Legislature(1993 - 1994)
05/02/1994 01:45 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
May 2, 1994
1:45 p.m.
TAPE HFC 94-151, Side 1, #000 - end.
TAPE HFC 94-151, Side 2, #000 - end.
TAPE HFC 94-152, Side 1, #000 - end.
TAPE HFC 94-152, Side 2, #000 - 367.
CALL TO ORDER
Co-Chair Larson called the House Finance Committee to order
at 1:45 p.m.
PRESENT
Co-Chair Larson Representative Hoffman
Co-Chair MacLean Representative Martin
Vice-Chair Hanley Representative Navarre
Representative Brown Representative Parnell
Representative Foster Representative Therriault
Representative Grussendorf
ALSO PRESENT
Representative Bill Hudson; Representative Irene Nicholia;
Mike Greany, Director, Legislative Finance Division; Nancy
Slagle, Director, Division of Budget Review, Office of
Management and Budget, Office of the Governor; Mike Nizich,
Director, Division of Administrative Services, Office of the
Governor; Janet Clarke, Director, Division of Administrative
Services, Department of Health and Social Services; Guy Bell
Director of Administrative Services, Department of Commerce
and Economic Development; Edgar Blatchford Commissioner,
Department of Community and Regional Affairs; Arthur H.
Snowden, II, Administrative Director, Alaska Court System;
Nico Bus; Acting Director, Support Services Division,
Department of Natural Resources; Dave Gray, Staff,
Representative Mackie; Diane Kaaplan, President, Alaska
Public Radio Network; Virgina Stonkus, Fiscal Analyst,
Legislative Finance Division; Carol Carroll, Staff, Senator
Kerttula; Bruce Geraghty, Deputy Commissioner, Department of
Community and Regional Affairs; Wendy Redman, Vice
President, University of Alaska; Alison Elgee, Director of
Budget, University of Alaska; Linda Rexwinkle, Fiscal
Analyst, Office of Budget and Management.
SUMMARY INFORMATION
HB 455 "An Act making and amending operating and capital
appropriations and ratifying certain state
expenditures; and providing for an effective
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date."
HB 455 was HELD in Committee for further
discussion.
HB 466 "An Act authorizing the issuance of bonds by the
Alaska Housing Finance Corporation to pay for the
costs of repair and rehabilitation of student
housing facilities of the University of Alaska;
authorizing the issuance of bonds by the
University of Alaska to pay for the costs of
repair and rehabilitation of facilities of the
University of Alaska; amending powers of the
Alaska Housing Finance Corporation; amending the
definition of "public building"; relating to the
Alaska debt retirement fund; and providing for an
effective date."
HB 466 was reported out of Committee with "no
recommendation" and with three zero fiscal notes,
one by the University of Alaska, dated 3/9/94, and
one by the Office of the Governor, dated 2/11/94,
and one by the Department of Revenue, dated
2/11/94.
HOUSE BILL NO. 455
"An Act making and amending operating and capital
appropriations and ratifying certain state
expenditures; and providing for an effective date."
Co Chair MacLean observed that the majority of items are
being reappropriated from prior year's capital
appropriations to other projects. She noted that items in
the bill adhere to the following guidelines:
* 1) All district reappropriation requests from
individual legislators are "net zero".
* 2) Only unexpended, unobligated general funds from
capital projects identifiable as a specific
district project, and sponsored originally by the
legislature, are in the bill.
* 3) No reappropriation items requested by
individual legislators originally appropriated as
supplemental, loan funds or trust funds were
included in the draft.
* 4) Each district's delegation has submitted : (a)
a copy of the original appropriation and/or
amended language from which the reappropriation is
being made; (b) verification of true account
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balances; (c) justification and back-up from
local government and/or appropriate state
agencies.
Co-Chair MacLean provided members with a sectional analysis
of proposed reappropriations (Attachment 1). She reviewed
the legislation by section in order to entertain questions
from members. There were no questions on sections 1 - 4.
