Legislature(2015 - 2016)SENATE FINANCE 532

04/11/2016 02:00 PM Senate FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
+ Bills Previously Heard/Scheduled: TELECONFERENCED
Moved CSSB 200(FIN) Out of Committee
Moved CSSB 210(FIN) Out of Committee
SENATE BILL NO. 138                                                                                                           
     "An  Act   making  appropriations,   including  capital                                                                    
     appropriations,     reappropriations,     and     other                                                                    
     appropriations;  making  appropriations  to  capitalize                                                                    
     funds; and providing for an effective date."                                                                               
2:18:20 PM                                                                                                                    
Vice-Chair Micciche MOVED to  ADOPT the committee substitute                                                                    
for SB 138, Work Draft 29-GS2741\E (Martin, 4/7/16).                                                                            
Co-Chair MacKinnon OBJECTED for DISCUSSION.                                                                                     
2:18:38 PM                                                                                                                    
AT EASE                                                                                                                         
2:19:34 PM                                                                                                                    
2:19:47 PM                                                                                                                    
Co-Chair  MacKinnon explained  that the  Capital Budget  had                                                                    
been reduced.                                                                                                                   
2:20:14 PM                                                                                                                    
LAURA CRAMER,  STAFF, SENATOR  ANNA MACKINNON,  relayed that                                                                    
she had  worked with her  counterpart on the other  boys, as                                                                    
well as Rob Carpenter  from Legislative Finance Division, to                                                                    
thoroughly  scrub  the  budget  and  comb  through  previous                                                                    
capital appropriations.                                                                                                         
2:20:51 PM                                                                                                                    
Ms. Cramer at page 2,  section 1, which contained the agency                                                                    
capital appropriations proposed by  the governor, as amended                                                                    
in the CS. The first change  was located on Page 2, line 18;                                                                    
Alaska Energy Authority - Bulk  Fuel Upgrades (HD 1-40). She                                                                    
explained that  federal funding had been  eliminated for the                                                                    
upgrades,   as  the   project   currently  had   significant                                                                    
outstanding  federal  funding.  She said  that  the  funding                                                                    
source  had been  switched  from  unrestricted General  Fund                                                                    
(UGF), to  Power Cost Equalization  (PCE) funds.  The second                                                                    
change was  on Page  2, line 20;  Alaska Energy  Authority -                                                                    
Rural Power  System Upgrades  (HD 1-40).  She said  that the                                                                    
federal authority  for the program  had been  eliminated and                                                                    
the funding  source had been  switched from UGF to  PCE. The                                                                    
next  change was  on Page  2,  line 30;  Marine Exchange  of                                                                    
Alaska  -   Alaska  Vessel  Tracking  System   Upgrades  and                                                                    
Expansion  (HD 1-40).  She noted  that the  $600,000 request                                                                    
had  been  decreased to  $400,000.  She  spoke to  the  next                                                                    
change on  Page 3,  line 16, where  intent language  for the                                                                    
Department  of Education  had been  inserted, adding  school                                                                    
major maintenance  application criteria that  would redirect                                                                    
applicants  to  the  Alaska  Housing  Finance  Corporation's                                                                    
(AHFC)  Alaska Energy  Efficiency Revolving  Loan Fund.  She                                                                    
continued  to Page  3, line  31; Mt.  Edgecumbe High  School                                                                    
Deferred Maintenance  (HD 35),  which had been  reduced from                                                                    
$1  million to  $350,000 due  to outstanding  appropriations                                                                    
for deferred maintenance from previous  years. She said that                                                                    
Page 4,  line 7,  reflected the  reduction of  the Statewide                                                                    
Contaminated  Sites Cleanup  (HD  1-40) from  $1 million  to                                                                    
$500,000,  also  due   to  outstanding  appropriations  from                                                                    
previous  years. The  next change  was on  Page 4,  line 21;                                                                    
Sport  Fish Recreational  Boating and  Angler Access  (HD 1-                                                                    
40), the $750,000  UGF had been replaced  with Department of                                                                    
Fish and Game receipts. The next  change was on Page 4, line                                                                    
26; Emergency  Medical Services Match for  Code Blue Project                                                                    
(HD  1-40)  funding source  had  been  changed from  UGF  to                                                                    
alcohol  funds.  She  turned  to   Page  6,  line  9,  which                                                                    
reflected  the change  of $771,400  in UGF  funding for  the                                                                    
NSTAR Re-platforming Project (HD  1-40) to a reappropriation                                                                    
from a previous capital  appropriation for the Department of                                                                    
