Legislature(2013 - 2014)
03/14/2013 03:21 PM House FIN
| Audio | Topic |
|---|---|
| Start | |
| HB87 | |
| HB50 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
March 14, 2013
3:21 p.m.
3:21:57 PM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 3:21 p.m.
MEMBERS PRESENT
Representative Alan Austerman, Co-Chair
Representative Bill Stoltze, Co-Chair
Representative Mark Neuman, Vice-Chair
Representative Mia Costello
Representative Bryce Edgmon
Representative Les Gara
Representative Lindsey Holmes
Representative Scott Kawasaki, Alternate
Representative Cathy Munoz
Representative Steve Thompson
Representative Tammie Wilson
MEMBERS ABSENT
Representative David Guttenberg
ALSO PRESENT
Representative Pete Higgins, Fairbanks; Thomas Studler,
Staff, Representative Higgins; Kris Curtis, Legislative
Auditor, Legislative Budget and Audit; Diane Burnham,
Legislative Auditor, Legislative Budget and Audit; Patrick
Pillai, Executive Director, Special Education Service
Agency; PJ Ford Slack, Principal, Sitka High School and
Chair, SESA; Millie Ryan, Executive Director, REACH; Daniel
George, Staff, Co-Chair Stoltze; Stacy Shuber, Director,
Government Affairs and Public Relations.
PRESENT VIA TELECONFERENCE
Craig Ward, Ketchikan; Jeremiah Pickett, Special Education
Services, Buckland ; Georgia Lansing, Delta/Greely School
District, Delta Junction; Tammy Boutte, Special Education
Services, Salana; Marilyn Rosene, Principal of Dillingham
Elementary; Esther Bennet, Adak; Eric Havelock, Multi-
Family Underwriting Supervisor, AHFC.
SUMMARY
HB 50 MULTI-UNIT HOUSING: COMMERCIAL USE
CSHB 50 (FIN) was REPORTED out of committee with
a "do pass" recommendation and with one
previously published zero fiscal note: FN1 (REV).
HB 87 EXTEND SPECIAL EDUCATION SERVICE AGENCY
HB 87 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 87
"An Act extending the special education service
agency; and providing for an effective date."
3:22:58 PM
REPRESENTATIVE PETE HIGGINS, FAIRBANKS, introduced the
legislation. He explained that the Special Education
Service Agency (SESA) supported the education of children
with Low Incidence Disabilities (LID) in rural areas. He
recommended the extension of the program and the sunset
through June 30, 2021.
3:24:16 PM
THOMAS STUDLER, STAFF, REPRESENTATIVE HIGGINS was available
to answer questions about the bill.
3:24:58 PM
KRIS CURTIS, LEGISLATIVE AUDITOR, LEGISLATIVE BUDGET AND
AUDIT, apologized because she was sick and her voice was
suffering. She introduced her audit manager to provide her
talking points.
3:25:38 PM
DIANE BURNHAM, LEGISLATIVE AUDITOR, LEGISLATIVE BUDGET AND
AUDIT, presented Ms. Curtis' talking points.
The division of Legislative Audit conducted a sunset
review of the Special Education Services Agency also
known as SESA and issued our report last year. The
main objective of the audit was to determine if the
agency was operating in the public interest and
whether its termination date should be extended.
We conclude that SESA is serving a public need and is
essential in meeting the Federal law that requires the
State ensure that all children with disabilities have
available to them a free appropriate public education
that meets their unique needs. SESA serves over 200
students located in mostly non-urban locations through
its low incidence disabilities program.
We recommend extending SESA's termination date until
June 30, 2021. However, our recommendation for
extension comes with recommendations to improve
collaboration and oversight.
The biggest issue facing SESA is the flat funding of
its Low Incidence Disability program. The funding
level is set in statute and hasn't been increased in
14 years thereby decreasing the real value of its
budget by 36 percent. This has made it difficult to
hire qualified staff. SESA's unique organizational
structure has left it with no mechanism for seeking an
increase to its budget during the annual budgetary
process. SESA's funding as identified in the public
school funding statute provides an amount per student
as the a "not less than" amount. Since SESA's funding
comes from the public school funding statutes, it is
funded through DEED. DEED could ask for increases as
part of its annual budget process but has chosen not
to do so since SESA reports to the Governor's Council
on Disabilities and Special Education which is
organizationally located within the Department of
Health and Social Services. DEED management does not
consider their department's responsible for monitoring
the adequacy of SESA's budget.
The Governor's council did support legislation to
increase SESA's during the past session but the bill
was not successful.
In recommendation No. 1 of the report, we hold DEED
management accountable for monitoring SESA because
DEED is responsible for fulfilling the federal law
regarding special education. Because DEED is the
entity the ultimately must meet the federal
requirement, it should be taking a more active role in
monitoring SESA. We recommend that DEED management
and SESA management collaborate to ensure SESA is
operating and funded as intended by the legislature.
DEED's commissioner does not agree with the
recommendation. Historically the funding for SESA has
been a legislative process and he sees no need for a
change. DEED does not want to be held accountable for
SESA's operations.
And we understand his viewpoint since the oversight
responsibility for SESA is fragmented and confusing.