Representative Brown referenced section 5. She asked the
amount to be lapsed. She questioned why funds are not being
lapsed into the General Fund.
NANCY SLAGLE, DIRECTOR, DIVISION OF BUDGET REVIEW, OFFICE OF
THE GOVERNOR emphasized that funds have traditionally been
reappropriated in the Office of the Governor and
Legislature's budgets.
Representative Brown asked for clarification on the lapsed
funds in Section 6.
Ms. Slagle stated that $50.0 thousand dollars would be
extended in the Division of Budget Review, Office of the
Governor.
MIKE NIZICH, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
OFFICE OF THE GOVERNOR, addressed Representative Brown's
inquiry regarding extension of lapse funds in sections five
and six. The estimated lapse for section five is $900.0
thousand dollars. He emphasized that the roll forward will
provide funding for unexpected expenses in the Office of the
Governor.
Co-Chair MacLean reviewed sections 7 - 9. There were no
questions.
Representative Brown asked if the funds represented in
section 10 are part of the Exxon settlement money. Co-Chair
MacLean agreed that section 10 contains Exxon settlement
money.
Nancy Slagle noted that the $50.0 thousand dollar
expenditure does not required trustee approval. She
clarified that section 10 was submitted at the request of
Commissioner Sandor, Department of Environmental
Conservation.
Co-Chair MacLean noted that the grant to the Prince William
sound Aquaculture Corporation will be used for restoration
and replacement of natural resources injured and services
lost or diminished as a result of the Exxon Valdez Oil
Spill. This will be accomplished through the operation of
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hatcheries for the production of common property salmon fry
for Prince William Sound.
Representative Hanley expressed concern regarding section
11, expenditure of federal funding received for services
provided to Medicaid recipients. He reminded the committee
that an appropriation of share money was placed into a
separate account last year in this section. He noted that
$20.0 million dollars were going to Alaska Psychiatric
Institute (API) and asked for clarification of costs.
JANET CLARK, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF HEALTH AND SOCIAL SERVICES stated that the
department plans for an initial seventy two bed facility.
The department has down scaled the project to provide the
minimum of necessary beds in the first phase. The
department expects an additional request $8.0 million
dollars next fiscal year. The replacement of API has been
in the planning stage for approximately twelve years. The
department has appropriated stop-gap repairs to keep API
going. Last year the department was able to secure medicaid
one time federal funds for new construction of API.
Legislative intent was added in FY 94, requiring the
department to return to the legislature to appropriation
authority.
Representative Brown asked if it was the department's intent
to start construction before the entire amount is
appropriated for that purpose.
Ms. Clark reiterated that the original plan was scaled down
from a 114 to a 72 bed facility. The first phase will
construct patient units, kitchen and laundry facilities.
Co-Chair MacLean announced that section 11 would be left
open.
Representative Martin questioned if section 12 was a
deferred maintenance project.
Representative Grussendorf clarified that the Mt. Edgecumbe
High School gymnasium was recently closed due to asbestos.
Lapsed money from the dormitories would be used to address
the asbestos problem.
There were no questions on Section 13 - 17.
There were no questions on Sections 24 - 32
Representative Larson clarified that section 33 is at the
request of the Office of Budget and Management.
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Nancy Slagle, at the request of Representative Brown,
explained that section 35 would allow the department to
access funds that had been used as a lease deposit for the
Tokyo Office of International Trade. The funds would then
be used to acquire less expensive lease space.
Ms. Slagle clarified that an unallocated reduction was taken
to the Tokyo office in addition to the reductions made
during the budget process. She further noted that the
transaction outlined in section 35 would enable the
department to keep the office open at a lower cost.
VIRGINIA STONKUS, FISCAL ANALYST, LEGISLATIVE FINANCE
DIVISION explained that the 1995 surcharge was not put into
SB 215. This language would make the appropriation conform
to whatever enabling legislation goes into effect. In
response to a question by Representative Brown, Ms. Stonkus
clarified that sections 20 and 21 of the front section of
CSSB 370 (FIN) address the 1994 surcharge on the spill
reserve balance, depending on when the bill goes into
effect. She reiterated that section 37 addresses the 1995
surcharge account to allow for the split on the sixty forty
percentage.
