Legislature(1995 - 1996)
05/05/1995 08:40 AM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
MAY 5, 1995
8:40 A.M.
TAPE HFC 95 - 113, Side 1, #000 - end.
TAPE HFC 95 - 113, Side 2, #000 - #476.
CALL TO ORDER
Co-Chair Mark Hanley called the House Finance Committee
meeting to order at 8:40 A.M.
PRESENT
Co-Chair Hanley Representative Kohring
Co-Chair Foster Representative Martin
Representative Mulder Representative Navarre
Representative Brown Representative Parnell
Representative Grussendorf Representative Therriault
Representative Kelly
ALSO PRESENT
Senate President Drue Pearce; Dan Twohing, Marine Pilot
Coordinator, Department of Commerce and Economic
Development; Wendy Redman, University Relations, University
of Alaska; Senator Bert Sharp; Jerry McBeath, Fairbanks
North Star Borough Board of Education, Fairbanks; Wilson
Condon, Commissioner, Department of Revenue; Dan Fauske,
C.E.O., Alaska Housing Finance Corporation, Department of
Revenue.
SUMMARY
SB 88 An Act establishing a pilot program for charter
schools; and providing for an effective date.
CS SB 88 (FIN) was reported out of Committee with
a "do pass" recommendation and with a fiscal note
by the Department of Education dated 3/9/95.
SB 130 An Act relating to marine pilots and the Board of
Marine Pilots; extending the termination date of
the Board of Marine Pilots; and providing for an
effective date.
CS SB 130 (RLS) was HELD in Committee for further
consideration.
HB 281 An Act ratifying an agreement between the Alaska
1
Housing Finance Corporation and the commissioner
of revenue and making certain pledges to obliges
of the corporation regarding that agreement;
relating to the authorization for and 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; and providing for an effective date.
HB 281 was placed in Subcommittee with Chair
Representative Therriault and members
Representative Martin and Representative Brown.
HB 309 An Act approving the University of Alaska's plans
to enter into long-term obligations to borrow
money from the Alaska Housing Finance Corporation
for the acquisition of student housing facilities;
and providing for an effective date.
HB 309 was placed in Subcommittee with Chair
Representative Therriault and with members
Representative Martin and Representative Brown.
SENATE BILL 130
"An Act relating to marine pilots and the Board of
Marine Pilots; extending the termination date of the
Board of Marine Pilots; and providing for an effective
date."
SENATE PRESIDENT DRUE PEARCE spoke in support of SB 130.
She noted that SB 130 was designed to extend the Board of
Marine Pilots and to provide housekeeping changes to the
Marine Pilotage Act of 1991 aimed at reducing the level of
litigation surrounding the marine pilotage industry and
providing a stable regulatory environment for determining
rate for pilotage services.
Senator Pearce added that the legislation was the result of
extensive negotiations and compromises between pilots, the
shipping industry and the Administration. The legislation
is supported by all of those groups. Senator Pearce
concluded that passage of SB 130 would ensure that the
health, safety and welfare of the Alaskan people would be
met through the State's regulation and oversight of marine
pilotage.
Representative Brown asked the changes made which would
affect liability.
DAN TWOHING, MARINE PILOT COORDINATOR, DEPARTMENT OF
COMMERCE AND ECONOMIC DEVELOPMENT, responded that the
2
changes involved for the liability for marine pilots in the
1991 bill was limited to $250 thousand dollars. That law
was written to relate to anything the pilot could have done
to have a sanction for the license. He concluded that
amount of money given a major marine accident would diminish
rapidly. The pilots, through the Alaska Pilots Alliance,
requested to have the statute amended so that pilots would
loose their liability only in incidence of proven gross
negligence or incompetence resulting from chemicals or
alcohol. Any remaining items for which they could loose
liability were removed.
Representative Brown thought that "incompetence" was being
removed. Mr. Twohing advised that incompetence is a matter
of law. Within the scope of maritime investigation and
prosecutions, the real question would be gross negligence
which could lead to an incompetent situation. He added that
the actual word "incompetence" was too vague for the
Department of Law.
Representative Mulder asked how the proposed legislation
would promote competition. Senator Pearce commented that
the 1991 Law created competition amongst pilotage groups in
so much as it allowed for separate groups. Currently, two
separate groups exist.
