of discussions with the Office of Management and Budget (OMB) that indicated the Department of Treasury was unlikely to accept the grants for the projects. He cited ongoing discussions with OMB regarding how to put the state's plan forward and what projects to include. The Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) projects were removed and not changed to UGF funding. 9:33:27 AM Senator Hoffman asked for more explanation regarding the Napakiak school project. Mr. Grussendorf understood that schools within the Regional Educational Attendance Area (REAA) were funded through the School Construction Grant list (via statute), which was how the committee intended to fund the Napakiak School. Senator Hoffman asked if the item had been fully funded in the governor's request. Mr. Grussendorf answered "yes." Senator Wilson asked about the $136 million being removed from CCPF and CSLRF funding. He asked about the intention of the funding and whether it was to be used at a later date. Mr. Grussendorf explained that the $64 million of CCPF funds had been authorized in the American Rescue Plan Act (ARPA) and was originally intended for broadband. Subsequently federal guidance was issued that opened up additional eligibility that was very stringent. There were currently no projects proposed to access the funds. Senator Wilson asked about the deadline to request the funding and wondered if the plan was to utilize the amendment process to access the funds. Co-Chair Bishop thought the deadline was September of 2022. He answered affirmatively that the amendment process would be utilized. Senator Wilson asked if it was possible to get the criteria information in order to utilize the funds. Co-Chair Bishop understood that the criteria was that the funding was for broadband projects. Mr. Grussendorf stated that he had information on the guidance for the CCPF and agreed to forward the information. He cited the criteria for treasury to accept the grants: 1. The project must be designed to directly enable work, education, and health monitoring. 2. The project must address a critical need that resulted from or was made apparent or exacerbated by the COVID-19 public health emergency. 3. The project must address a critical need of the community to be served by it. 9:36:34 AM Co-Chair Stedman commented that it was early in the budget process and the committee would be balancing fund sources throughout. He mentioned the concern of the Napakiak School and asserted that it was the committee's intent to get the school funded in the current year. He discussed bond debt reimbursement and REAA area funding that was linked to it. He mentioned a balanced approach and picking up some arrears. He expected discussions on the mechanics of getting the school fully funded. He did not want the public to conclude that the school was being removed from the budget process and asserted that the committee was considering fund sources. Co-Chair Bishop stated the school would be funded through statute. Senator Wilson thought the previous speaker had stated that the intent was to not have so many appropriation bills "floating around." He asked if the intent was to combine supplemental capital projects and new infrastructure capital projects. Co-Chair Bishop stated that the committee was following the path to have one capital budget. He answered "yes." Senator Wilson asked if the committee's intent was to look for amendments that would cover all three sets of projects. Co-Chair Bishop stated that there was currently one capital budget with a small supplemental in FY 22. He asked Co- Chair Stedman to comment. Co-Chair Stedman reminded that it was just the beginning of establishing a budget baseline and the approach was not much different than how the committee was approaching the operating budget, which provided clarity for the public. He explained that generally speaking the legislature did not have multiple appropriation bills, and there was normally a consolidation of appropriation bills to minimize numbers. He explained that the columns on the backup reports were to provide clarity on the proposed projects. Co-Chair Bishop WITHDREW his OBJECTION. There being NO further OBJECTION, it was so ordered. The CS for SB 164 was ADOPTED. SB 164 was HEARD and HELD in committee for further consideration. Co-Chair Bishop relayed an amendment deadline of Thursday, April 14 at 5 o'clock p.m. 9:40:28 AM AT EASE 9:40:38 AM RECONVENED Co-Chair Bishop discussed the agenda for the afternoon.