Ms. Stonkus clarified that SB 215 set up the procedures for
accommodating the fund, but did not provide the mechanism to
appropriately allow for the mechanics of the transaction.
She further noted that sections 20 and 21 were recommended
by the Division of Legal Services in order to conform to the
bill.
Representative Brown asked if this was considered an
appropriation.
Ms. Stonkus explained that the FY 95 surcharge would be
considered a new appropriation.
Representative Therriault noted that funds would be
allocated to the new structure. Instead of two accounts,
there will be two accounts within one fund. The
appropriation can not be contained in SB 215, since it is
only enabling legislation.
ARTHUR SNOWDEN, ADMINISTRATIVE DIRECTOR, ALASKA COURT
SYSTEM, explained that section 38 would reappropriate funds
for a new imaging system into computer hardware and software
maintenance.
Representative Martin referred to section 39. He asked if
statewide funds were being reappropriated. Ms. Stonkus
confirmed that statewide funds are being reappropriated.
REPRESENTATIVE BILL HUDSON spoke in support of section 39.
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He noted that the Perseverance Theater job training program
offers training for individuals all over the state of
Alaska.
There were no questions regarding sections 40 - 43.
NICO BUS, DEPARTMENT OF NATURAL RESOURCES spoke in regards
to section 44. He noted that funding for the Forest
Practices Act effectiveness research project was included in
the capital budget. He stressed that the reappropriation is
needed to be fully funded.
There were no questions regarding sections 45 - 49.
Representative Hanley discussed section 50. He maintained
that the Denali southside visitor center development and
Talkeetna water and sewer projects were statewide.
Ms. Slaggle clarified that projects contained in sections 50
and 51 were identified as discretionary funds. She
explained that some water and sewer projects in Talkeetna
were identified as part of the governor's village safe water
projects. These projects were not included in sections 50
and 51.
Representative Martin echoed concern that projects contained
in sections 50 and 51 were not statewide projects.
There were no questions in regards to sections 52 and 53.
Ms. Slagle noted that section 54 was requested by the Office
of Budget and Management.
There were no questions in regards to section 55.
(Tape Change, HFC 94-151, Side 2)
EDGAR BLATCHFORD, COMMISSIONER, DEPARTMENT OF COMMUNITY AND
REGIONAL AFFAIRS spoke in support of section 56.
There were no questions in regards to sections 57 - 59.
Co-Chair Larson discussed reappropriation of carry forwards
for the Legislature contained in sections 45 - 48. He
itemized the carry forward amounts as detailed in a summary
by the Legislative Finance Division (Attachment 2).
Representative Navarre expressed concern with the amount
carried forward by the Senate.
Representative Therriault expressed concern with section 42.
He questioned if funding being reappropriated from Fairbanks
water and sewer projects was discretionary.
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Representative Hoffman expressed similar concerns in regards
to section 44.
Representative Brown noted that more than $8 million dollars
would be carried forward in the Legislature's budget. She
maintained that the funds should lapse into the General
Fund.
Representative Navarre observed that the Senate FY 95
operating budget is in excess to the amount spent in FY 94
or FY 93. He noted that the House FY 95 operating budget is
below the amount appropriated to the House in FY 94 or FY
93.
Co-Chair MacLean provided members with AMENDMENT 1 (copy on
file). She MOVED to AMEND Amendment 1, delete $320.0
thousand dollars and insert $150.0 thousand dollars. She
explained that the amendment would provide funding for
Arctic Power in the amount of $250.0 thousand dollars and
provide $150.0 thousand dollars for radio stations
throughout the state. Stations need state funding in order
to match federal grants for equipment upgrades. She noted
that the federal government will provide 3 dollars for every
1 dollar of state funding. She maintained that a lack of
state support to the Alaska Public Broadcasting Commission
could endanger the state's ability to get future federal
grants. The amendment would only fund half of the state
match requirement for each station. She noted that funding
for ANWR will remain in the governor's office.
