Legislature(1995 - 1996)
05/02/1995 03:36 PM STA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SSTA - 5/2/95 SB 163 APPROVE U OF A DEBT FOR STUDENT HOUSING SENATOR SHARP brings up SB 163 as the next order of business before the Senate State Affairs Committee and calls the first witness. JOSH FINK, Aide to Senator Kelly, prime sponsor of SB 163, states he will testify on SB 163 and SCR 14 at the same time, since they are on the same subject. Both pieces of legislation have been introduced to deal with the shortage of student housing in the University of Alaska system. The three campuses with serious housing shortages are Anchorage, Juneau, and Ketchikan. The University, a number of legislators, and AHFC have been working together to establish a loan agreement to meet the university's housing needs. AHFC's mission is to help meet the housing needs of persons with low to moderate income, and most students are in that group. Mr. Fink thinks this agreement will be beneficial to all parties involved. Number 467 SENATOR LEMAN asks, based on today's market rate for bonding, what subsidy the university will be receiving at 3%. Number 470 MR. FINK responds there is a spreadsheet in members' bill packets showing that information. DAN FAUSKE, Chief Executive Officer, Alaska Housing Finance Corporation, thinks the subsidy will be about $10,000,000 over the life of the bond, which will be 25 years. SENATOR LEMAN asks if this will commit the legislature to keeping AHFC as an entity for 25 years. CHAIRMAN SHARP responds that it would not do so any more than any other bond issue does. The chairman asks Mr. Fauske to give a brief outline regarding SB 163 and SCR 14. Number 492 MR. FAUSKE responds the loan would be a subsidized 3% loan, based on a 6% coupon rate on the bonds for the life of the bonds. Under this scenario, the principal of the debt would be paid by housing, food service, and other fees generated by the university. SENATOR LEMAN asks what the figure identified as $1,200,000 private gift is. MR. FINK replies that the intent is to solicit private funds. Number 513 WENDY REDMAN, Vice President, University of Alaska, states the university strongly supports student housing. SB 163 is integrally linked with SB 143, which is currently in the Senate Finance Committee. SB 143 provides for AHFC transfer agreements. AHFC has made it clear to the university that they will not be in any position to follow through on SB 163, unless AHFC's assets are protected. CHAIRMAN SHARP thinks bonding for student housing is a great possibility. He does not need to be convinced, but there are others who still need convincing. Number 537 SENATOR LEMAN informs Ms. Redman that he has been supportive of the university in the past, but when things like the Judge Greene decision and the recent student vote on the Anchorage campus happen, it causes him to question whether supporting the university is the right thing to do. If he is to continue to support the university, he would desire that those types of things not represent the university policy, or for that matter, even the bulk of the students attending the university. If that is true he would be the first to bail out and invest the money somewhere else. Number 548 MS. REDMAN responds that if Senator Leman finds a way to possibly control the courts in Alaska, she would be very interested in pursuing that with him. SENATOR RANDY PHILLIPS says the court system's budget could be cut. CHAIRMAN SHARP thinks the legislature will have to look at some of the smaller campuses, and decide if operating those campuses are cost effective. Number 566 SENATOR LEMAN makes a motion to discharge SB 163 from the Senate State Affairs Committee with individual recommendations. CHAIRMAN SHARP, hearing no objection, orders SB 163 released from committee with individual recommendations.