SB 130-ECONOMIC STIMULUS TASKFORCE  9:29:00 AM CHAIR MENARD announced the consideration of SB 130. SENATOR LESIL MCGUIRE, Alaska State Legislature, said she is the sponsor of SB 130, which is a tool for analyzing the Federal Recovery and Reinvestment Act (ARRA) that contains almost $1 trillion to be spread among the states. It is coming to Alaska very rapidly with some complex rules and deadlines. The first deadline was March 10. There have been people in this building hard at work to understand this stimulus package and what Alaskans can do to respond to its deadlines. The bill is not aimed at embarrassing anyone or to imply that nothing has been done. The bill responds to the rapid nature of ARRA without a logical place for the public to turn to, and it will help communications between the administration and the legislature. Larry Persily, in the House, and Steve Porter, in the Senate, are lead staff working on ARRA. The governor has appointed Karen Rehfeld as the lead from the Office of Management and Budget. Alaska has responded to ARRA regarding transportation and infrastructure. The next deadline is April 3, and it includes education and Medicaid. 9:32:01 AM SENATOR MCGUIRE said she was in Washington DC last week and discussed ARRA. She wants SB 130 to go to the finance committee where it can be considered with other tools and strategies for using ARRA. The narrower scope is the third portion of the stimulus package and pertains to competitive grants. There are grants with large pots of money to be applied for across the United States with a myriad of dates and deadlines. There are 33 pots of money for renewable energy, hunger, and more. Alaska's municipalities and nonprofits are eligible for many of these grants. The taskforce can oversee the distribution of the grants. The bill suggests that the taskforce consist of three members each from the House and Senate, two members from the administration, and one from the Alaska Municipal League. 9:34:06 AM SENATOR MCGUIRE said the taskforce could be set up for the interim as a natural place for people to go for information exchange. One concern stems from individuals from outside who announced they had already begun applying for Alaska's portion of the energy funds to develop algae biomass energy. Savvy people may be ahead of the curve and in possession of information that Alaska lacks. A taskforce is not the magic answer but has gotten a lot of traction from the public. There is concern about the money from the stimulus package. 9:36:01 AM CHAIR MENARD asked how many other states have a taskforce. SENATOR MCGUIRE said many states have, including Ohio, Virginia, and Maryland. About 30 percent of the states are using the taskforce model, which are largely organized with members of the legislatures and the administrations. Some were created by an assembly or through the governor, and some states include members of the public. The committee could consider that. This is not an original idea. The majority of states have some organized method of responding to ARRA. 9:37:49 AM CHAIR MENARD said Alaska has money and skilled people. She has some reservations because she recognizes "the quality of financial people that we do have, even in this building." SENATOR FRENCH said he thinks this is a wonderful idea. There is no clear central entity steering this money and that is unfortunate. It looks like April 3 is a crucial date. He asked what the taskforce will do after that date. 9:39:26 AM SENATOR MCGUIRE said this bill has been referred to two committees, which made that date null and void for the taskforce. It can deal with the myriad of deadlines for the competitive grants that occur in May, June, August, September, December, and January. At this stage, Larry Persily, Steve Porter, and the co-chairs of the finance committees will have the leadership for the April 3 date. This taskforce will begin right after legislative session on April 19 by gathering information and distributing it to communities and nonprofits. That money doesn't come through the state; it comes directly to the boroughs and nonprofits, which makes it more onerous. The taskforce will help guide folks who do not have financial savvy and experience. The legislature will be held accountable in the end. "If we want to put our hands up and say you folks out there apply for it and so on, if they miss deadlines, if the money goes to people from outside who are more savvy or snake oil salesmen ... we, the elected members of the House and Senate, are going to be held accountable anyway." 9:42:26 AM SENATOR FRENCH asked about the existing entities that could do the work, including Senator Meyer who chairs the joint Legislative Budget and Audit Committee. "Why wouldn't that be the perfect interim entity to do this work? 9:43:20 AM SENATOR MCGUIRE said that could be the place, but there are no members of the public or the municipal league. She is just looking for someone to recognize the magnitude of this and take the reins. If the bill moves to the next committee it will keep the pressure and momentum for the topic. If Senator Meyer is designated the czar of Alaska competitive grants, she would be grateful. He and his committee would be well-suited. SENATOR PASKVAN asked about the act being repealed in July 2009. SENATOR MCGUIRE said that needs to be changed. SENATOR PASKVAN asked if February 1, 2010, would be better. 