Representative Brown questioned the $250.0 thousand dollar
grant to Arctic Power. Representative Hanley explained that
$3.0 million dollars was appropriated from the Office of the
Governor for a national ANWR educational effort. A portion
of this money is being appropriated to Arctic Power. The
amendment would also allocate a portion of this money to the
radio stations.
DIANE KAPPLAN, EXECUTIVE DIRECTOR, ALASKA PUBLIC RADIO
NETWORK explained that the projects contained in amendment 1
have been awarded or has pending federal grants for which a
local match is required.
Representative Therriault queried if stations can capture
federal funds with their existing state funds. Ms. Kapplan
observed that permission would be needed from the Alaska
Public Broadcasting Commission in order to divert operating
support to capital support.
There being NO OBJECTION, AMENDMENT 1 was amended.
Representative Brown recommended that the entire amount be
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returned to the Office of the Governor for use in promoting
ANWR. She MOVED to AMEND Amendment 1, delete $250.0
thousand dollars to Arctic Power. Co-Chair MacLean
OBJECTED. A roll call vote was taken on the MOTION.
IN FAVOR: Brown
OPPOSED: Grussendorf, Hoffman, Navarre, Foster, Hanley,
Martin, Parnell, Therriault, MacLean, Larson
The MOTION FAILED (1-10).
Co-Chair MacLean MOVED to ADOPT AMENDMENT 1 as amended.
There being NO OBJECTION, it was so ordered.
DAVE GRAY, STAFF, REPRESENTATIVE MACKIE provided members
with AMENDMENT 2 (copy on file). He explained that the
amendment would reappropriate $50.0 thousand dollars from
statewide energy and power project development to a
feasibility study of an electrical intertie between
Petersburg and Kake.
Representative Navarre wondered why the project was not
funded through the statewide energy and power project
development appropriation. Mr. Gray clarified that the
project was submitted for consideration.
Representative Hanley noted that grants are awarded on a
competitive basis or according to ranking of priority.
BRUCE GERAGHTY, DEPUTY COMMISSIONER, DEPARTMENT OF COMMUNITY
AND REGIONAL AFFAIRS explained that there is $365,288
thousand dollars remaining in the fund. He observed that
the Petersburg/Kake intertie project is on a list of
projects to be considered. He did not recommend the
reappropriation.
Representative Navarre MOVED to ADOPT AMENDMENT 2. A roll
call vote was taken on the MOTION. Representative Hanley
OBJECTED.
IN FAVOR: Brown, Grussendorf, Navarre
OPPOSED: Foster, Hanley, Martin, Parnell, Therriault, MacLe
an, Larson
Representative Hoffman was not present for the vote.
The MOTION FAILED (3-7).
Co-Chair MacLean provided members with AMENDMENT 3 (copy on
file). She explained that the amendment would reappropriate
$500.0 thousand dollars to the Alaska Marine Highway System.
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REPRESENTATIVE BILL HUDSON observed that there is an
appropriation of $4.0 million dollars in the capital budget
for the Alaska Marine Highway maintenance overhaul. He
asserted that $4.0 million dollars is insufficient to keep
the vessels running. He noted there have been past
reductions to appropriations for deferred maintenance. The
amendment would reappropriate $500.0 thousand dollars from
the Highway System Administration building to vessel
maintenance and overhaul.
Representative Navarre MOVED to ADOPT AMENDMENT 3. There
being NO OBJECTION, it was so ordered.
REPRESENTATIVE CARL MOSES provided members with AMENDMENT 4
(copy on file). He explained that the amendment
reappropriates $2.3 million dollars from the Pedro Bay
School project to other district projects. The Pedro Bay
School project was vetoed by the Governor.
Co-Chair Maclean MOVED to ADOPT AMENDMENT 4. A roll call
vote was taken on the MOTION.
