Good afternoon. Thank you for being here. I'd like to call the first meeting of the House Finance Department of Commerce
Community and Economic Development Subcommittee to order. It is now 1203
Thursday February 5th in the Grunberg room at 120 and
I would like comment that this is our first subcommittee meeting
the year and so it does not surprise me that some members will be coming in later.
They're used to this being their lunchtime. However, we do have some
members present. We have co-chair Kai Holland, co chair Donna Meers, and then we also have
representative at the Deus, representative Bynum from the finance committee. Thank you for
let the record reflect that we can proceed without a quorum for this presentation.
So I'd ask all of you to please take the moment to silence your phones if you're in the room.
And I also want to thank Doug Bridges.
Thank you from the Juneau LAO for moderating the committee today.
Thank to the subcommittee aide David Jang.
And the sub committee members have binders.
and they look pretty thick, but they're important because they include the Department of Commerce
Community and Economic Development budget and these documents along with today's presentation
can be found on basis. Before we get started, I want to remind everyone that the purpose of this
finance subcommittee as is the same for all subcommittees in the building is to take a
close first look at the governor's budget,
department by department, to better understand
how our public dollars are serving Alaskans.
Furthermore, according to the Executive Budget Act,
it is up to legislature to define the mission
of the departments and put forth measurable goals
and then check in on how those measurable
goals are moving along.
The subcommittee members have binders with information
specific to The Department of Commerce,
these documents again along with the others are in basis as well.
So we are going to begin our presentation.
I know that other members will be able to find this online as
well if they'd like to have a look later. I'm sure they will.
So I would like welcome and hear from the department of the
Deputy Commissioner of the Department of Commerce, Community and Economic Development, Anna Latham. Thank you.
And Hannah Lager, also the Administrative Services Director, the Commissioner
of The Department. The Commissioner Sandy is online. Let's see, we do have her here to just confirm that.
Thank You so much for being here, Commissioner. And today the DCCED will be presenting a budget
Deputy Commissioner Latham and Director Lager,
please come forward, put yourself on the record
and begin your presentation.
One moment, please.
Thank you so much.
This is Commissioner Sandy.
I appreciate you very much, Chair.
I've been asked to be in Anchorage today.
So my apologies for being on this phone.
It's unusual for me and always very proud
to represent our department in person.
And while they're getting seated.
If I could just say for the record, my name is Julie Sandy and I'm the commissioner for
the Department of Commerce and give a very brief introduction and then have them take
it from there.
If that's okay with you?
Yes.
Thank you, Commissioner.
Please proceed.
Great.
For the Record, My name's Julie Sandie, commissioner, for The Department Of Commerce.
In the room, we have Annalisa, our Deputy Commissioner, Hannah Longer, Our Administrative
when to win our budget analyst. I appreciate you having me online today and again I'm attending
corporation board meetings today, and I am just taking a very quick break,
and i'll just do the introduction and hand it off to our team. The Department of Commerce,
our mission is to promote a healthy economy, strong communities and to protect consumers in Alaska.
the members of our team do that every day, and we do
that through both of the corporate agencies and then our
seven core entities, all of which are then supported by the
executive team. And very briefly, most of you have seen this
before. It shows our organizational chart, including
our core divisions in gray and our corporations and quasi
corporations in teal.
And again, I'm just so proud of
our experienced team of directors,
And since I saw some of you last time,
we have three newly appointed directors
who agreed to step in as their predecessor
either retired or took promotional opportunities
and moved on.
Those three new directors are Tracy Reno in banking
and securities, Andy McCauley in the division of investment,
and Heather Carpenter in a division
of insurance.
Between the three of them, they bring 49 years
of cumulative state of Alaska experience.
and 39 years of department experience, we are very fortunate to have their expertise on our
leadership team, so you'll be hearing more from them throughout this legislative session.
We are also welcome, former Representative Tom McKay, our newest commissioner at the Alaska
Oil and Gas Conservation Commission. We're excited to
have Commissioner McKay's experience as a petroleum engineer and as the legislator to add to the AOGCC
One note, as the presentation continues, we've included the Alaska Griller Corporation on this slide because they are part of our overall organization.
However,
as we presented before, they're not subject to the executive budget act and so are not included in the rest of the
presentation.
I just want to call that out for folks that haven't heard our presentation before.
So with that, I'm going to hand it over now to Hannah,
Thank you very much, Commissioner.
I appreciate your introduction.
Welcome to the new members of your team.
And I look forward to hearing more about how you all intend
to meet the mission that you stated.
It sounds like a very honorable mission
and important to Alaska.
So thank you and please proceed.
Excellent. Thank You for the record.
My name is Hannah Lager.
I'm the Administrative Services Director
for The Department of Commerce, Community
and Economic Development.
The department's fiscal year 2027 budget requests totals 242 million, which is shown
on this slide, in just a couple of different ways.
Of the department, total budget, just that small blue stripe or the blue sliver, depending
on which chart you're looking at, is unrestricted general funds.
In our 20 27 budget our request overall is down 4.6 million and down 5.8 million in
the general fund.
And the large dark gray we're going to talk about our divisions and their funding and as you just saw there are a lot of them
What you'll notice throughout is that most of the department is self-supported through
Earned receipts whether those are regulatory cost charges fees assessments or earnings on investments
This slide also has a lotta data
I just want to hit on a couple of items
So this shows management plan from 2019 through the current year proposed governor in 27
So it really shows the changes over time in the departments budget and what?
