Legislature(2001 - 2002)
05/17/2002 05:44 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
May 17, 2002
5:44 PM
TAPE HFC SS-02 - 1, Side A
CALL TO ORDER
Co-Chair Williams called the House Finance Committee meeting
to order at 5:44 PM.
MEMBERS PRESENT
Representative Eldon Mulder, Co-Chair
Representative Bill Williams, Co-Chair
Representative Con Bunde, Vice-Chair
Representative Eric Croft
Representative John Harris
Representative Ken Lancaster
Representative Jim Whitaker
Representative Carl Moses
MEMBERS ABSENT
Representative John Davies
Representative Richard Foster
Representative Bill Hudson
ALSO PRESENT
Senator John Torgerson; Representative Drew Scalzi; Annalee
McConnell, Director, Office of Management and Budget, Office
of the Governor.
SUMMARY
HB 2001 An Act setting timelines for issuance of final
orders by the Regulatory Commission of Alaska,
amending the authority of the commission to enter
compromise settlement orders, and extending the
commission's termination date to June 30, 2006;
and providing for an effective date.
CSHB 2001 was REPORTED out of Committee with a "do
pass" recommendation and with a new fiscal impact
note by the Department of Community and Economic
Development.
HB 2002 An Act relating to the issuance of general
obligation bonds for the purpose of paying the
cost of design, construction, and major
maintenance of educational and museum facilities;
and providing for an effective date.
HB 2002 was heard and HELD in Committee for
further consideration.
HB 2003 An Act relating to municipal bond reimbursement
for school construction; and providing for an
effective date.
HB 2003 was heard and HELD in Committee for
further consideration.
HB 2007 An Act making an appropriation to reverse the
effect of art. IX, sec. 17(d), Constitution of the
State of Alaska; making an appropriation to
balance revenue and general fund appropriations;
making an appropriation to the Department of
Revenue for management of the constitutional
budget reserve fund; making appropriations under
art. IX, sec. 17(c), Constitution of the State of
Alaska, from the constitutional budget reserve
fund; and providing for an effective date.
HB 2007 was REPORTED out of Committee with a "do
pass" recommendation.
HOUSE BILL NO. 2001
"An Act setting timelines for issuance of final orders
by the Regulatory Commission of Alaska, amending the
authority of the commission to enter compromise
settlement orders, and extending the commission's
termination date to June 30, 2006; and providing for an
effective date."
Co-Chair Mulder explained that the legislation would extend
the Regulatory Commission of Alaska and was virtually
identical to the version that was previously passed by the
Committee.
Co-Chair Mulder MOVED to report HB 2001 out of Committee
with the accompanying fiscal note. There being NO OBJECTION,
it was so ordered.
CSHB 2001 was REPORTED out of Committee with a "do pass"
recommendation and with a new fiscal impact note by the
Department of Community and Economic Development.
HOUSE BILL NO. 2007
"An Act making an appropriation to reverse the effect
of art. IX, sec. 17(d), Constitution of the State of
Alaska; making an appropriation to balance revenue and
general fund appropriations; making an appropriation to
the Department of Revenue for management of the
constitutional budget reserve fund; making
appropriations under art. IX, sec. 17(c), Constitution
of the State of Alaska, from the constitutional budget
reserve fund; and providing for an effective date."
Co-Chair Mulder explained that HB 2007 would make a separate
appropriation from the Constitutional Budget Reserve (CBR),
as opposed to placement in a capital budget or operating
budget. He explained that an appropriation from the CBR is
needed to pass the budget if there are insufficient funds in
the General Fund to pay for state operating costs. A three-
quarter vote is required: 30 of 40 members in the House.
Without 30 votes, funds contained in the General Fund and
other sub accounts are swept from the General Fund into the
CBR under the debt repayment provisions in the Constitution.
Included in these funds are: Marine Highway Stabilization
Fund, Power Cost Equalization, Alaska Science and Technology
Foundation, and dividends paid by Alaska Industrial
Development and Export Authority (AIDEA) and Alaska Housing
Finance Corporation (AHFC). If these funds are swept into
the CBR, things like water and sewage projects funded by
AHFC in rural Alaska would not be funded.
Representative Bunde pointed out that the legislature has
been using money from the CBR to balance the budget and
cover the fiscal gap. He noted that $5 billion dollars have
been spent in this way and must be paid back when state
revenues are available beyond what is spent.
Co-Chair Mulder MOVED to report HB 2007 out of Committee
with the accompanying fiscal note. There being NO OBJECTION,
it was so ordered.
HB 2007 was REPORTED out of Committee with a "do pass"
recommendation.
HOUSE BILL NO. 2003
"An Act relating to municipal bond reimbursement for
school construction; and providing for an effective
date."