IN FAVOR: Grussendorf, Hoffman, Foster, Martin, Parnell,
MacLean, Larson
OPPOSED: Brown, Navarre, Hanley, Therriault
The MOTION PASSED (7-4).
Representative Moses provided members with AMENDMENT 5 (copy
on file). Amendment 5 would expand the title. Co-Chair
MacLean MOVED to ADOPT AMENDMENT 5. There being NO
OBJECTION, it was so ordered.
REPRESENTATIVE IRENE NICHOLIA provided members with
AMENDMENT 6 (copy on file). She explained that the request
would reappropriate the balance of the Regional Boarding
School Feasibility Study to the Galena School District. The
funds would be used for planning and analysis of a regional
boarding school. She noted that when the U.S. Air Force
downsized in Galena several building were left vacant.
These buildings could be used to house a regional boarding
high school.
(Tape Change, HFC 94-152, Side 1)
Representative Therriault OBJECTED. He expressed concern
that the Department of Education study be completed prior to
the reappropriation. Co-Chair MacLean clarified that the
Department of Education does not object to the amendment.
Representative Therriault WITHDREW his OBJECTION. There
being NO OBJECTION, AMENDMENT 6 was adopted.
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AMENDMENT 7 was WITHDRAWN.
Representative Grussendorf provided members with AMENDMENT 8
(copy on file). He explained that the City of Sitka is
requesting forgiveness of the remaining interest on their
Alaska Power Authority state loan. He noted that $12
million dollars remains on the loan. The city of Sitka has
paid $3 million dollars on the principle and $6 million
dollars in interest. Discussion pursued regarding the
amortization of the loan. AMENDMENT 8 was HELD.
Representative Brown provided members with AMENDMENT 9 (copy
on file). She explained that amendment 9 would repeal a
project appropriated in 1992. She maintained that the
redesign of Fireweed Lane, Anchorage was not supported by
the community. She observed that the Spenard Community
Council has requested the repeal.
Representative Brown MOVED to ADOPT AMENDMENT 9. Co-Chair
MacLean clarified that the amendment addresses federal
authority. Funds have not been appropriated for the
project. There being NO OBJECTION, it was so ordered.
AMENDMENT 10 was HELD.
Ms. Slagle pointed out that in AMENDMENT 4, section 2 the
appropriation source "Educational Facilities Maintenance and
Construction Fund" should have been the "General Fund".
Co-Chair MacLean MOVED to AMEND Amendment 4 by deleting
"Educational Facilities Maintenance and Construction Fund"
and inserting "General Fund". There being NO OBJECTION, it
was so ordered.
Co-Chair Larson MOVED to close all sections with the
exception of sections 8, 10, 11, 42, 45, 46, 47 and 48.
There being NO OBJECTION, it was so ordered.
HB 455 was HELD in Committee for further discussion.
HOUSE BILL NO. 466
"An Act authorizing the issuance of bonds by the Alaska
Housing Finance Corporation to pay for the costs of
repair and rehabilitation of student housing facilities
of the University of Alaska; authorizing the issuance
of bonds by the University of Alaska to pay for the
costs of repair and rehabilitation of facilities of the
University of Alaska; amending powers of the Alaska
Housing Finance Corporation; amending the definition of
"public building"; relating to the Alaska debt
retirement fund; and providing for an effective date."
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LINDA REXWINKLE, FISCAL ANALYST, OFFICE OF BUDGET AND
MANAGEMENT provided members with a schedule of the state of
Alaska state general obligation bonds annual debt service
(copy on file). She reviewed the schedule.
Co-Chair Larson noted that the legislation would increase
the annual ratio of facility repair and rehabilitation and
student housing repair and rehabilitation debt service.
Co-Chair MacLean provided members with AMENDMENT 1 (copy on
file). Amendment 1 would delete "$30.0 million dollars and
insert "$15.0 million dollars on page 2, line 23 and delete
"$45.0 million dollars and insert "$30.0 million dollars on
page 3, line 7.