9:44:56 AM SENATOR MCGUIRE said that is a good question. The bill was drafted to set up a framework right away. There are dates that go through 2012, but the drop-dead date is January 1, 2011. It could be left until the taskforce finishes its work. She suggested repealing it in April 2010. SENATOR PASKVAN said that is appropriate. SENATOR MEYER said this is a concept that should be considered. There are a lot of people working on this issue, including Alaska's congressional senators. Larry Persily has been working on it more than anyone and at the request of the House Finance Committee. The Senate has hired Steve Porter. The next key date is April 3, and it will be up to the administration to request the funds, and it is uncertain that if the governor doesn't request them, what role, if any, the legislature plays. Some people think the legislature has 45 days to request it. He has found that most of this will require the executive branch to make the request and apply for the grants. The role of the legislature is unknown. It may be to just oversee the administration. Thus far, Karen Rehfeld has been fairly cooperative. It is still early in the process. Things are working pretty well, but if things don't continue to work well, a taskforce should be considered. 9:48:03 AM SENATOR MCGUIRE said it will just be a tool. A taskforce doesn't have the weight of the law, but it can help if things don't progress and if the state needs more coordination. There is a lot of work being done in discreet parts, but it may not be getting out to the public. There is no fiscal note. 9:48:56 AM LARRY PERSILY, Staff to the House Finance Committee, Alaska State Legislature, said he has been trying to decipher, translate, and gather information on the economic stimulus bill for the past several weeks. He has been sending updates to all legislators and to a growing list of Alaskans who have requested them. The stimulus requires the governor of each state to certify whether the state wants the money by April 3. If a governor does not request funds then the legislature, by concurrent resolution, can request them for the state. That April deadline only applies to money going through the state. There are a lot of grant funds that the state will administer; "the feds will give money to the state; the state will then grant them out. Those would be covered by the April 3rd deadline." There are a lot of grant programs that don't go through the states. Federal agencies will administer those directly to nonprofits and other entities. The April deadline doesn't apply to those. If Alaska didn't want any funds it would eliminate the money going through the state but not the money going to nonprofits directly from federal agencies. 9:51:03 AM SENATOR PASKVAN asked the amount of the funds going to states. MR. PERSILY said if direct federal spending is subtracted, it is a little more than $800 million, but some of it is by formula, like Medicaid, and some is by formula with kickers, like an increase in unemployment. There are formula grants and competitive grants. Most of those dollars will go to airports, transportation, transit, Medicaid, and education. There is very little discretionary money for the state. 9:52:23 AM SENATOR PASKVAN asked if this taskforce or some other oversight entity will be useful. MR. PERSILY said it would depend on the public demand for information. He was supposed to be at a meeting in Anchorage for 170 representatives of nonprofits who are trying to find out what there is to apply for. There is a need for information. "People got a little hyped up from the news media that the money was instant, but there's a couple dozen programs that never existed until three weeks ago when this was signed into law. So we shouldn't blame federal agencies if they don't have the grant criteria or the applications." Alaskans want information and want to apply for the money. Whether it is a taskforce or office coordinator, the legislature needs to decide what role the state should have in assisting nonprofits and communities in getting money. The Department of Transportation and Public Facilities and Medicaid can take care of themselves, but the question is for the nonprofits. It won't be tens of millions of dollars flowing to Alaska, but it will be worth applying for. 9:54:15 AM CHAIR MENARD asked if Alaska is going to be a good steward of the stimulus money. "Do you have a high confidence level that you're doing everything possible with the limited amount of people that are working on this and the caliber of people that are working on this?" MR. PERSILY said that based on his conversations with John Katz, Karen Rehfeld, the congressional delegation, and agency staff, he is confident that Alaska is doing a good job of determining what is there for Alaska, how to spend it wisely, and how to have a good shot of getting its fair share. SENATOR MEYER said there are a lot of people working on this including the legislature, several nonprofits, and a lot of mayors and municipalities. He is not convinced that a taskforce will help or hinder. The taskforce may be a central point for the public, municipalities, legislators, and nonprofits to get information. Senator Stedman "wants to level it out statewide, so he needs to know what the municipalities have already gotten through the economic stimulus program." He doesn't know how Nome got $125 million for its hospital. That is where a central point could be helpful. Do you agree that the legislative role is secondary? The administration is the lead dog, "but I do think that we can help them and probably