I like to note on this is again that blue bar you can see generally we're pretty low in general fun
We've had a couple of increases and then we were trending back downward
But also those big gray bars and even the changes in the yellow
We have a lot of different programs that run through the department over the years if we look back
There's one that legislative finance puts out that's a little bit like a spaghetti bowl because there's so many lines for different
Programs that show up on there
So we are going to go through each of those divisions and their funding
But just want to kind of show that we do house a lotta different
Programs and that those can change year to year
Again, as just some brief perspective as we look at the department, I mentioned we have
very little general fund in the grand scheme of the state budget.
We are at bottom end of that chart.
However, we just looked at number of independent divisions we
have and here we can see we also have the highest number
of funding sources and that is actually the most
already used or result delivery units of any agency in
the State.
So we're pretty small.
We don't use very much general fun, but we are kind of remarkably complex.
We have a lot of different programs within the
department.
Sorry one too far before we go into the individual division slides
I do want to mention that as I said, we're primarily funded by general funds designated general fund and licensing receipts
And in addition to what we use to fund our programs
We also collect more than we need every year and so in fiscal year 2025 we put a hundred and thirty three million into
The general fun so that's on top of paying for our operations. We are one of the larger contributors to the general
And now we will start running through our individual divisions.
So we'll start with the commissioner's office.
There aren't any significant budget changes shown
in fiscal year 2027.
I do want to just point out one thing
that you'll see throughout this presentation.
And that is there are salary adjustments
and health related adjustments
that are contractually negotiated
or statutory related.
Thank you.
And I brief pause if I may.
I want make sure to acknowledge
that representative Johnson is joining us.
Thank for being here.
Please proceed.
Excellent.
Thank you.
So this is a great slide to be able to see that, you know, there will be slight variations
in the numbers year to year as we include those contractually negotiated or statutorily
required items.
Let's see, our commissioner's office is responsible for leadership of the agency, but I also
want to point out that boards and commissions slot in upper right hand corner.
As commissioner Sandy mentioned, today she's at a board meeting.
In addition to the number of boards housed in
Of which we have more than 20 in our division of corporations business and professional licensing
We also serve on 23 boards 11 of which the commissioner sits on directly
So there is a lot of board activity and again for context to the conversation. We have a broad range of responsibilities
Thank you and a brief pause again. I want to make sure to acknowledge that representative Castello has joined us
Thank You for being here
Please proceed
Thank
In the administrative services component, we have a few changes proposed.
We have primarily centralized information technology services in the department, so the bulk of the changes related to implementation of that IT classification study are in
the Administrative Services component.
We're also transferring into positions from the Department of Administration for travel
and expense processing.
That's also a centralized service we provide that we're going to roll into our admin services
going forward.
And lastly, we are adding some interagency receipts to support our help desk operations
and budget just to line up our budget with what we need, make sure we adequately staff
moving forward
In the broadband office, I'm very happy to say that our grant list is in final review with our federal partner
So we are getting even closer to getting those grants out the door and moving
Which is just a really exciting thing as we've all been working on this for a number of years
We're very very heavy about that the one change that we have in the Broadband office is not really a change
It's restoring a prior year temporary item that's scheduled to go through 27
So this is technical, but it does look like a remove and an add in that budget
that
that temporary item is through 2027 currently we do anticipate this office
going through at least fiscal year 2020 or 2030 which is when the grant program
is scheduled to end again given the scope of this grant on the federal level
wouldn't be surprised if that timeline moves a little bit over time plus we
know that there will be some monitoring of grants
after the implementation period
yeah i think
Thank you for the ask. Thank You for pausing. I we can it looks like at this rate
We can take a few questions right here. So we'll just pause I've got a couple in the queue
So if we may representative Johnson, please
Thank you through the chair representative Johnson. I agree. It is a very exciting thing
We do think that's gonna happen in this fiscal year
So optimistic that it's going to be before the end of the fiscal you may be right at the beginning of next fiscal
Year, it just depends on when the federal partner approves those grants
Thank You and for the for that record.
I didn't hear the question it was it a deep ass deeper asking to the timeline of when we're going
to see those
grants put through or I apologize to miss that
Madam Chair, the question was when did they expect to see an actual, any kind of dispensment
on a project for a broadband project?
Thank you.
I appreciate that.
Hearing a little more detail on that, I also wrote on my notes that you said close to,
but that didn't help us to know if it was this year or in the following year and it sounds
the timing, kind of come to fruition in terms of the
next fiscal year.
Really, yeah.
The next Fiscal Year.
Yep.
Yes.
Yes, to the Chair.
I believe it's going to be this calendar year, but where that lands through the summer
and the change in the Fiscal year I think is still.
Thank you.
Thanks for the clarification and question.
A representative Costello.
Thank You very much.
I have two questions.
One is about the travel and expense.
seeing the most travel that is necessitating you bringing these two positions over?
Yeah, thank you.
Through the Chair, Representative Costello, we certainly do have travel throughout many of our divisions.
This change is related to changes in the statewide structure for shared services of Alaska.
And that that division is decentralizing, essentially, in shifting those responsibilities
for actually finishing out the travel processing back to the departments.