Representative Mulder questioned the need of a pilotage
group. Mr. Twohing explained that State licensed marine
pilots have knowledge of the waters and ship handling
experience. That information is in the State's best
interest and that pilots "speak" the same language
internationally.
Representative Therriault asked if there was opposition to
the legislation in the various pilot groups. Senator Pearce
explained that each pilot group had compromised their needs
and that SB 130 was legislation resulting from that
compromise and was supported by all interests.
SB 130 was HELD in Committee for further consideration.
HOUSE BILL 309
"An Act approving the University of Alaska's plans to
enter into long-term obligations to borrow money from
the Alaska Housing Finance Corporation for the
acquisition of student housing facilities; and
providing for an effective date."
Representative Martin spoke in support of HB 309. He stated
that HB 309 was in response to the current shortage of
student housing at the University of Alaska statewide
3
system. Specifically, the University of Alaska, Anchorage
campus houses only 7% of the full-time student population
compared to the national average ranging from 35-50% housing
accommodation. Coupled with the shortage, is the limited
housing at the Juneau campus of University of Alaska,
Southeast (UAS), and the absence of any housing at the
Ketchikan campus.
He added that the University of Alaska has the ability to
repay the principal of the money borrowed from Alaska
Housing Finance Committee (AHFC), although they cannot raise
housing rates sufficient to pay market interest rates. The
proposed legislation would solve that problem.
WENDY REDMAN, VICE-PRESIDENT, UNIVERSITY RELATIONS,
UNIVERSITY OF ALASKA, noted that the proposed legislation
was the culmination of several years discussion with AHFC in
trying to find an appropriate way that they could involve
themselves with the University and the housing problem. She
pointed out that University students fall within the preview
of the old Alaska State Housing Authority (ASHA) portion of
AHFC.
This legislation would allow AHFC to go forward so that it
would be consistent with their mission. Ms. Redman added
that a proposal has been worked out that would allow AHFC to
go forward with the University providing the debt service.
The legislation would require AHFC to let 3% revenue bonds
to help with the housing interest rate subsidy. Ms. Redman
emphasized that AHFC from the very beginning has made it
clear to the University that unless HB 281 is also passed,
AHFC will not be in a position to help the University.
She continued that passage of the legislation would provide
to the Anchorage area a total of six hundred new beds plus a
commons facility for eating. She referenced the Juneau
area, noting the less than .5% vacancy rate, pointing out
how restricted housing is for incoming student.
HB 309 was HELD in Committee for further discussion.
SENATE BILL 88
"An Act establishing a pilot program for charter
schools; and providing for an effective date."
SENATOR BERT SHARP testified in support of CS SB 88 (FIN).
He stated that the issue of charter schools was discussed at
length during the two years of the 18th Legislature.
Unfortunately, charter schools was just one part of SB 61,
which in all aspects was an "omnibus education bill". The
bill tried to address diverse issues, each of which were
4
controversial and in some way tainted the other by
association.
He continued that all charter school proposals must be
submitted to the local school board for consideration and
upon their approval, forwarded to the Commissioner of the
Department of Education for review and compliance to state
law. All staffing of charter schools must be done on a
volunteer basis.
Senator Sharp added that a charter school would not dilute
the amount of money available to school districts other
schools. By challenging students to achieve at their
highest capabilities, the charter schools may lead the way
to a more effective education system for the next century.
He urged the Committee to support the legislation. Senator
Sharp noted that the project would sunset in ten years.
Co-Chair Hanley asked if the project would be optional for
each school district. Senator Sharp stated that it would be
optional and would need to be approved by each school board.
Co-Chair Hanley referenced Section 3, Page 3, which implies
that the local school board would "have" to provide the
charter school with a budget. He asked if that language
would require the school district to have a charter school.
Senator Sharp noted that the application for charter school
would need to be submitted by the group to the school board.
The school board would then consider the entire packet. Co-
Chair Hanley reiterated that he understood that the local
school board would have to forfeit to the State Board of
Education applications for a charter school that have been
"approved or denied". Senator Sharp emphasized that the
intent of the legislation defines that the Commissioner of
Education would have to approve the agreement that the
charter group would meet the statutory requirements for
public education.
