Legislature(1997 - 1998)

02/10/1997 01:40 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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                     HOUSE FINANCE COMMITTEE                                   
                        FEBRUARY 10, 1997                                      
                            1:40 P.M.                                          
                                                                               
  TAPE HFC 97 - 21, Side 1, #000 - #630.                                       
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair Gene Therriault called  the House Finance Committee                 
  meeting to order at 1:40 P.M.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Kelly                           
  Co-Chair Therriault           Representative Kohring                         
  Representative Davies         Representative Martin                          
  Representative Davis          Representative Grussendorf                     
  Representative Foster         Representative Mulder                          
                                                                               
  Representative Moses was not present for the meeting.                        
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Dan  Spencer,  Budget  Analyst,  Budget  Review,  Office  of                 
  Management and Budget, Office of the Governor; Ken Bischoff,                 
  Director, Division of Administrative Services, Department of                 
  Public Safety; Keith Kelton, Director,  Division of Facility                 
  Construction  &  Operation,   Department  of   Environmental                 
  Conservation;  Garrey  Peska,   Alaska  State  Hospital  and                 
  Nursing  Home  Association (ASHNHA),  Juneau;  Betty Martin,                 
  Comptroller, Treasury Division, Department of Revenue.                       
                                                                               
  SUMMARY                                                                      
                                                                               
  HB 102    An  Act  abolishing  the Alaska  Medical  Facility                 
            Authority; and providing for an effective date.                    
                                                                               
            HB  102   was  HELD  in   Committee  for   further                 
            discussion.                                                        
                                                                               
  HB 103    An Act repealing certain state  funds and accounts                 
            and boards, limitations,  and programs related  to                 
            those funds  and  accounts; and  providing for  an                 
            effective date.                                                    
                                                                               
            HB  103   was  HELD   in  Committee   for  further                 
            discussion.                                                        
                                                                               
  HB 104    An  Act repealing  the  search  and  rescue  fund;                 
            relating  to expenditures  for  search and  rescue                 
            activities; and providing for an effective date.                   
                                                                               
                                1                                              
                                                                               
                                                                               
            HB   104  was  HELD   in  Committee   for  further                 
            discussion.                                                        
                                                                               
  HB 105    An  Act   relating  to  the   unorganized  borough                 
            national  forest  receipts program;  and providing                 
            for an effective date.                                             
                                                                               
            HB  105 was reported  out of Committee  with a "do                 
            pass" recommendation  and with a zero  fiscal note                 
            by  the  Department  of  Community  and   Regional                 
            Affairs.                                                           
                                                                               
  HB 106    An  Act  relating  to  the  municipal   assistance                 
            program  and the  organization grant  program; and                 
            providing for an effective date.                                   
                                                                               
            HB  106 was reported  out of Committee  with a "do                 
            pass" recommendation  and with a zero  fiscal note                 
            by  the  Department  of  Community  and   Regional                 
            Affairs.                                                           
                                                                               
  HB 107    An  Act relating to  water quality enhancement and                 
            water supply, wastewater,  and solid waste systems                 
            grants; and providing for an effective date.                       
                                                                               
            HB  107 was reported  out of Committee  with a "do                 
            pass" recommendation and  with a zero fiscal  note                 
            by the Department of Environmental Conservation.                   
                                                                               
  HB 108    An Act  relating to the crime  victim compensation                 
            program; and providing for an effective date.                      
                                                                               
            HB 108 was  reported out of  Committee with a  "do                 
            pass" recommendation  and  with  two  zero  fiscal                 
            notes by the Department of Public Safety.                          
                                                                               
  CO-CHAIR GENE THERRIAULT explained that  the packet of bills                 
  before  the Committee had  been consolidated as  a result of                 
  work  provided  by  Representative Martin  as  Chair  of the                 
  Legislative Budget and Audit Committee (LBA).                                
                                                                               
  DAN  SPENCER,  BUDGET  ANALYST,  BUDGET  REVIEW,  OFFICE  OF                 
  MANAGEMENT AND BUDGET (OMB), OFFICE OF THE GOVERNOR, advised                 
  that  OMB  foresaw  only  one   problem  with  the  proposed                 
  legislation, Section #1 of HB 104.                                           
                                                                               
  Mr.  Spencer  added,  OMB has  spoken  with  each department                 
  regarding the legislation's impact.  Also, the Department of                 
  Administration, Division of Finance has been consulted.                      
                                                                               