Okay, Thank you, and another question.
Thank You.
So I worked on the broadband legislation and the other body when it came through and it's my
understanding that there are meetings. I'm wondering if they are public and does the office actually go
away after the projects are let and then can we get a list of what projects and grants are out
there once they're decided? For the record my name is Anna Latham, I am the deputy commissioner
representative Costello.
The final meetings between the NTIA and the broadband office
are occurring in February.
And those projects will be publicly released
once the NTIA approves them.
Thank you.
Thank You.
And we have now been joined by representative Ruffridge.
Thank for being here.
And please proceed to the next slide, slide 13.
Excellent. Thank you. This is Hannah Lager again. So moving on to our Division of Community and Regional Affairs.
They provide training and technical assistance to local governments.
They help communities with land management and planning.
They have the state assessor's office.
They're, they have a lot of responsibilities even just in this division.
And in the 2027 budget, there are a couple of changes, both of which relate
to federal disaster relief programs which we see in a capital budget.
So we've seen a number of those come through through our community development,
block grant disaster recovery plans.
grants and through that process we really recognize that those federal awards require
higher staffing load than we had previously assigned to them. They have a number of different
requirements, a lot of public involvement in making sure that these are going out to actually
meet community needs and we needed more staff for those. So we are adding capital improvement
project receipts which allows us to pay from that capital project as well as two positions for that
into community and regional affairs to support grants management and program management for those federal awards.
The other changes on here are fund capitalizations, which we just included.
I know they're in language, so they are a little outside the scope, but they
are something that's related to community regional
affairs. One of those is capitalizing the Civil Legal Services Fund for a grant to Alaska Legal
Services Corporation, and we do have a list of the grants that we're going to go over in just a
couple of slides. And then also capitalising the community assistance fund for distribution
Thank you. I do have a question on this particular item.
I see that we're building in important positions of three full-time positions
Adding to the operating budget and you were referring to using a fund source
I believe from the capital budget in order to pay for that
It's pretty
unusual but also not unheard of. So if you would share a bit more about that and if they are
permanent full time typically when I hear permanent
full-time I think UGF so if
you could help expand upon that just a
bit for us I'd appreciate it.
Yes absolutely to the chair. So currently we have three of these disaster recovery grants
in our capital structure. You'll see in the supplemental budget there's a request to add
authority for another one in a current year as well as in governor's capital budget. There's
a requests for one on the capital. This is a continuing federal program that we continue to get.
We would love it if there were not disasters and we didn't have to do that work and in that case
we would end the positions but at this point we've gotten three awards so far for four disasters.
we anticipate additional things happen in Alaska.
And so we do anticipate that's going to be a continuing need.
And, so that is part of initially when we started setting them up a few years ago when
we got the first one we looked at doing temporary positions, but we're really recognizing that
we think this is an ongoing need for the state and then that federal funding will continue
to come in.
Yes, to the chair, that is a great question.
I would say there is some flexibility in the end states
of those, and they are definitely longer term projects.
One of the capital awards we have out there still related
to 2018 earthquake in Anchorage.
And so the activity is really afterwards.
It's helping communities plan for resiliency, make sure
that I think we're doing a seismic study for a condo association
related to that federal award, things like that that help make
sure that if something happens again,
it doesn't impact those communities in that same way.
longer term, like I said, we're still working on one from a 2018 award, and they tend to
come in a year or two after the award. So that 2018 Award,
we didn't get until 2020 and then we start the work from there.
Thank you. And I believe we have two in the queue of representative Costello. No, okay,
then,
we
have representative Johnson followed by co-chair Mears. Thank
you, Madam Chair.
So I guess my question would be, I do have some concern in
out, you know, Merbock and the storm we had this year and so on, but is there anything
that would trigger a reevaluation of these positions given that,
you Know, we don't necessarily have that disaster money coming in?
Through the chair, Representative Johnson, I would say absolutely if we
don t have the funding for them, then we can t afford to pay for
them if the federal funding isn t there. And so we would absolutely reevaluate
Follow-up representative Johnson. I just want everybody to remember that who's in the future
We as you're looking at the budget, but the second thing I would say is that
Do you have vacant positions in your department already that are in in that general the area that?
You know, you could maybe eliminate and as
As you add these
Thank you through the chair representative Johnson
We did do that for one of these we transferred in a position from the division of corporations business and professional licensing that was vacant that they determined
They didn't need anymore to support these disaster recovery programs
You know, I think all of our programs do experience vacancies and certainly in community and regional affairs. We have absolutely struggled
with especially rural staffing for some of those offices
and local government specialists,
but the decision on whether to, you know,
it's a harder decision to reclassify a position, say,
from a rural community and say we're going to send it
to Anchorage and do this work.
So we have evaluated that and we continue to look
at those vacant positions, but at this time,
we don't have positions available in the division
to do that with.
Just one more follow-up, please, from representative.
Thank you, thank you Madam Chair.
Well, I guess I would just encourage you
rural area maybe, but to take a close look at your positions, since if you're adding
to it, if your adding these two that you don't leave others, it could be, could
be taken off the books. Thank you. Representative Johnson,
Thank you through chair also thank you representative Johnson for bringing up
disaster relief that is certainly upfront for a lot of us this session. I would
like a little broader picture of the communities this is fun it's my
understanding that there's a maximum of 90 million dollars capitalization a third
of whatever is in that fun gets distributed to communities on a formula
So we've got $14 million water fallover flow from PCE.