Representative Grussendorf expressed concern with the
financial obligation of deferred maintenance for the charter
schools and asked if those causes would be binding for the
State. Senator Sharp replied that the school district can
at any point terminate the contract if the charter school
deviated from the prescribed budget.
Representative Brown questioned if there would be any change
on the teachers' tenure accumulation requirements or their
employment conditions. Senator Sharp noted that any
teachers participating in the charter school program would
continue to be subject to collective bargaining agreement
terms and would continue to be employees of the school
5
district.
Representative Brown asked if religious education would be
authorized through the proposed legislation. Senator Sharp
pointed out that Page 4, Line 14, specified that the charter
school would be "nonsectarian".
JERRY MCBEATH, FAIRBANKS NORTH STAR BOROUGH BOARD OF
EDUCATION, FAIRBANKS, spoke in support of CS SB 88 (FIN) and
urged Committee members to support the legislation.
(Tape Change, HFC 95-113, Side 2).
Representative Therriault MOVED to report CS SB 88 (FIN) out
of Committee with individual recommendations and with the
accompanying fiscal note.
CS SB 88 (FIN) was reported out of Committee with a "do
pass" recommendation and with a fiscal note by the
Department of Education dated 3/9/95.
HOUSE BILL 281
"An Act ratifying an agreement between the Alaska
Housing Finance Corporation and the commissioner of
revenue and making certain pledges to obliges of the
corporation regarding that agreement; relating to the
authorization for and 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; and providing
for an effective date."
HOUSE BILL 309
"An Act approving the University of Alaska's plans to
enter into long-term obligations to borrow money from
the Alaska Housing Finance Corporation for the
acquisition of student housing facilities; and
providing for an effective date."
Co-Chair Hanley noted that HB 281 and HB 309 would be placed
in Subcommittee with Representative Therriault as Chair and
with members Representative Martin and Representative Brown.
Representative Mulder asked the long term plans for the
University of Alaska Southeast (UAS). He indicated that
campus was not affordable and suggested spending those
requested funds in other locations. Ms. Redman responded
that the Juneau campus has intentionally been kept very
small and focused. It offers only undergraduate degrees in
6
four different areas. She pointed out that it was the
strongest campus in terms of student growth.
She added that students from Southeast Alaska do not want to
move to Fairbanks, pointing out the low enrollments of
Southeast students moving to Anchorage or Fairbanks for
school. Ms. Redman noted that most of those students tend
to go "outside" if they do not attend UAS. She emphasized
that the long term plan for Juneau would be to keep it small
and focused.
Representative Mulder asked the number of students that go
to UAS. Ms. Redman noted that there were approximately 2000
students. Representative Kelly asked if there was a loss to
the state by the number of students that leave for school.
Ms. Redman replied that students that leave the state
usually do not return which results in a net loss to the
State.
Representative Mulder asked the total cost per university
student at each of the three campuses. Ms. Redman stated
that the tuition was the same at all campuses. The Juneau
campus does cost the State less than the cost of Anchorage
or Fairbanks. She added that cost was reflective of what
UAS offers, with no laboratory courses, faculty are paid on
a lower wage rate and no graduate programs.
Representative Martin pointed out that last year a detailed
study had been provided on the costs associated with each
campus. Ms. Redman stated that the Southeast campus was the
most efficient campus with the lowest administrative cost.
Representative Therriault questioned the fiscal note. Ms.
Redman explained that the $970.2 thousand dollars was the
appropriation amount and represented the University's share
of the debt service on the dormitories in Anchorage. The
University is required to get authorization to spend any of
their own debt service that exceeds over $1 million dollars
per year on a revenue bond.
Representative Kohring asked if the University supported
combining the two bills. Ms. Redman advised that the
preference would be to leave the pieces of legislation
separate and that HB 309 would be contingent on the passage
of HB 281.
Representative Kohring asked what the bond rate would have
been if it had not been subsidized. Ms. Redman replied that
the rate would be close to 6.7%. Representative Kohring
pointed out that would be an interest rate subsidy.
WILSON CONDON, COMMISSIONER, DEPARTMENT OF REVENUE, spoke in
7
support of HB 281. He stated that the bill had been
introduced by the Governor. He provided the Committee
members with a position paper regarding the statewide
system. [Attachment #1]. He also provided members with the
"University of Alaska Deferred Maintenance" brochure. [Copy
on file].