Revenue for oil  and gas fiscal systems  analysis. She noted                                                                    
that  the  project  was fully  funded,  partially  with  the                                                                    
reappropriation. She  spoke to  the change  on Page  6, line                                                                    
11; the reduction of the  AHFC Cold Climate Housing Research                                                                    
Center (CCHRC) (HD 1-40) from $1 million to $500,000.                                                                           
Ms.  Cramer directed  committee attention  to the  change on                                                                    
Page 7,  line 5; intent  language had been inserted  for the                                                                    
Department  of  Transportation   and  Public  Facilities  to                                                                    
provide  the finance  committees in  both houses  a list  of                                                                    
federal earmarked capital projects  expected to be requested                                                                    
for  repurposing from  the  Federal Highway  Administration.                                                                    
She said that the federal  dollars would be reflected in the                                                                    
FY  18  Capital  Budget,  and   not  FY  17,  but  that  the                                                                    
legislature  had requested  that  the  department provide  a                                                                    
list of projects that they  planned to submit to the federal                                                                    
government for  repurposing. She  continued to Page  7, line                                                                    
14, which reflected  that $3 million of the  $12 million for                                                                    
funding the  Alaska Marine  Highway System  Vessel Overhaul,                                                                    
Annual     Certification     and    Shoreside     Facilities                                                                    
Rehabilitation  (HD  1-40) had  been  switched  from UGF  to                                                                    
Marine Highway Funds. She said  that the Federal-Aid Highway                                                                    
State Match  (HD 1-40) listed on  Page 7, line 25,  showed a                                                                    
fund source change from UGF  to a reappropriation of lapsing                                                                    
funds in  the amount  of $20.5 million.  She noted  that the                                                                    
Airport  Improvement Programs  and Statewide  Transportation                                                                    
Improvement Programs (STIP) were itemized.                                                                                      
2:25:46 PM                                                                                                                    
Ms. Cramer looked at page  7, line 30, where intent language                                                                    
had  been   inserted  that  directed  DOT&PF   to  submit  a                                                                    
quarterly report to the House  and Senate Finance Committees                                                                    
on  the Federal  Aviation Administration  Grant Awards.  She                                                                    
relayed that  this would condition  the department  to share                                                                    
updates  on project  advancement and  project spending  with                                                                    
the  legislature.  She turned  to  Page  12, line  5,  which                                                                    
contained  identical  intent   language  pertaining  to  the                                                                    
Federal  Highway Administration.  She stated  that the  next                                                                    
change could  be found on  Page 18,  line 9, which  showed a                                                                    
reduction in  the Judiciary; Deferred  Maintenance, Renewal,                                                                    
Repair,  and  Equipment  of $688,100.  She  added  that  the                                                                    
current  amount in  the  budget provided  for  the first  11                                                                    
deferred  maintenance projects.  She noted  that items  that                                                                    
had been removed from the budget were as follows:                                                                               
     Department   of    Education   and    Early   Childhood                                                                  
     RN 61010                                                                                                                   
     Kake School Boiler Replacement                                                                                             
     RN 61011                                                                                                                   
     Petersburg    Middle/High    School   Primary    Boiler                                                                    
     RN 61012                                                                                                                   
    Bristol Bay School Energy Upgrades and Renovations                                                                          
     Ms. Cramer  asserted that the three  projects qualified                                                                    
     for the  AHFC loan  program, and  referred back  to the                                                                    
     intent language on Page 3,  line 16. She added that the                                                                    
     $7 million  for the Kivalina K-12  Replacement School -                                                                    
     Kasayulie had also been removed.                                                                                           
     Office of the Governor                                                                                                   
     RN 60987                                                                                                                   
     Primary and General Elections                                                                                              
     Office of Military and Veterans Affairs                                                                                  
     RN 61042                                                                                                                   
     Bethel Scout Battalion - Phase 1 of 5                                                                                      
    Department of Transportation and Public Facilities                                                                        
     RN 51320                                                                                                                   
    Deferred Maintenance, Renewal, Repair and Equipment                                                                         