Where's our current capitalization
and what are we looking at
to the distribution of communities this year?
Absolutely, thank you.
Through the Chair, Representative Mears,
the Distribution that's projected
for the beginning of fiscal year 2027 is currently 20 million.
And that is from a capital that that
is form a
capitalization of the fund from the following year. So the 14 million that we're requesting
in the budget goes into the Fund in fiscal year 2027 and I think I actually missed
say to this earlier it was actually be distributed at the beginning of fiscal
year twenty twenty eight but otherwise your description of how the funds works was very
accurate. We take the fun balance as of June 30th which is why sometimes depending on when
you look you'll see items in either the supplemental budget or in
the future year budget just depending upon when how we need to set that calculation.
It's so June 30th, we take the fund balance,
we divide it by three and then yes,
we run it through a formula that's based on statute
to calculate those distributions.
follow-up my co-chair mirrors
Thank you. So the maximum through the chair of the maxima distribution distribution is 30 million dollars
Based off the off of that. We were looking at a 20 million dollar
Distribution from this year an option available to the legislature for the full distribution amount would to have a ten million
Dollar allocation towards that for this here or this upcoming fiscal year
Yes, through the chair representative mirrors there are a couple of different ways the legislature has handled this historically there have been both you could opt to put three times the amount you would like to be distributed into the fund in the year before the calculation is completed right so effective June 30th.
or some legislators have chosen to do an additional distribution outside the fund following the
same formula in the year that the distribution actually happens on July 1st. So either approach
could work. As I said, there is 20 million that's planned to be distributed at the beginning of
fiscal year 2027. And I was remiss. I didn't mention this capitalization that we're requesting
Thanks for that clarification and appreciate it and I'm for the committee
I just want to make sure for your awareness that we now are about halfway through
I am going to ask us to pause questions until we get all the way to the end
Because we have a hard stop at 1255
Please proceed. Excellent. Thank you
The Division of Community and Regional Affairs also manages the Servilaska component which focuses on volunteerism
As well as the revenue sharing results delivery unit that houses our payment in lieu of taxes our national forest receipts and our shared fisheries taxes appropriations
There's no significant changes in either section
As I mentioned, this division administers a large portfolio of grants.
That QR code will take you to their dashboards so you can see any grants that are currently
out there.
This is also the division that is functionally going to handle our broadband grants, so broadband
is going award them and then community regional affairs will handle the nuts and bolts of
the actual grant agreements.
Most of the grants that this division administers
are included in the capital budget,
but if you are include in operating budget
I wanted to make sure I include those in
the slides because they are kind of buried
in a grants line and that's always something
that there is interesting.
So in 2027 these grants total just about 1.6 million
of DC areas total budget and about 800,000
of general funds in division.
moving on to our division of corporations, business and professional licensing.
So they manage the administration and enforcement of 45 different professional
licensing programs including 21 regulatory boards as well as business
licensing and corporate registrations. The highlight I would have here really
is our professional
licensing activities continue to grow. This is an incredibly complex division and
they are pumping out a lot of work and that licensing portfolio just continues
to increase year over year.
we did see you can see the blue line there for business licensing. It went up a little bit as we
suspended fees through the pandemic and I think we're getting back to just about a normalized almost
a straight line if we were to exclude that section of increase there. In 2027 we have a number of
First, we're deleting two non-permanent positions.
We had these focused on scanning work in the division,
and we've really made great strides
towards digitization and electronic files there,
which we were very excited about.
We're also deleting, or we are transferring
that vacant position that we referenced
over to community and regional affairs.
That's the second line on there.
We are also adding $250,000 to align
the business licensing and corporations' receipts
with their projected expenditures.
In fiscal year 2025,
we ended the year with just a 2%.
underspend, which is just a little bit too close really for
operationally managing throughout the year that requires kind of an
outsized level of administrative effort to manage to that close of a margin.
So we're not talking about program changes. We're really just making sure
that we can continue as just about everywhere is seeing cost pressures.
We are also adding $250,000 of interagency receipts,
which aligns the budget with reimbursable services agreements that
we expect to get from some of our other state agency partners.
We are proposing to replace professional licensing receipts currently used for investigations
with receipts from business licensing and corporations collections.
So, under our current licensing structure, the cost of investigations are charged back
to the profession that that investigation was related to.
But that results in our.
Great compliant licensees being charged for what may be the bad activity of someone else in their profession
And that really those investigations are a public purpose benefit
I know me as an individual I care that my license professional is licensed, but someone
Else in there industry that's actually not their responsibility to pay for investigations related to that
So
Really the change reflects it. It's a public protection expense and we're using business licensing and corporations receipts
Which are certainly collected from a broader base many of these professional licensees also have business licenses
As well as just other businesses benefit from having licensed professionals and
We do have excess receipts in that funding source. We currently we lapse just about 11 million into the general fund last year
From that receipt source, so using receipts that we collect to more appropriately fund investigations activity
And then the last item on here is just related to that information technology classification
study.
We do have three divisions that don't have any significant budget changes, but I did
want to make sure that I included them on her.
That's banking and securities, insurance, and investments.