Representative Martin commented on the deferred maintenance
costs of student housing. Commissioner Condon explained
that deferred maintenance would need to be housing related.
DAN FAUSKE, (TESTIFIED VIA TELECONFERENCE), C.E.O., ALASKA
HOUSING FINANCING AUTHORITY, DEPARTMENT OF REVENUE,
ANCHORAGE, stated that deferred maintenance would be
provided under AS 18:56 and that AHFC could be involved with
the deferred maintenance. The key to maintaining financial
stability of the package would be in continuing a good
credit rating. He concluded that a strong AHFC will capture
the capital needed to fund the projects.
Representative Therriault asked how the $30 million dollars
had been determined for the deferred maintenance bond
authorization. Ms. Redman replied that the real number
would be $35 million dollars as recommended in last year's
legislation. Representative Therriault asked if $70 million
dollars would be the transfer amount. Commissioner Condon
replied that the agreement as negotiated between AFHC and
the Department would transfer $70 million dollars in the
next fiscal year and then followed by a $50 million dollar
transfer for each of the following four fiscal years. This
legislation would authorize that agreement.
Representative Martin noted that the Senate had agreed with
that amount. Representative Mulder disagreed with the
proposal. He stated that this would take money "off the
table" away from the Legislature's future use and "give" it
to University priorities. Commissioner Condon countered
that the bill would fund a project and would make a
provision for a long term financial plan in order to protect
the value of AHFC as an asset.
Commissioner Condon continued that AHFC as an asset will
produce roughly $100 million dollars a year in revenue that
the Legislature can use. The legislation would commit those
funds for use in bonding for one project. There would be no
commitment in regards to the transfer plan.
Representative Therriault asked if the legislation would
limit the use to the assets and not the cash. Commissioner
Condon did not know. He stated that the legislation would
represent a policy judgement that roughly half of the net
8
available funds coming out of AHFC be reserved to meet the
kinds of needs that have typically been met by AHFC and its
programs.
HB 281 and HB 309 were HELD in Committee for further
consideration in Subcommittee.
ADJOURNMENT
The meeting adjourned at 10:00 A.M.
HOUSE FINANCE COMMITTEE
MAY 5, 1995
8:40 A.M.
TAPE HFC 95 - 113, Side 1, #000 - end.
TAPE HFC 95 - 113, Side 2, #000 - #476.
CALL TO ORDER
Co-Chair Mark Hanley called the House Finance Committee
meeting to order at 8:40 A.M.
PRESENT
Co-Chair Hanley Representative Kohring
Co-Chair Foster Representative Martin
Representative Mulder Representative Navarre
Representative Brown Representative Parnell
Representative Grussendorf Representative Therriault
Representative Kelly
ALSO PRESENT
Senate President Drue Pearce; Dan Twohing, Marine Pilot
Coordinator, Department of Commerce and Economic
Development; Wendy Redman, University Relations, University
of Alaska; Senator Bert Sharp; Jerry McBeath, Fairbanks
North Star Borough Board of Education, Fairbanks; Wilson
Condon, Commissioner, Department of Revenue; Dan Fauske,
C.E.O., Alaska Housing Finance Corporation, Department of
Revenue.
SUMMARY
SB 88 An Act establishing a pilot program for charter
schools; and providing for an effective date.
CS SB 88 (FIN) was reported out of Committee with
a "do pass" recommendation and with a fiscal note
by the Department of Education dated 3/9/95.
9
SB 130 An Act relating to marine pilots and the Board of
Marine Pilots; extending the termination date of
the Board of Marine Pilots; and providing for an
effective date.
CS SB 130 (RLS) was HELD in Committee for further
consideration.
HB 281 An Act ratifying an agreement between the Alaska
Housing Finance Corporation and the commissioner
of revenue and making certain pledges to obliges
of the corporation regarding that agreement;
relating to the authorization for and 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; and providing for an effective date.
HB 281 was placed in Subcommittee with Chair
Representative Therriault and members
Representative Martin and Representative Brown.
HB 309 An Act approving the University of Alaska's plans
to enter into long-term obligations to borrow
money from the Alaska Housing Finance Corporation
for the acquisition of student housing facilities;
and providing for an effective date.