     RN 52032                                                                                                                   
     Public and Community Transportation State Match                                                                            
     University of Alaska                                                                                                     
     RN 45326                                                                                                                   
    Deferred Maintenance, Renewal, Repair and Equipment                                                                         
2:29:10 PM                                                                                                                    
Co-Chair   MacKinnon    wondered   whether    the   deferred                                                                    
maintenance  requests had  been eliminated  due to  the fact                                                                    
that  those  departments  had   sufficient  funds  in  their                                                                    
deferred  maintenance accounts.  Ms. Cramer  replied in  the                                                                    
Ms. Cramer responded in the  affirmative. She added that all                                                                    
reductions   for  deferred   maintenance   was  because   of                                                                    
outstanding  appropriations that  departments currently  had                                                                    
in their budgets for deferred maintenance.                                                                                      
2:29:49 PM                                                                                                                    
Ms.  Cramer  turned to  Page  19,  section 2,  which  listed                                                                    
funding by agency for the  appropriations made in Section 1.                                                                    
She furthered  that Section 3,  pages 22 through  23, listed                                                                    
statewide funding for appropriations  made in Section 1. She                                                                    
related that  the total UGF spend  in Section 1 of  the bill                                                                    
was $79,747,061.                                                                                                                
2:30:22 PM                                                                                                                    
Vice-Chair  Micciche   pointed  out  that  Ms.   Cramer  had                                                                    
researched outstanding funds in  all departments in order to                                                                    
put those funds to best use.                                                                                                    
Ms. Cramer replied in the affirmative.                                                                                          
2:31:29 PM                                                                                                                    
Ms.  Cramer  turned to  Page  24,  section 4,  which  listed                                                                    
supplemental  capital projects  and grants.  She listed  the                                                                    
supplemental  items  that  had   been  removed  or  reduced,                                                                    
starting with  the Department of Administration;  the Alaska                                                                    
Land   Mobile  Radio   System  reappropriation   request  of                                                                    
$1,274,000 was  reduced and $1,000,000 request  was removed.                                                                    
She furthered  that the request for  reappropriation for the                                                                    
Alaska  Railroad  Corporation  of   $1.6  million  had  been                                                                    
removed.  She  said that  the  Emergency  Repair of  Eklutna                                                                    
Overpass request  of $344,500,  had been removed.  She noted                                                                    
additional changes in the section;  Page 24, line 12, Alaska                                                                    
Industrial   Development   and  Export   Authority   (AIDEA)                                                                    
dividends would be used to  fund the $1,600,000 for the Nome                                                                    
Arctic Deep Draft Port Design.  She pointed to Page 24, line                                                                    
23,  and  noted that  $32,500,000  had  been added  for  the                                                                    
Anchorage Legislative  Information Office Building  and Land                                                                    
Purchase; she  noted that UGF  funds would be used  from the                                                                    
Alaska Capital Income  Fund. She said that  Page 25, section                                                                    
5, listed the funding by  agency for the appropriations made                                                                    
in the  previous section.  She noted  that Section  6 listed                                                                    
the  statewide  funding  for   the  appropriations  made  in                                                                    
Section  4;  $2,684,000  in UGF,  $32,500,000  in  DGF.  She                                                                    
stated that  Section 7, pages  27 through 29,  contained the                                                                    
supplemental operating  items proposed by the  governor. She                                                                    
listed the  items that  had been  removed from  the section.                                                                    
She  revealed  that $450,000  for  a  state licensing  audit                                                                    
increase had  been removed. She explained  that the Division                                                                    
of Legislative  Audit was  set to lapse  some funds  and had                                                                    
agreed  to absorb  the cost  of the  increase for  FY17. She                                                                    
furthered that  the following items  were removed  under the                                                                    
Department  of  Health  and Social  Services:  $520,000  for                                                                    
McLaughlin Youth Center  Juvenile Justice Facility Staffing;                                                                    
$75,000  for the  Kenai  Peninsula  Youth Facility  Juvenile                                                                    
Justice Facility Staffing; $105,000  for Nome Youth Facility                                                                    
Juvenile  Justice Staffing;  $300,000  for Juvenile  Justice                                                                    
Health Care.                                                                                                                    