What I would say about these divisions is, just these three put over 100 million into
the general fund last year through their activity.
So not a lot of changes going on, these are kind of the workforces of department.
Moving into our corporate offices and commissions and corporations, we're going to start with the alcohol and marijuana control office
Really no significant changes for them. Again, it's just salary changes as you can see in the bar chart
I do just want to highlight they have a diverse group of licensees, right? It's both alcohol
And marijuana, but within that there's multiple different license types
calendar year 2025 was our first full year of the title four changes in alcohol and you can kind
of see that reflected in their performance measure bar chart there where you do see a little bit
of a decline that's because we changed the number of licenses that we have right so people registered
in different places and some got combined. So really this division has been really accommodating
Yeah, they're continuing their efforts to improve times to license so that those businesses also can get up and operating
Moving on to the Alaska oil and gas conservation Commission
The only change for them is actually really a correction for a last year action where they ended their budget
the the appropriated budget for fiscal year
2026 has a negative general fund appropriation, which is a thing that
Doesn't typically happen happened through a series of amendments
that we ended up in the negative.
So this does look like a positive to the division,
but it actually really just resets them to zero.
There were two amendments last year
that got a double counted about 40,000.
Onto the regulatory commission of Alaska.
The only change in here is
that information technology classification study.
They do have a couple of IT staff on their team.
On the Alaska Gas Line Development Corporation,
the only significant changes continuing their budget
So, this is, we're showing from the general fund that's the same amount as last year.
It just was appropriated as a temporary increment.
So we have to remove it and add it back again.
Moving on to the Alaska Energy Authority.
I just wanted to touch very briefly on this.
We had a slide similar to this last-year,
and what you will notice is there is one more component here than there was last
year, and that is for the Rail Belt Transmission Organization.
That activity, when it was appropriated last year,
was in the Rural Energy Assistance component,
and you'll see that in a 27-budget,
we're moving that over so we can track those costs separately.
And we are going to hold, pause our questions,
but I do have two in Q just to make you aware of that.
And now we have four in The Q.
Excellent.
I just asked her to repeat what she just said.
It's not really a question.
Absolutely.
So if you would, please repeat that previous you're
from this slide.
If you could please, repeat your comments
about that issue of the real about the rail belt.
Absolutely.
Thank you.
In the Alaska Energy Authority, the rail belt transmission organization is a new component.
Last year, when activity was appropriated for those activities, we put that in the rural
energy assistance component, but you'll see in 27-budget we moved that out of rural energy
assistance and into its own component so that we can track that organization's costs separately.
Okay, so this slide 25 does show the Alaska Energy Authority all of those changes.
Again, they have multiple components.
We've included the abbreviation there on the left-hand side of the table.
So the first three relate to that rail belt transmission organization.
The first two are moving that authority over from the Rural Energy Assistance component
into the Rail Belt Transmission Organization.
And then you'll also see that there is a fiscal note related change.
had general funds in the first two years,
and then interagency receipts following that,
or sorry, Alaska Energy Authority receipts,
following the expectation that there would be a tariff setup
and collected and received to fund the organization.
That work is absolutely ongoing,
but you'll see the third item on there is,
they actually need some additional funding in 2027
because it's ongoing but it not done yet.
So we do think they're scheduled to go
in front of the Regulatory Commission of Alaska
two weeks and then that trial is going to last for three weeks or that that commission
activity is gonna last about three week's. And so we think that the tariff is
gonna be available soon but not there soon enough to fund the full activity in 2027.
So what you'll see is we have both funding sources proposed in 27. We have a rail belt energy fund
using an existing fund balance to find the costs of the RTO through 27 but we've also held on to
The next item for the Rural Energy Assistance component, which I guess is the second lineup
from the bottom, is Continuing Data Library Support for...
Alaska Energy Authority.
So they have a data library, they
have just a ton of information that they
studies analysis of projects in different areas
that have collected over the years
and that really has been in hard copy files
that you could get at the agency if you popped by,
but wasn't really available online.
And so they've undertaken a large digitization effort.
And they're been working on making sure
that that data is available for Alaskans
that can access information on projects.
So, they're funding this from a capital appropriation for the statewide energy plan.
They have some funds available from that, and so we're going to use those for that operating
type activity.
So you'll see that in here as capital improvement program receipts.
The last item on here relates to power cost equalization,
and this, I think, is really a cleanup item for us.
And I apologize, there is a typo.
Well, no, that is correct, but we should have flagged this a little bit differently as language
and numbers.
The power cost equalization appropriation is typically made in language, and so it shows
an amount in there.
And that's been historically confusing, I think, for people because it doesn't show
the distribution amount.
It showed the distributed amount plus some administrative costs.
And so what we're doing is we are saying, let's move those administrative cost into
the numbers section, the section that shows in the subcommittee books,
and we'll leave just the distribution amount
in that language section.
So it's very clear what the estimate is to go out and what actually it costs to run
that program.
Thank you, please proceed. Thank You. I know that was a lot
In the Alaska Industrial Development and Export Authority, there is just one change that ends up as a net zero for the component in
Fiscal Year 2025. We separated the Alaskan Energy Authority and Alaska industrial development and export authority staff
The Alaska Energy authority was allowed by statute to have their own
So we move those out and since that process we've been going through their
Appropriated funding and making sure that it really lines up with where they expect to see costs going forward as those organizations are separated
So as I said, this is a net zero.