  Representative John Davies  commented that he had  written a                 
                                                                               
                                2                                              
                                                                               
                                                                               
  letter  to  each  departmental  commissioner  regarding  the                 
  legislative impacts.  He indicated that a number of affected                 
  divisions  had  not been  consulted.   HB  104 had  not been                 
  included on the  original list and  he requested that it  be                 
  held  in  Committee until  response  was received  from that                 
  Department.    Co-Chair  Therriault noted  that  it  was his                 
  intent to report  the bills out  of Committee, although,  if                 
  the Committee needed additional time to consider some of the                 
  legislation,  action could be  postponed until the following                 
  meeting.  #HB104                                                             
  HOUSE BILL 104                                                               
                                                                               
       "An Act repealing the search  and rescue fund; relating                 
       to expenditures for  search and rescue activities;  and                 
       providing for an effective date."                                       
                                                                               
  Co-Chair Therriault stated that search and rescue activities                 
  are  appropriated  directly from  the  General Fund  and not                 
  through the Search and Rescue Fund.   That fund has remained                 
  empty and inactive.   The legislation would  remove the fund                 
  from statutes, as well as reference to the fund.                             
                                                                               
  KEN BISCHOFF, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,                 
  DEPARTMENT  OF PUBLIC  SAFETY,  encouraged  the deletion  of                 
  Section #1, which  would make the  legislation apply to  all                 
  funding sources.   In the  Search and Rescue  BRU component,                 
  there  remains  $280 thousand  General  Fund dollars,  which                 
  would  be  subject   to  the   limit  imposed  through   the                 
  legislation.  Many search and  rescues exceed $2500 dollars.                 
  The  Department's  manual  has established  that  individual                 
  personal in the  field are authorized  to spend up to  $2500                 
  dollars and  then would be responsible to contact the person                 
  next  in  command  to make  additional  spending  decisions.                 
  Seldom do approvals  go through  to the  Commissioner.   Mr.                 
  Bischoff reiterated that the Department  would prefer not to                 
  have the Commissioner in the loop of approval.                               
                                                                               
  Co-Chair Therriault  asked if  the Department  was operating                 
  "around" the  Search and  Rescue Fund  in order  to avoid  a                 
  limitation being imposed.   Mr. Bischoff explained  that the                 
  way a limitation was  constructed, it would have applied  to                 
  appropriations  from  the  Search  and  Rescue Funds.    The                 
  Department did not apply the  limitation to straight general                 
  fund appropriations that were outside the realm of the fund.                 
  That action  would be controlled through  Department policy.                 
  The Department requests  that all the language in Section #1                 
  be deleted.                                                                  
                                                                               
  Representative J. Davies MOVED to insert language on Page 1,                 
  Line 11,  Section #2,  "and AS  18.60.140".   That  language                 
  would delete Section #1.   There being NO OBJECTION,  it was                 
  adopted.                                                                     
                                                                               
                                3                                              
                                                                               
                                                                               
  Co-Chair Therriault noted  that if Section AS  18.60.140 and                 
  145 were combined, HB 104 could be rolled over into HB  103.                 
  He  recommended  that Legal  Services  be consulted  on that                 
  matter.                                                                      
                                                                               
  Representative Grussendorf pointed  out that  the intent  of                 
  the original  language, allowed contributions  and donations                 
  to the  fund.   Mr. Bischoff responded  that a  contribution                 
  would  be  distributed  to  a  legislative  revised  program                 
  through  action   of  the  Legislative   Budget  and   Audit                 
  Committee.                                                                   
                                                                               
  Representative  J.  Davies requested  the  bill be  held for                 
  additional clarification.                                                    
                                                                               
  HB 104 was HELD in Committee for further discussion.                         
  HOUSE BILL 108                                                               
                                                                               
       "An  Act  relating  to  the crime  victim  compensation                 
       program; and providing for an effective date."                          
                                                                               
  Co-Chair   Therriault   stated   that   the   Crime   Victim                 
  Compensation Program  had not received  allocations from the                 
  fund  established  by  statute.   The  inactive  account was                 
  cleared by changing reference from "fund" to "program".                      
                                                                               
  Representative J. Davies added that  both the Department and                 
  Division which the proposed legislation would  affect agreed                 
  that passage of  the legislation would not  adversely affect                 
  them.                                                                        
  Mr. Bischoff interjected that  the Department was supportive                 
  of passage of HB 108.                                                        
                                                                               
  Representative  Mulder  MOVED  to  report   HB  108  out  of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal note.                                                    
                                                                               
  HB  108  was reported  out  of  Committee with  a  "do pass"                 
  recommendation  and  with  two  zero  fiscal  notes  by  the                 
  Department of Public Safety.                                                 
  HOUSE BILL 107                                                               
                                                                               
       "An Act relating to water quality enhancement and water                 
       supply, wastewater, and solid waste systems grants; and                 
       providing for an effective date."                                       
                                                                               