2:35:00 PM                                                                                                                    
Ms. Cramer  looked at  Section 8, pages  30 through  31. She                                                                    
noted that during the process  of considering the governor's                                                                    
supplemental requests for capital  and operating items, both                                                                    
bodies  were working  together,  and  that the  conversation                                                                    
continued  to evolve.  She said  that Section  8 listed  the                                                                    
funding  by agency  for the  appropriations  made under  the                                                                    
previous  section.  She  stated  that  Section  9  reflected                                                                    
statewide funding for the appropriations  made in Section 7;                                                                    
the UGF total for that  section was $52,580,500. She relayed                                                                    
that  Section   10  began  the   language  section   of  the                                                                    
legislation.  She shared  that  the section  began with  the                                                                    
Department  of  Law,  judgements and  settlements,  for  the                                                                    
amount of  $2,388,534. She noted  that Section  11 contained                                                                    
the ratification of certain  expenditures for the Department                                                                    
of Natural Resources  for fire suppression in  the amount of                                                                    
$48,849,516.  She  continued  to Section  12,  which  listed                                                                    
federal and  other program receipts and  allowed agencies to                                                                    
receive authorization  of federal  funds from  the Committee                                                                    
of Legislative Budget  and Audit. She noted  that Section 13                                                                    
contained insurance  claims and allowed agencies  to collect                                                                    
insurance settlements  and to make repairs.  She stated that                                                                    
Section  14 was  related to  the National  Petroleum Reserve                                                                    
Alaska  Impact   Grant  Program.  The  section   listed  the                                                                    
projects  under the  program. She  continued to  Section 15,                                                                    
which  contained  the  Department  of  Administration  labor                                                                    
contracts   negotiations   and   arbitrations   support   of                                                                    
$792,000. She  turned to Section  16(a), which  pertained to                                                                    
the   Department  of   Commerce,  Community,   and  Economic                                                                    
Development, the  sum of $80,000  was a  reoccurring payment                                                                    
for  the Life  Alaska Donor  Services; Section  16(b) listed                                                                    
the  reappropriation   from  the  Alaska   Energy  Authority                                                                    
British  Columbia intertie  and energy  plan implementation.                                                                    
She continued to Section 17(a)  which took a reappropriation                                                                    
for the  Goose Creek Correctional Center  start-up furniture                                                                    
and equipment and redirected it  to the electrical arc flash                                                                    
assessment  and  remediation  required by  the  Occupational                                                                    
Safety  and Health  Administration.  She  said that  Section                                                                    
17(b)  would appropriate  $1,250,000  from  the alcohol  and                                                                    
other  drug  abuse  treatment and  prevention  fund  to  the                                                                    
Department   of  Corrections   for  changes   to  the   time                                                                    
accounting  module   of  the  Alaska   Corrections  Offender                                                                    
Management  System   and  Victim   Information  Notification                                                                    
System to  accommodate new parole and  probation incentives.                                                                    
She  stated  that Section  18  appropriated  $500,000 for  a                                                                    
temporary  position, or  contract, relating  to the  federal                                                                    
Every Student Succeeds Act. She  turned to Section 19, which                                                                    
listed  reappropriations  of   Department  of  Environmental                                                                    
Conservation water  and wastewater  infrastructure projects,                                                                    
the  projects  were listed  for  Haines,  Sitka, Kenai,  and                                                                    
Ketchikan. She  noted the reappropriation to  the Department                                                                    
of  Public  Safety  on  Page 40,  line11,  section  20,  for                                                                    
aircraft  and vessel  repair and  maintenance, and  deferred                                                                    
2:40:46 PM                                                                                                                    
Ms. Cramer  looked at  Section 41, page  40, line  25, which                                                                    
contained  reappropriations in  the  Department of  Revenue.                                                                    
She  noted the  reappropriation to  AHFC for  senior citizen                                                                    
housing  at  a  total  of  $1,750,000;  $6,600,000  for  the                                                                    
weatherization  program;  and  $774,171 for  the  NSTAR  re-                                                                    
platforming project.  She noted  that the project  was fully                                                                    
funded. She turned to Section  22, page 41, lines 18 through                                                                    
29;  reappropriation for  the  Department of  Transportation                                                                    
and  Public  Facilities  (DOT&PF) funds  for  the  municipal                                                                    
harbor  facility  grant  fund  of  $4,442,000,  which  would                                                                    