It's just realigning some of their funding sources
to reflect where they should be coming from.
And then we have the Alaska Seafood Marketing Institute.
It is pretty static overall in their industry collections
and their federal funds.
So not a lot of changes there.
You see there is that 5 million appropriation
in fiscal year 2026.
That actually is multi-year appropriation.
so where it shows in the budget is in last year but it is available to spend for a longer period.
We do think most of it, is going to be spent in fiscal year 2026 and that there won't be very
much to carry forward in 2027 but there may be some. I do want to recognize the ASME boards
efforts towards sustainability and their efforts to really make sure that their spend is sustainable.
The board has historically and continues to set the annual spending plan well below the
So this allows us to both conserve revenue collections and especially give and reduce revenue coming in from you know declines in the fisheries industries
We want to make sure that at the same time that as me remains nimble enough to respond to any concerns in
The fishing industry so the board pretty consistently sets their budget lower than appropriated to give them that room to
respond any changes as needed
I would also note on the slide, I just have listed the sections of ASME.
I think we talk a lot about the marketing that they do, and that is a common kind of
top topic for ASMA.
But I really appreciate that.
They also have this seafood technical section where if you go on their website, you can
see all sorts of information on nutritional information.
There's a ton of info that's useful to the fleet about how you pack different information
on packaging materials, storage options, another more technical science-based topics
useful to the industry in a different way than kind of the marketing that we typically think about that they do.
They also have a communications section and a global food aid arm, which supported sales of
173 million in calendar years 23 and 24. So actually some some pretty big
global activity. And also I just end this slide on a really high point. Asme's marketing has helped Alaska
seafood maintain its place as the number one protein brand on US restaurant menus.
So that's higher than Angus beef,
which is a very exciting thing.
That concludes our slides. Thank you for letting me run through them. I'm very happy to answer any questions
Thank You so much, and I appreciate your ending on such a high note
That said we still have a few questions in the queue
We have five and so we'll work our way through him and we do have I believe enough time to hopefully get through to all of these and also
Allow for you to expand as you wish
Let's see let's start with co-chair mirrors, please
Thank you through the chair. So I think this is going to warrant a more detailed discussion later
but AGDC it looks like from the from The Budget Book they're zeroing out their capital but raising
the operating so from us it's a plus two million but capital's getting zeroed. Just want to confirm
later time absolutely through the chair representative mirrors we are
continuing their operating costs at the same level that we had them in fiscal
year 2026 there is absolutely you can see in here there's a large gray bar that
is authority to spend from their fund we don't currently anticipate that
authority being used so it's restricted
on our end so it is you know at this point empty or hollow authority if there is more
activity going into that fund which there may be then that may
be used for operating expenses if needed but at
this points we don't anticipate that being used.
Thank you. Thanks for co-chair mirrors. Representative
Costello. Oh thank you so on page 17 it has to
do with the businesses or corporations
throughout my time in the legislature I've seen many bills go through about who
gets charged for the investigations for different licensing boards and it was
my understanding that you need a legislation for that or did you rely on
legislation to make that change are you seeking legislation thank you to the
chair representative Costello we have absolutely tried to address this multiple
different ways over the years I think there's been a shared understanding
We've had other general fund appropriations which are a great example to offset professional licensing deficits in recent years and those have been excluded from the fee calculation and so we're proposing to do that same thing in the budget where if it's paid for from another funding source, it is not part of the
the nature of the problem, but I'm just wondering where you drive the authority
to have those fees come from a different source.
And I think this might be a good time also if you agree we can have legislative finance come into
play. I'd think it would be good for us to hear that context. It's an excellent question and I
just like to have that answer in the mix. If you'd be comfortable allowing for Mr. Carpenter also to
give a little bit more context around this question. Thank you, I have two more questions.
Okay, should we, let's answer that for different topics on a different topic.
So let told on that and get an answer first or not an
answer, but more context and then if we could proceed to your next two questions,
thank you very much.
Thank you, coach, your Rob Carpenter legislative finance.
What would you like me to expand on?
So I think we're looking at the line item that includes 4.2 million, and we are talking about whether it's paying for its costs or you know what
I'd think that what we heard was does there need to be legislation to change this sort of an allocation?
And if you would like to better articulate that question Representative Costello, you're welcome to.
Thank you Madam Chair.
There's been a long-standing discussion in the legislature about how to address
fees that are associated with investigations for professional licensing boards that
investigate one of their licensees and over my time in The Legislature there's Been Proposals to have
those
investigations paid for through a separate fund or entity because there is a huge burden on
the other licensees when their fees go up to cover those costs.
And I was just surprised to hear that the department's actually made that change.
And, I'm wondering if there was legislation or where that authority was derived from
in order for them to take from a different funding source.
Specifically for professional licensing says that the program or the fees associated with professional
licensing shall cover the costs of administering the programs. That includes investigations.
So that's what's currently in statute. I'm not aware of any specific legislation to change that.
I know there's been professional
licensing. New licenses added that have have had
have had general funds put in for investigations in the fiscal notes.
And I think there's been other efforts through the budget to relieve the
investigative cost to the licensees.
This would be another way to do that.
The governor's proposal is to replace virtually all the cost of investigations
a designated general fund source which is the business license receipts which
is separate from the professional licensing receipts.