HB 309 was placed in Subcommittee with Chair
Representative Therriault and with members
Representative Martin and Representative Brown.
SENATE BILL 130
"An Act relating to marine pilots and the Board of
Marine Pilots; extending the termination date of the
Board of Marine Pilots; and providing for an effective
date."
SENATE PRESIDENT DRUE PEARCE spoke in support of SB 130.
She noted that SB 130 was designed to extend the Board of
Marine Pilots and to provide housekeeping changes to the
Marine Pilotage Act of 1991 aimed at reducing the level of
litigation surrounding the marine pilotage industry and
providing a stable regulatory environment for determining
rate for pilotage services.
Senator Pearce added that the legislation was the result of
extensive negotiations and compromises between pilots, the
shipping industry and the Administration. The legislation
is supported by all of those groups. Senator Pearce
concluded that passage of SB 130 would ensure that the
10
health, safety and welfare of the Alaskan people would be
met through the State's regulation and oversight of marine
pilotage.
Representative Brown asked the changes made which would
affect liability.
DAN TWOHING, MARINE PILOT COORDINATOR, DEPARTMENT OF
COMMERCE AND ECONOMIC DEVELOPMENT, responded that the
changes involved for the liability for marine pilots in the
1991 bill was limited to $250 thousand dollars. That law
was written to relate to anything the pilot could have done
to have a sanction for the license. He concluded that
amount of money given a major marine accident would diminish
rapidly. The pilots, through the Alaska Pilots Alliance,
requested to have the statute amended so that pilots would
loose their liability only in incidence of proven gross
negligence or incompetence resulting from chemicals or
alcohol. Any remaining items for which they could loose
liability were removed.
Representative Brown thought that "incompetence" was being
removed. Mr. Twohing advised that incompetence is a matter
of law. Within the scope of maritime investigation and
prosecutions, the real question would be gross negligence
which could lead to an incompetent situation. He added that
the actual word "incompetence" was too vague for the
Department of Law.
Representative Mulder asked how the proposed legislation
would promote competition. Senator Pearce commented that
the 1991 Law created competition amongst pilotage groups in
so much as it allowed for separate groups. Currently, two
separate groups exist.
Representative Mulder questioned the need of a pilotage
group. Mr. Twohing explained that State licensed marine
pilots have knowledge of the waters and ship handling
experience. That information is in the State's best
interest and that pilots "speak" the same language
internationally.
Representative Therriault asked if there was opposition to
the legislation in the various pilot groups. Senator Pearce
explained that each pilot group had compromised their needs
and that SB 130 was legislation resulting from that
compromise and was supported by all interests.
SB 130 was HELD in Committee for further consideration.
HOUSE BILL 309
11
"An Act approving the University of Alaska's plans to
enter into long-term obligations to borrow money from
the Alaska Housing Finance Corporation for the
acquisition of student housing facilities; and
providing for an effective date."
Representative Martin spoke in support of HB 309. He stated
that HB 309 was in response to the current shortage of
student housing at the University of Alaska statewide
system. Specifically, the University of Alaska, Anchorage
campus houses only 7% of the full-time student population
compared to the national average ranging from 35-50% housing
accommodation. Coupled with the shortage, is the limited
housing at the Juneau campus of University of Alaska,
Southeast (UAS), and the absence of any housing at the
Ketchikan campus.
He added that the University of Alaska has the ability to
repay the principal of the money borrowed from Alaska
Housing Finance Committee (AHFC), although they cannot raise
housing rates sufficient to pay market interest rates. The
proposed legislation would solve that problem.
WENDY REDMAN, VICE-PRESIDENT, UNIVERSITY RELATIONS,
UNIVERSITY OF ALASKA, noted that the proposed legislation
was the culmination of several years discussion with AHFC in
trying to find an appropriate way that they could involve
themselves with the University and the housing problem. She
pointed out that University students fall within the preview
of the old Alaska State Housing Authority (ASHA) portion of
AHFC.
This legislation would allow AHFC to go forward so that it
would be consistent with their mission. Ms. Redman added
that a proposal has been worked out that would allow AHFC to
go forward with the University providing the debt service.
The legislation would require AHFC to let 3% revenue bonds
to help with the housing interest rate subsidy. Ms. Redman
emphasized that AHFC from the very beginning has made it
clear to the University that unless HB 281 is also passed,
AHFC will not be in a position to help the University.