Representative Therriault MOVED to AMEND Amendment 1 to
delete the deletion of "$30.0 million dollars and insert
"$15.0 million dollars on page 2, line 23. He noted that
the amendment to the amendment would reinstate the deferred
maintenance for university housing.
WENDY REDMOND, VICE PRESIDENT, UNIVERSITY OF ALASKA spoke in
support of the amendment to the amendment. She indicated
that the University would prefer that any reductions be made
to the facility repair rehabilitation bonding. She
emphasized that addressing the health, life and safety
problems in the dormitory is the University's first
priority. She clarified that classroom renovation or
completion is not covered by the bonding issuance.
ALISON ELGEE, DIRECTOR OF BUDGET, UNIVERSITY OF ALASKA
explained that only deferred maintenance will be financed by
the bond issuance. Ms. Redmond added that a list of
individual projects has been submitted for the entire $150
million dollar bond issuance. In response to questions by
Representative Navarre, Ms Redmond noted that the projects
are part of the Board of Regents program and planning
priority. She reiterated that funding for deferred
maintenance would not be switched to any building completion
project.
There being no objection, the amendment to the amendment was
adopted.
Representatives Therriault and Navarre spoke against the
amendment. They pointed to the need for funding of the
university's deferred maintenance requirements.
Co-Chair MacLean WITHDREW AMENDMENT 1. There being no
OBJECTION, it was so ordered.
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Representative Martin provided members with AMENDMENT 2
(copy on file). He MOVED to ADOPT AMENDMENT 2. He
explained that amendment 2 would provide for bonding of new
student housing facilities at the University of Alaska,
Southeast and Anchorage campuses.
Co-Chair MacLean OBJECTED to the amendment. She noted that
the amendment would allow new construction.
In response to a question by Representative Navarre, Ms.
Redmond agreed that both projects are high priorities for
new housing. She clarified that deferred maintenance is the
highest priority.
(Tape Change, HFC 94-152, Side 2)
Representative Martin noted that there are over 400 students
requesting housing in Anchorage. He noted that the housing
needs are for students that reside 25 miles or more from the
campus. He stressed the need for on campus housing.
Ms. Elgee explained that the University of Alaska is
required to acquire legislative authorization for bonding
which exceeds $1 million dollars in annual debt service.
Representative Therriault asserted that student housing fees
would not cover debt service costs. Ms. Redmond explained
that student fees can cover maintenance and operations but
not the debt service.
Ms. Elgee added that debt service at the Fairbanks campus
has resulted in a lack of funding for deferred maintenance.
Representative Therriault noted that legislation pending in
the House would allow municipalities to offer tax credits
for private dormitories. Discussion pursued in regards to
upgrading of the Fairbanks campus housing.
Representative Navarre observed that new housing is not the
highest priority of the University.
Ms. Redmond observed that there are only 380 beds available
on the Anchorage campus which services over 30,000 students.
She stated that the need for housing at the Anchorage campus
is extreme. She pointed to the number of rural students
attending the Anchorage campus. Co-Chair MacLean noted that
there is a high withdrawal rate for rural students at the
Anchorage campus.
A roll call vote was taken on the MOTION to adopt AMENDMENT
2.
IN FAVOR: Hoffman, Martin, Grussendorf, Brown
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OPPOSED: Navarre, Parnell, Therriault, Foster, Hanley,
Larson, MacLean
The MOTION FAILED (4-7).
Representative Navarre MOVED to report CSHB 466 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. Representative Martin OBJECTED.
A roll call vote was taken on the MOTION
IN FAVOR: Navarre, Parnell, Therriault, Brown, Foster,
Grussendorf, Hanley, Hoffman, MacLean
OPPOSED: Martin, Larson
The MOTION PASSED (9-2).
HB 466 was reported out of Committee with "no
recommendation" and with three zero fiscal notes, one by the
University of Alaska, dated 3/9/94, and one by the Office of
the Governor, dated 2/11/94, and one by the Department of
Revenue, dated 2/11/94.
ADJOURNMENT
The meeting adjourned at 4:45 p.m.
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