should oversee them to make sure they are being as aggressive as possible." Legislation is needed. A joint resolution will be needed if the governor doesn't pursue the certification. What else do you see the legislature needing to do? 9:57:46 AM MR. PERSILY said he was told to not give opinions, but it's his nature. The money for the Indian Health Service hospital in Nome didn't involve the state. If the governor doesn't want funds, the legislature needs to decide if it wants them. When money comes in, the legislature has the power of appropriation for transit and transportation. There is some discretion in the fiscal stabilization funds - the 18 percent that doesn't have to be spent on education but could. That's $20 million subject to legislative appropriation. Helping nonprofits fits in a category of public policy. The legislature needs to look at how it wants to help, whether it is with a taskforce, a coordinating office, staff assignments, or any other means. 10:00:12 AM JEREMY WOODROW, Communications Coordinator, Alaska Municipal League (AML), Juneau, said the AML supports SB 130. Alaska is expected to receive more than $800 million of the ARRA funds. Numerous national and state deadlines come with the package. To make sure that these funds are fully and adequately distributed across the state will be challenging. AML supports a fair and equitable distribution that benefits all Alaska regions and municipalities. The formation of a taskforce is a step in the right direction in minimizing the effect of the recession in Alaska. Including municipalities in the process provides insight and benefit to the taskforce. AML is grateful that SB 130 includes AML as a taskforce member. 10:01:56 AM SENATOR KOOKESH asked if the AML will cover all of its transportation costs related to the taskforce. MR. WOODROW said, yes, AML has participated in many kinds of taskforces, and the board usually supports the travel costs. BRENDA HEWITT, President, United Way Southeast Alaska, Juneau, said her group includes 24 communities and over 30 nonprofit agencies. She asked all her nonprofits, and they see the taskforce as a benefit. Some of the larger agencies already belong to several organizations and they are analyzing the bill from their perspective. The national organizations are already dissecting the bill. Some smaller groups don't have that benefit. "Right here in Juneau we know that there's $990,000 that are sitting on the table unapplied for -- earned income tax credits. We've never been able to get the information out or we haven't gotten people who are below that poverty line to apply for their income tax rebates." The group wasn't coordinated enough to apply for the neighborhood stabilization grant money. There is money that sits on the table that could be spent and put into our economy and used for projects that we know we need. A taskforce or some other entity would be a coordinated effort. Karen Rehfeld has a lot on her plate, and if a nonprofit calls her to ask how to interpret this 1,000-page bill, it will be overwhelming. "I would encourage you to come forth with some avenue that nonprofits can approach." 10:05:17 AM The committee took a brief at-ease. 10:06:28 AM SENATOR PASKVAN moved to adopt Amendment 1 to change the date in section 2 to April 1, 2010. This date will allow the legislature to extend the taskforce if need be. SENATOR FRENCH said the taskforce issues its final report on July 1, 2009. SENATOR MEYER objected to Amendment 1 for discussion purposes. 10:07:44 AM SENATOR PASKVAN said the bill has a final report, but there will be additional activities that will need to be monitored. There would be time for legislators to get more information. SENATOR MCGUIRE recommended calling for a preliminary report on July 1, 2009, and a final report in April 2010. The preliminary report would provide the structure and goals of the taskforce and inform the public of its role. The final report would be issued when the taskforce ends. 10:09:42 AM SENATOR FRENCH suggested moving Amendment 1. SENATOR MEYER removed his objection. Hearing no further objection, Amendment 1 was adopted. SENATOR FRENCH moved Amendment 2 as follows: page 2, line 16, delete "final" and insert "initial". He will suggest a further amendment. 10:11:05 AM SENATOR MEYER objected for the purpose of discussion. SENATOR KOOKESH said in order to vote on this, he wants to know what Senator French's next amendment will be. SENATOR FRENCH said his next motion will be to add a final report in April 2010. SENATOR MEYER removed his objection. Hearing no further objection, Amendment 2 was adopted. SENATOR FRENCH moved Amendment 3 as follows: On page 2, line 16, add subsection (g) as follows: "the taskforce shall submit a final report to the legislature before April 1, 2010." SENATOR MEYER objected for the purpose of discussion. 10:12:17 AM SENATOR PASKVAN said he assumes that the legislature could extend the taskforce if it needed more time. SENATOR FRENCH said right now the taskforce goes away July 1, 2010, and if the body saw fit to extend it, it could. SENATOR MEYER removed his objection. Hearing no further objection, Amendment 3 was adopted. 10:13:42 AM SENATOR FRENCH said the bill is back for discussion. These were minor changes. It needs to be hashed out in finance committee. SENATOR MEYER moved to report SB 130, as amended, from committee with individual recommendations and attached fiscal note(s). There being no objection, CSSB 130(STA) moved from committee.