  Co-Chair Therriault explained that the proposed  legislation                 
  would remove from statutes the Water Quality Enhancement and                 
  Water Supply, Wastewater, and Solid Waste Systems Fund.  The                 
                                                                               
                                4                                              
                                                                               
                                                                               
  fund is empty and  has not been used to  make appropriations                 
  to the program.                                                              
                                                                               
  KEITH KELTON, DIRECTOR, DIVISION OF FACILITY CONSTRUCTION  &                 
  OPERATION, DEPARTMENT OF  ENVIRONMENTAL CONSERVATION,  noted                 
  that  the Department  would  not object  to  passage of  the                 
  proposed  legislation.    The  Department initially  thought                 
  there could be a conflict in receiving federal  authority to                 
  establish  an Alaska Safe Water Drinking Fund.  Upon further                 
  investigation, there  would be  no conflict  to create  that                 
  fund with passage of this legislation.                                       
                                                                               
  Representative  J.  Davies  asked  how  the  fund  would  be                 
  established.  Mr.  Kelton replied,  another statute  created                 
  two  years ago,  AS 46.03.036,  specifically  authorizes the                 
  Department to administer  that program.                                      
                                                                               
  Representative  Mulder  MOVED  to  report   HB  107  out  of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal note.  There  being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
  HB  107  was reported  out  of  Committee with  a  "do pass"                 
  recommendation and with a zero fiscal note by the Department                 
  of Environmental Conservation (DEC).                                         
  HOUSE BILL 105                                                               
                                                                               
       "An Act  relating to  the unorganized borough  national                 
       forest receipts program; and providing for an effective                 
       date."                                                                  
                                                                               
  Co-Chair Therriault stated that there  is no anticipated use                 
  for the Unorganized  Borough National Forest  Receipts Fund.                 
  Federal appropriations for the program  go directly into the                 
  General  Fund, leaving  the  special  account  inactive  and                 
  empty.   Passage of this  legislation would clear the unused                 
  account from Statutes, by changing the reference from "fund"                 
  to "program".                                                                
                                                                               
  Mr. Spencer  advised that  the Department  of Community  and                 
  Regional Affairs (DCRA) was in support of HB 105.                            
                                                                               
  Representative  Martin  MOVED  to  report   HB  105  out  of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal note.                                                    
                                                                               
  HB  105  was reported  out  of  Committee with  a  "do pass"                 
  recommendation  and  with   a  zero  fiscal  noted   by  the                 
  Department of Community and Regional Affairs.                                
  HOUSE BILL 106                                                               
                                                                               
                                5                                              
                                                                               
                                                                               
       "An  Act relating to  the municipal  assistance program                 
       and the  organization grant program; and  providing for                 
       an effective date."                                                     
                                                                               
  Co-Chair  Therriault  noted  that  although  these  programs                 
  remain operative, the Municipal  Assistance and Organization                 
  Grant Funds are inactive and empty.  Legislation would clear                 
  the  "fund"(s)  from   statutes,  and  refer  only   to  the                 
  "program"(s).                                                                
                                                                               
  Mr.  Spencer  noted  that the  Department  of  Community and                 
  Regional Affairs (DCRA) was in support of passage of HB 106.                 
                                                                               
  Representative  Martin  MOVED  to  report   HB  106  out  of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal note.  There being NO OBJECTION,  it was                 
  so ordered.                                                                  
                                                                               
  HB  106  was reported  out  of  Committee with  a  "do pass"                 
  recommendation and with a zero fiscal note by the Department                 
  of Community and Regional Affairs.                                           
  HOUSE BILL 103                                                               
                                                                               
       "An Act repealing certain state  funds and accounts and                 
       boards,  limitations,  and  programs related  to  those                 
       funds  and  accounts; and  providing  for  an effective                 
       date."                                                                  
                                                                               
  Mr.  Spencer  acknowledged   that  the  proposed   committee                 
  substitute   (CS)  had   addressed   the  concerns   of  the                 
  Administration.                                                              
                                                                               
  Co-Chair Hanley MOVED that the work  draft, CS HB 103 (FIN),                 
  Committee. There being NO OBJECTION, it was adopted.                         
                                                                               
  Co-Chair Therriault noted  that the Administration's concern                 
  was to language on Page #5, Line #5, repealing AS 47.37.045.                 
  The Department  recommended deleting  the  fund and  leaving                 
  grant  authority  in  the  bill.     The  remaining  section                 
  addresses grants to the juvenile justice package.                            
                                                                               
  Representative J.  Davies requested that the  legislation be                 
  held in order to determine the impact of rolling HB 104 into                 
  it.                                                                          
                                                                               