She continued that passage of the legislation would provide
to the Anchorage area a total of six hundred new beds plus a
commons facility for eating. She referenced the Juneau
area, noting the less than .5% vacancy rate, pointing out
how restricted housing is for incoming student.
HB 309 was HELD in Committee for further discussion.
SENATE BILL 88
12
"An Act establishing a pilot program for charter
schools; and providing for an effective date."
SENATOR BERT SHARP testified in support of CS SB 88 (FIN).
He stated that the issue of charter schools was discussed at
length during the two years of the 18th Legislature.
Unfortunately, charter schools was just one part of SB 61,
which in all aspects was an "omnibus education bill". The
bill tried to address diverse issues, each of which were
controversial and in some way tainted the other by
association.
He continued that all charter school proposals must be
submitted to the local school board for consideration and
upon their approval, forwarded to the Commissioner of the
Department of Education for review and compliance to state
law. All staffing of charter schools must be done on a
volunteer basis.
Senator Sharp added that a charter school would not dilute
the amount of money available to school districts other
schools. By challenging students to achieve at their
highest capabilities, the charter schools may lead the way
to a more effective education system for the next century.
He urged the Committee to support the legislation. Senator
Sharp noted that the project would sunset in ten years.
Co-Chair Hanley asked if the project would be optional for
each school district. Senator Sharp stated that it would be
optional and would need to be approved by each school board.
Co-Chair Hanley referenced Section 3, Page 3, which implies
that the local school board would "have" to provide the
charter school with a budget. He asked if that language
would require the school district to have a charter school.
Senator Sharp noted that the application for charter school
would need to be submitted by the group to the school board.
The school board would then consider the entire packet. Co-
Chair Hanley reiterated that he understood that the local
school board would have to forfeit to the State Board of
Education applications for a charter school that have been
"approved or denied". Senator Sharp emphasized that the
intent of the legislation defines that the Commissioner of
Education would have to approve the agreement that the
charter group would meet the statutory requirements for
public education.
Representative Grussendorf expressed concern with the
financial obligation of deferred maintenance for the charter
schools and asked if those causes would be binding for the
State. Senator Sharp replied that the school district can
13
at any point terminate the contract if the charter school
deviated from the prescribed budget.
Representative Brown questioned if there would be any change
on the teachers' tenure accumulation requirements or their
employment conditions. Senator Sharp noted that any
teachers participating in the charter school program would
continue to be subject to collective bargaining agreement
terms and would continue to be employees of the school
district.
Representative Brown asked if religious education would be
authorized through the proposed legislation. Senator Sharp
pointed out that Page 4, Line 14, specified that the charter
school would be "nonsectarian".
JERRY MCBEATH, FAIRBANKS NORTH STAR BOROUGH BOARD OF
EDUCATION, FAIRBANKS, spoke in support of CS SB 88 (FIN) and
urged Committee members to support the legislation.
(Tape Change, HFC 95-113, Side 2).
Representative Therriault MOVED to report CS SB 88 (FIN) out
of Committee with individual recommendations and with the
accompanying fiscal note.
CS SB 88 (FIN) was reported out of Committee with a "do
pass" recommendation and with a fiscal note by the
Department of Education dated 3/9/95.
HOUSE BILL 281
"An Act ratifying an agreement between the Alaska
Housing Finance Corporation and the commissioner of
revenue and making certain pledges to obliges of the
corporation regarding that agreement; relating to the
authorization for and 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; and providing
for an effective date."
HOUSE BILL 309
"An Act approving the University of Alaska's plans to
enter into long-term obligations to borrow money from
the Alaska Housing Finance Corporation for the
acquisition of student housing facilities; and
providing for an effective date."
Co-Chair Hanley noted that HB 281 and HB 309 would be placed
in Subcommittee with Representative Therriault as Chair and
14
with members Representative Martin and Representative Brown.
Representative Mulder asked the long term plans for the
University of Alaska Southeast (UAS). He indicated that
campus was not affordable and suggested spending those
requested funds in other locations. Ms. Redman responded
that the Juneau campus has intentionally been kept very
small and focused. It offers only undergraduate degrees in
four different areas. She pointed out that it was the
strongest campus in terms of student growth.