It, this action conflicts with statute as it's currently written.
It's not against the law.
You guys have the power of appropriation to appropriate the money however you see fit.
From legislative finances point of view that our concern is
be used to pay for the administrative costs of business licensing only and the excess
would lapse to the general fund and then it could be use, however you choose.
So our only concern is that this would essentially be an unrestricted general
fund appropriation to professional licensing investigations and there's another wrong
Follow-up, please represent of Costello. Thank you. It seems it seems then that we need to clean up the statute because
As I said, this was an effort made by the legislature and now it's it being handled
But we now have a conflict on the in the statutes
So we just maybe we can talk about that offline and how we address that. I think that would be a good conversation
Thank You. Do you have further question? I do
Okay, so if FID is reached in the gas line, then will the Gas Line Development Authority
need additional funding or positions?
I think we would need to check with the Gas Line Development Corporation about what that would look like for them.
I know we have additional subcommittee meetings scheduled.
I don't know that they're on the calendar yet, but I
think if you guys would like to hear from them, we'd be happy to have them here.
Thank you.
And one final question.
Yep.
Follow-up, please.
So related to the power cost equalization, can you tell us what amount is in the fund and how much has been distributed?
And then I am aware that in statute, there is a provision that allows for pursuit
projects that would reduce the cost of energy and I'm wondering if there are
any projects are being pursued in order to achieve that statutory authority.
Thank you through the chair representative Costello I believe there is right around
a billion in the fund it varies you know higher or lower depending on investment
earnings it is invested invested by the Alaska permanent fund corporation.
I am familiar with the statute that you referenced and I know that the Alaska Energy Authority
always has projects underway to reduce the cost of energy in Alaska.
I think that they may be tentatively on the schedule for the subcommittee and
I would just defer that to them at one of those future meetings because I
think they will be very excited to talk about with this project there.
Thank you and i'll follow that comment up with yes we do have we will
AEA, ADA, and digging into a few other topics that I know were of interest of members.
And so hopefully we'll be able to have deeper conversations then as well.
Please proceed.
Thank you. And this statute is in the PCE statute. It's not in
the Alaska Energy Authority. So I appreciate that opportunity.
Thank You. Thank. You and for the record that was
representative Mia Costello and now we'll move. Mia, did you have
pardon me? Representative Costello, Did you
have any further questions? Thank
Co-chair Holland and then we have Representative Bynum and we
have representative Refrage and myself Representative Galvin
in the queue so far.
You want in? Sure. Okay.
Thank you for the opportunity and to the chair.
I think a general question at the moment but I want to do some follow up on this.
I'm looking as you might expect once again at economic development
I'm looking for ATIH and the investment in our emerging industries, and I am just curious
what your thoughts are in terms of the budget at this point in term of investing in economic
diversification.
States adopted comprehensive economic development strategy.
This seems like we're continuing to kind of just keep the existing programs going
and I'm looking for how and where we could be investing in some of these new emerging areas
and if you've got any thoughts on that right now.
Thank you.
Through the Chair Representative Holland, I would say you are absolutely correct.
We are presenting a pretty status quo budget across the board.
There is not a separate line in here for economic
development at this point.
I think we really look forward to continuing those conversations with you about ways that we can support Alaska's small and emerging industries
And ways, that, we, can do that within our existing structures so I I agree with your assessment that there's nothing in there
That's fine for now okay, thank you thank, you co-chair holland and for the record I want to make sure we're aware that
We are going to have a hard stop in five minutes
Now moving to representative bynum, please thank You madam chair
I wanted to say thank you for the commissioner, Sandy,
for being on the phone.
I always appreciate it when she's here in person.
I was enjoyed getting to visit with her
after these meetings, she is from my district.
So we missed having her here today.
But thank for you being here really quick.
Under the alcohol and marijuana portion of this,
there was, we have our budget there.
I know the governor had put out a executive order looking to streamline regulations and
make things more efficient.
I think definitely in that area is one that absolutely could be streamlined and make it
better for Alaskans to have businesses that are prosperous.
I thank this as a whole.
how that department operates or that section operates,
will that impact your budget for 27, do you believe?
This is Anna Latham for the record.
Representative Bynum, through the chair,
we do not anticipate A0360 impacting our budget.
We, the Alcohol and Marijuana Control Board is currently meeting in Juneau.
They're on their third day of meetings, they're taking up administrative order.
360, They have a lot of proposals, especially the alcohol board has a
lot in new regulations, because it's a fairly new industry in the state.
However,
they plan on submitting their final plans to Department of Law by March 2nd
for any regulatory reductions, and we do not anticipate them impacting our budget.
Thank you.
And then really quick, yes or no?
Through the chair.
Representative Bynum?
Thank You, Madam Chair.
On the AEA item for digitizing, is that just old records?
Or are they digitising all the records in the department?
Thank, through the Chair Representative, BYNUM, it is both.
It is absolutely old record.
The last time I visited their office,
they were showing me rolling filing cabinets
as they emptied out and surplus, and then going forward,
they're absolutely focusing on electronic records
and making sure that those are available online.
Thank you for that question, and we will have AEA here an upcoming meeting to clarify and make sure that we understand how it
associates with our budget.
We have one more in the queue, two more on the Q, representative Ruffridge.