SENATOR JOHN TORGERSON reviewed SCS HB 451 (RLS), which
would be used in the creation of a proposed committee
substitute to HB 2003 [work draft, 22LS1810\C]. The
legislation authorizes local governments to go out to vote
for bonds. He noted that the Senate adopted the following
language:
(1) be
(A) a rural educational attendance area;
(B) a municipal school district and, as of June
30 of the
previous fiscal year, have a population of less
than 1,000; or
(C) a municipal school district that operates
schools on a military reservation; and
Senator Torgerson explained that two local government
reimbursement programs would be established. Existing
programs would be funded at a 70 percent level and the
appropriation would be open-ended for four years. A new
program would be created at 60 percent, which would require
the Department of Education and Early Development to review
the program for compliance. The new language would read:
(11) subject to (h), (i), and (j)(2) - (5) [(j)(2),
(3), (5)] of this section, and after projects funded by
the bonds, notes, or other indebtedness have been
approved by the commissioner, 70 percent of payments
made by a municipality during the fiscal year for the
retirement of principal and interest on outstanding
bonds, notes, or other indebtedness authorized by the
qualified voters of the municipality on or after June
30, 1999, but before July 1, 2006 [July 1, 2008], to
pay costs of school construction, additions to schools,
and major rehabilitation projects and education related
facilities that exceed $200,000, are approved under AS
14.07.020(a)(11), and are not reimbursed under (n) or
(o) of this section;
(12) subject to (h), (i), and (j)(2), (3), and (5)
[(j)(2), (3), (5)] of this section, 60 percent of
payments made by a municipality during the fiscal year
for the retirement of principal and interest on
outstanding bonds, notes, or other indebtedness
authorized by the qualified voters of the municipality
on or after June 30, 1999, but before July 1, 2006, to
pay costs of school construction, additions to schools,
and major rehabilitation projects and education related
facilities that exceed $200,000, are reviewed
[approved] under AS 14.07.020(a)(11), and are not
reimbursed under (n) or (o) of this section.
Senator Torgerson observed that authorization for Fairbanks
was extended from July 1, 2004 to July 1, 2006 on page 8. He
added that July 1, 2008 was also changed to July 1, 2006 on
page 10 lines, 6, 14, and 29. "In the principle amount of at
least $240 million dollars" was deleted on line 25. He
summarized that bonding is contingent on the bond package
passing.
Vice-Chair Bunde questioned who would be excluded under the
grant criteria on page 1. Co-Chair Mulder explained that the
concern with military reservation schools is that they are
not owned by the local school district, which would
therefore be hesitant to contribute local money. The
legislation would upgrade military schools, so that they
could be transferred from the Department of Education and
Early Development to local school districts for
authorization and oversight. Once this occurs the local
school district would own the schools and be responsible for
the upgrade.
ANNALEE MCCONNELL, DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET, OFFICE OF THE GOVERNOR, noted that the version
passed by the Senate (SCS HB 451 (RLS) would not provide
continued funding opportunities for rural schools. The
Administration would support the linking of the two concepts
together [funding for rural and urban schools]. Urban school
districts would be able to direct their own schedules and do
projects on the timing that works best for them. She
observed that in the past there has been a major debt
reimbursement program every few years, the debt
reimbursement programs have driven the timing of schedules
that come under the reimbursement programs. A different
percent of support from local districts would occur
depending on whether the school falls within the current
statutory restrictions or the project addresses future
growth needs.
Co-Chair Williams requested that Ms. McConnel point out
those areas of the bill and provide a spreadsheet for
Committee members. Ms. McConnell replied that she would
provide that information.
Ms. McConnell added that the Administration had support from
the Anchorage School district for the concept of allowing
them to drive their own schedule and work on a statewide
bases. A process for stabilization and easier planning for
school funding would be a benefit, which would be well
received by the state's school districts.
Ms. McConnell observed that the initial recommendation was
to put in place something that could be done in five funding
cycles. The GO bond bill would occur in the first year,
which would address rural schools. Anchorage and Juneau
already have projects approved by the voters. Other
communities, such as the Mat-Su Borough, would just be
getting their processes underway to do their bond issuance
over this cycle. Five years was picked in order to get past
the "first shot at all of this" and allow school districts
to work the process into their planning cycles.
HB 2003 was heard and HELD in Committee for further
consideration.
HOUSE BILL NO. 2002
"An Act relating to the issuance of general obligation
bonds for the purpose of paying the cost of design,
construction, and major maintenance of educational and
museum facilities; and providing for an effective
date."
Co-Chair Williams observed that HB 2002 duplicates
legislation previously sent to the Senate.
Co-Chair Mulder noted that a proposed House Finance
Committee substitute would be prepared, which would adopt
the Senate Finance Committee version. He explained that the
Senate Finance Committee version funded projects 1 - 10 on
the new school construction list and appropriated $61
million dollars for University upgrades and $5 million
dollars for the museum.
HB 2002 was heard and HELD in Committee for further
consideration.
ADJOURNMENT
The meeting was adjourned at 6:07 PM
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