  CS  HB   103  (FIN)  was  HELD  in   Committee  for  further                 
  discussion.                                                                  
  HOUSE BILL 102                                                               
                                                                               
                                6                                              
                                                                               
                                                                               
       "An  Act   abolishing  the   Alaska  Medical   Facility                 
       Authority; and providing for an effective date."                        
                                                                               
  Co-Chair Therriault noted that  the legislation would follow                 
  up with  last year's SB  136, which transferred  the balance                 
  remaining in the Alaska Medical Facilities Authority Fund to                 
  the General Fund, thus, closing  out all accounts pertaining                 
  to the  Authority.   By  repealing  AS 18.26,  the  obsolete                 
  Alaska Medical Facility Authority would  be cleared from the                 
  Statutes.                                                                    
                                                                               
  Mr. Spencer stated that the Department of Revenue (DOR)  did                 
  not oppose the proposed legislation.                                         
                                                                               
  GARREY  PESKA,  ALASKA  STATE  HOSPITAL  AND   NURSING  HOME                 
  ASSOCIATION (ASHNHA),  JUNEAU,  noted  that  ASHNHA  members                 
  request that HB  102 not be  passed from Committee and  that                 
  the Alaska  Medical Facilities  Authority not  be abolished.                 
  The Authority  was established  in 1978  for the  purpose of                 
  selling tax  exempt revenue  bonds with  the proceeds  being                 
  used for medical facility construction and improvements.                     
                                                                               
  Mr.  Peska  stated  that  in the  past,  the  Authority  had                 
  provided financing for two projects through bond sales.  One                 
  was for  the purchase of Careage North and the other was for                 
  remodeling  Fairbanks Memorial  Hospital; since  then, there                 
  has  been  no  activity  in  the  Authority.    Leaving  the                 
  Authority  on  the  "books" would  provide  a  mechanism for                 
  selling tax exempt revenue bonds to finance medical facility                 
  construction  and   improvements  in   the  future.     Some                 
  facilities are municipally  owned and they can  sell revenue                 
  bonds  through the  municipalities and  the State  Municipal                 
  Bond  Bank.    Other  non  profit facilities  that  are  not                 
  municipally owned could use this Authority for that purpose.                 
  He  emphasized, there is no compelling reason to abolish the                 
  Authority.                                                                   
                                                                               
  He continued, the Department of  Revenue has stated that  if                 
  bonds are sold  by the  Authority, they are  not general  or                 
  moral obligations of the  State.  They are secured  by lease                 
  payments on medical  facilities mortgaged  to the  Authority                 
  which would not impact the State's bond rating.                              
                                                                               
  Representative  Mulder  asked  what communities  might  take                 
  advantage  of the services offered.   Mr. Peska replied that                 
  one good example would be St. Ann's Care Center in Juneau, a                 
  private, non  profit care  center, not  affiliated with  the                 
  municipality.   The Authority  would be  the only  mechanism                 
  available to sell tax exempt bonds to keep their costs down.                 
                                                                               
                                                                               
                                7                                              
                                                                               
                                                                               
  Co-Chair Therriault  suggested that  the municipality  could                 
  loan out  their bonding  authority.   Mr. Peska  stated that                 
  would  not be possible  for any private,  non profit medical                 
  facility.  Co-Chair Therriault asked if there would be costs                 
  associated to the State for the Authority.                                   
                                                                               
  BETTY MARTIN, COMPTROLLER, TREASURY  DIVISION, DEPARTMENT OF                 
  REVENUE, advised that there would be no costs incurred until                 
  there was  money in the fund.  A  one percent (1%) charge of                 
  the  outstanding bonds would be  collected each year for the                 
  medical facility.                                                            
                                                                               
  Co-Chair  Therriault  acknowledged  that   unless  Committee                 
  members were compelled to  move the legislation, he did  not                 
  think  it  was essential  to move  HB  102 forward  with the                 
  remaining  legislation,  given  the   possibility  that  the                 
  medical community could  need that privilege in  the future.                 
  Co-Chair  Hanley  requested  that  research  be  provided to                 
  determine  if  other  avenues  exist   for  the  tax  exempt                 
  financing.                                                                   
                                                                               
  HB 102 was HELD in Committee for further discussion.                         
  Co-Chair Therriault  distributed a  work draft  handout, #0-                 
  LS042\E, Chenoweth, 2/03/97, and memo from the University of                 
  Alaska  with the suggested language on  the management of UA                 
  Endowment Trust Funds.  [Copy on file].                                      
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 2:20 P.M.                                           
                                                                               
                                                                               
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