Thank You, Chair Galvin. Through the chair, a couple questions. First one has to do with
I believe a grant from last year that I don't see repeated again, and I do see it as a decrement,
I think, which is the Bristol-based Science and Research Institute.
Can I just get an update on where that is at and why that's out of there?
Thank you.
Through the Share Representative reference, I didn't have an up date on
where the grant is, but that was a limited time duration grant.
So it was in as one-time item,
and then it's a technical item we've removed it back out.
So it is based on how it was appropriated last year is why it
Understood and follow-up if I may follow up
I mean we have a lot of one-time items in this budget that are repeated year over year and that seemed like an option for one of them
That was being requested was there a reason to not bring it forward for this year?
Through the chair representative reference
All of the grants that we included in our community and regional affairs,
I'm just going to switch back to that tab, that
we include in
our operating budget base relate to either
life health safety activities or statutory distributions in the case of
the Arctic Winter Games Team Alaska.
So they are related to life
health, safety items and that is not one of
our traditional ones that include
in that category.
But we are pretty neutral in
the Grants that We administer.
If it's appropriated again, we will have to
Understood and one final question through the chair representative rough edge. It's a different question not a follow-up, but
New question, and then we're gonna have to have a hard stop so that may
Well, I'm okay giving up my question
But we have only one other opportunity and we want to make sure that representative john to get an opportunity
Yeah, make it short. Thank you the broadband grants. There was a there's an allocation in here for transferring
a position from ASME to the broadband grant office for administration of those grants.
Are those grads being administered? And the Alaska broadband office seems to have a number of positions
funded under CIP, but I-
just wanted an update generally on those grants and where those are going.
Yes, thank you. Through the Chair Representative Reffridge, we did transfer a position from the
Alaska Seafood Marketing Institute. We transferred that, I believe, to community and regional affairs
last year to administer grants. Those are funded by CIP receipts.
We received a capital appropriation a couple of years ago for the billion-dollar grant award,
and so then we were receiving that in operating. So we're keeping our,
we are reporting our operating activity in the operating budget, but it's funded
functionally from those capital projects. And those grands are
follow-up. Yeah, through the Share Representative
reference, those grants are in the final approval process with
our federal partner and they will be going out. We anticipate
very soon. Okay, thank you. Thank you for that clarification
representative Johnson.
Thank You going to item one. Restore associate director for
the national trade program. Can you just explain that language
there it says during the 25 session.
legislature identified several long-term vacant positions and so on and
so forth and eliminated the positions in the funding. Now it says they were
removed, now they're reconstituted, but it's a zero. It's zero because it was FY
26. Is that why is that? I mean just couldn't explain what happened there.
Absolutely. Thank you. Through the chair, Representative Johnson, in last year's budget process, a number of long-term vacant positions were deleted in the budget through the amendment process.
That position had been vacant for some time, but that was due to some really significant recruitment challenges that position staffs our international trade office, which is very involved with trade missions, visiting foreign delegations, advertising Alaska.
And so we felt it was really important to restore it and at the time that that was deleted we were
In the conversation process with a very qualified applicant and we have now brought that very
Qualified applicant on we're thrilled to have her in that role
So we did restore in the current year budget
Using budgeted authority that we already had so
We re-prioritized activities to make sure that way could maintain the international trade function
Follow-up representative Johnson, so was the position was deluded, but it
Was it did the management plan to put it back in?
I mean, I'm just trying to figure out how the position went away and then it got filled and now you're creating the
position that after the fact or how that progressed.
Yes, through the chair, Representative Johnson, it was in management plans.
So it deleted in last year's budget.
So then effectively that was a zero starting in 2026, so we created the
position at the beginning of 20 26 and filled it.
Well, I'll let us have a host of them.
I almost need a visual for that one.
I appreciate that.
I'd appreciate your questions.
I would appreciate all of you attending this meeting.
This, again, is our very first subcommittee meeting
for this particular department.
So we will have further.
questions that we will have and of course I hope that
we'll continue this conversation and for now I want to
especially thank the Deputy Commissioner Latham.
Thank you to Commissioner Sandeve to reading online.
Director Lager, thank you for presenting before the
committee today.
The next House Finance Committee for House
Finance Commerce Committee, Economic Development,
and Subcommittee will be held this Tuesday.
That's February 11th.
And again, it's going to be at lunchtime at noon from noon
to 1.
At that hearing, we will have a presentation from ADA,
or the Alaska Industrial Development and Export Authority.
I will comment that I appreciate
quite rushed. And I know that we still have continued questions. I believe we will still
have those from the department who will help us when we have other questions that may be
related to more general issues concerning that this, any of the line items, so we
will make sure that have our questions answered. We will have, I think it's three more meetings
Thank you again, and I apologize.
I think I gave you the wrong time of day.
The next meeting is actually on February, sorry,
the next wrong day, it's Tuesday, February 10th, not the 11th.
So we'll make sure we get our script a little bit tighter.
My apologies.
So it is February tenth,
and it a Tuesday.
Further down the line, we have a couple of other agencies who are mentioned today.
AEA was mentioned with some important questions, so hopefully we can get to that in those specifics.
But for now,
we're going to close this meeting.
The time is now 1 p.m.
And the House Finance Commerce Community and Economic Development Subcommittee is adjourned.