provide  grant  funding  for  Kodiak,  Alagnak,  and  Juneau                                                                    
harbors. Additionally,  the section  listed reappropriations                                                                    
to  DOT&PF  totaling  $20,500,000 for  the  federal  highway                                                                    
match. She  turned to  Page 47, section  23, line  15, which                                                                    
contained the  request from the  Office of the  Governor for                                                                    
the reappropriation  to advance state  government efficiency                                                                    
efforts; the  committee had added the  current structure and                                                                    
focus of AHFC, AEA, and AIDEA;  the amount was not to exceed                                                                    
$850,000.  She   relayed  that  Section  24   contained  the                                                                    
appropriations for  the Legislature; $1.5 million  was being                                                                    
expended  specifically  for  Capitol  complex  security  and                                                                    
renovations, and the  remainder would be used  for repair of                                                                    
technology  improvements to,  and  other necessary  projects                                                                    
related  to   legislative  buildings  and   facilities.  She                                                                    
relayed that Section  25 contained the fund  transfer of the                                                                    
large passenger  vessel gaming and  gambling tax  account to                                                                    
the Alaska  capitol income  fund, estimated  at $15,721,000.                                                                    
She  continued to  Section 26,  which contained  the project                                                                    
lapse provision.  She concluded  with the final  sections of                                                                    
the   bill  related   to  retroactivity,   contingency,  and                                                                    
effective dates.                                                                                                                
2:45:03 PM                                                                                                                    
Ms.  Cramer  noted  that  the  total  capital  specific  was                                                                    
$79,747,100 in  UGF funds; $29,455,900 in  DGF; $107,643,300                                                                    
in other funds;  and $1,312,231,400 in federal  funds, for a                                                                    
total Capital  Budget of $1,529,077,600. She  added that the                                                                    
total  capital  spend,   including  operating,  capital  and                                                                    
supplemental, was  $1,627,919,600. She  said that  the total                                                                    
capital  reduction,  including operating  and  supplemental,                                                                    
was $92 million.                                                                                                                
2:46:17 PM                                                                                                                    
Co-Chair  MacKinnon asked  whether the  FY17 Capital  Budget                                                                    
was less than in FY16.                                                                                                          
Ms.  Cramer replied  that FY17  capital  spending was  lower                                                                    
than the previous year.                                                                                                         
2:47:40 PM                                                                                                                    
AT EASE                                                                                                                         
2:47:45 PM                                                                                                                    
2:47:47 PM                                                                                                                    
Co-Chair MacKinnon  WITHDREW her  OBJECTION. There  being NO                                                                    
OBJECTION, the proposed committee substitute was adopted.                                                                       
Co-Chair MacKinnon  stated that  amendments were due  at 5pm                                                                    
the  following  day. She  reminded  the  committee that  the                                                                    
state  was  facing  a $4.1  billion  budget  shortfall.  She                                                                    
discussed housekeeping.                                                                                                         
2:50:22 PM                                                                                                                    
AT EASE                                                                                                                         
2:50:50 PM                                                                                                                    
Senator Olson  expressed concern  over the removal  of funds                                                                    
from the Capital Budget for the school in Kivalina.                                                                             
2:51:17 PM                                                                                                                    
Co-Chair  MacKinnon said  that  she was  sympathetic to  the                                                                    
request for funds. She reiterated  that the state was facing                                                                    
an economic crisis.                                                                                                             
2:52:35 PM                                                                                                                    
Vice-Chair  Miccich recognized  Co-Chair  MacKinnon and  her                                                                    
staff for their work on the Capital Budget.                                                                                     
2:53:08 PM                                                                                                                    
Co-Chair MacKinnon said that the  bill proposed $1.5 billion                                                                    
in spending on capital projects.                                                                                                
SB  138  was  HEARD  and   HELD  in  committee  for  further                                                                    

Document Name Date/Time Subjects
SB 200 CS SB 200(FIN) ver H.pdf SFIN 4/11/2016 2:00:00 PM
SB 200
SB 138 work draft version E.pdf SFIN 4/11/2016 2:00:00 PM
SB 138
SB 210 LFD Backup spreadsheet.pdf SFIN 4/11/2016 2:00:00 PM
SB 210