She added that students from Southeast Alaska do not want to
move to Fairbanks, pointing out the low enrollments of
Southeast students moving to Anchorage or Fairbanks for
school. Ms. Redman noted that most of those students tend
to go "outside" if they do not attend UAS. She emphasized
that the long term plan for Juneau would be to keep it small
and focused.
Representative Mulder asked the number of students that go
to UAS. Ms. Redman noted that there were approximately 2000
students. Representative Kelly asked if there was a loss to
the state by the number of students that leave for school.
Ms. Redman replied that students that leave the state
usually do not return which results in a net loss to the
State.
Representative Mulder asked the total cost per university
student at each of the three campuses. Ms. Redman stated
that the tuition was the same at all campuses. The Juneau
campus does cost the State less than the cost of Anchorage
or Fairbanks. She added that cost was reflective of what
UAS offers, with no laboratory courses, faculty are paid on
a lower wage rate and no graduate programs.
Representative Martin pointed out that last year a detailed
study had been provided on the costs associated with each
campus. Ms. Redman stated that the Southeast campus was the
most efficient campus with the lowest administrative cost.
Representative Therriault questioned the fiscal note. Ms.
Redman explained that the $970.2 thousand dollars was the
appropriation amount and represented the University's share
of the debt service on the dormitories in Anchorage. The
University is required to get authorization to spend any of
their own debt service that exceeds over $1 million dollars
per year on a revenue bond.
Representative Kohring asked if the University supported
combining the two bills. Ms. Redman advised that the
preference would be to leave the pieces of legislation
15
separate and that HB 309 would be contingent on the passage
of HB 281.
Representative Kohring asked what the bond rate would have
been if it had not been subsidized. Ms. Redman replied that
the rate would be close to 6.7%. Representative Kohring
pointed out that would be an interest rate subsidy.
WILSON CONDON, COMMISSIONER, DEPARTMENT OF REVENUE, spoke in
support of HB 281. He stated that the bill had been
introduced by the Governor. He provided the Committee
members with a position paper regarding the statewide
system. [Attachment #1]. He also provided members with the
"University of Alaska Deferred Maintenance" brochure. [Copy
on file].
Representative Martin commented on the deferred maintenance
costs of student housing. Commissioner Condon explained
that deferred maintenance would need to be housing related.
DAN FAUSKE, (TESTIFIED VIA TELECONFERENCE), C.E.O., ALASKA
HOUSING FINANCING AUTHORITY, DEPARTMENT OF REVENUE,
ANCHORAGE, stated that deferred maintenance would be
provided under AS 18:56 and that AHFC could be involved with
the deferred maintenance. The key to maintaining financial
stability of the package would be in continuing a good
credit rating. He concluded that a strong AHFC will capture
the capital needed to fund the projects.
Representative Therriault asked how the $30 million dollars
had been determined for the deferred maintenance bond
authorization. Ms. Redman replied that the real number
would be $35 million dollars as recommended in last year's
legislation. Representative Therriault asked if $70 million
dollars would be the transfer amount. Commissioner Condon
replied that the agreement as negotiated between AFHC and
the Department would transfer $70 million dollars in the
next fiscal year and then followed by a $50 million dollar
transfer for each of the following four fiscal years. This
legislation would authorize that agreement.
Representative Martin noted that the Senate had agreed with
that amount. Representative Mulder disagreed with the
proposal. He stated that this would take money "off the
table" away from the Legislature's future use and "give" it
to University priorities. Commissioner Condon countered
that the bill would fund a project and would make a
provision for a long term financial plan in order to protect
the value of AHFC as an asset.
Commissioner Condon continued that AHFC as an asset will
16
produce roughly $100 million dollars a year in revenue that
the Legislature can use. The legislation would commit those
funds for use in bonding for one project. There would be no
commitment in regards to the transfer plan.
Representative Therriault asked if the legislation would
limit the use to the assets and not the cash. Commissioner
Condon did not know. He stated that the legislation would
represent a policy judgement that roughly half of the net
available funds coming out of AHFC be reserved to meet the
kinds of needs that have typically been met by AHFC and its
programs.
HB 281 and HB 309 were HELD in Committee for further
consideration in Subcommittee.
ADJOURNMENT
The meeting adjourned at 10:00 A.M.
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