Which brings me to the Auditor's Comments section of
the report. In the Auditor's Comments section of the
report, we discuss SESA's organizational structure
which has led to confusion as to oversight
responsibility for funding and monitoring SESA. SESA
is a nonprofit corporation created by statute to
report to the Governor's Council on Disabilities and
Special Education. It must report to the Governor's
Council, however, the council does not have budgetary
authority over SESA. As a component of public school
funding, SESA's main program, its Low Incidence
Disabilities program, is funded through DEED.
To further complicate matters, as a nonprofit
corporation, SESA has its own bylaws and its own board
of directors.
The Auditor's Comments Section of the audit explains
SESA's organizational structure and highlights the
need for legislative clarification as to which entity
should be held accountable.
The audit contains a second recommendation addressed
to SESA's board president to revise board policies and
improve SESA board oversight. There has been a fairly
recent change in the executive director position and
the board president has already initiated changes to
help improve oversight.
3:28:52 PM
Ms. Burnham detailed the auditor's comments. The comments
discussed SESA's organizational structure, which led to
confusion regarding the oversight responsibility for
funding and monitoring SESA. She added that SESA was a non-
profit corporation created by statute to report to the
Governor's Council on Disabilities and Special Education.
The council, however, did not have budgetary authority over
SESA. As a component of public school funding, SESA's main
program was funded through Department of Education and
Early Development (DEED). As a non-profit corporation, SESA
had its own bylaws and board of directors. The auditor's
comment section of the audit explained SESA's
organizational structure and highlighted the need for
legislative clarification as to which entity should be held
accountable. The audit contained a second recommendation
addressed to SESA's board president to revise board
policies and improve the SESA board oversight. She
mentioned a recent change in the executive director
position and the board president had initiated changes to
help improve oversight.
3:30:10 PM
Representative Wilson asked if the Commissioner of
education was present for questions.
Co-Chair Stoltze confirmed that a DEED representative was
present at the hearing.
Representative Wilson recalled much discussion in the
subcommittee process regarding SESA and their ideal
location. She asked how the auditors would determine the
best placement for SESA regarding program authority and
oversight.
Ms. Curtis replied that the decision was policy driven. The
audit determined that the structure was working. The
highlighted aspect of the audit addressed the flat funding
problem, which compromised the program and led to a LB&A
report.
3:31:24 PM
CRAIG WARD, KETCHIKAN (via teleconference), urged the
committee to reauthorize the funding for SESA. He stated
that he was the parent of a child with trisomy 18. He
explained the details of her disabilities. He offered
gratitude for a country that offered a free and appropriate
public education for all children. He noted that prior to
SESA's involvement his local school in Ketchikan was unable
to determine how best to help his daughter because her
needs were beyond the scope of their training. He spoke to
the frustration about educating his daughter. He explained
that SESA offered optimism, new ideas and hope for his
daughter and family. Because of SESA, the child now had an
educational plan for her future. He urged an increase in
SESA's funding to allow the sharing of information with
more districts throughout the state.
3:34:37 PM
JEREMIAH PICKETT, SPECIAL EDUCATION SERVICES, BUCKLAND
(via teleconference), testified in support of SESA. He
explained that he was from a rural village and was born
blind. He urged the committee to authorize funding for
SESA, which provided an integral part of his life and
education. He stated that the specialists at SESA taught
him how to accomplish mobility and navigation and he would
not be able to get around as well without the help.
3:36:20 PM
GEORGIA LANSING, DELTA/GREELY SCHOOL DISTRICT, DELTA
JUNCTION (via teleconference), testified in support of the
legislation. She explained that she was a special education
teacher with a master's degree in learning disabilities.
She explained that her school district in Delta Junction
recently saw an increase in LID students. She noted that
she was overwhelmed with the task of meeting the needs of
students with such a wide and varied range of learning
difficulties including LID. She stated that she was
empowered by the organization. She shared a story about a
student delivered to her classroom with needs greater than
her education had prepared her for. She benefitted from the
help from SESA, which enabled students with LID to become
more competent.
3:40:12 PM
TAMMY BOUTTE, SPECIAL EDUCATION SERVICES, SALANA (via
teleconference), testified that son was autistic and SESA
helped her son to begin communicating and therefore learn
in the classroom. She stated that SESA helped with travel
by teaching her family how to react and behave in the
airport.
3:42:45 PM
PATRICK PILLAI, EXECUTIVE DIRECTOR, SPECIAL EDUCATION
SERVICE AGENCY, provided a brief PowerPoint presentation.
He began with slide 1: "Special Education Service Agency
(SESA).
SESA provides consultation and training to support the
unique educational needs of individuals and the
Alaskan communities that serve them.
Mr. Pillai discussed slide 2: "Background."
· Created in 1986; formed as a not-for-profit
Corporation;
· Governed by the Alaska Governor's Council on
Disabilities and Special Education;
· Receive Low Incidence Disabilities funding
through DEED based on prior years statewide total
enrollment;
Mr. Pillai explained that SESA was not included in Base
Student Allocation (BSA) calculations and had a lack of
funding for the last 15 years. He stated that many people
were confused and thought that SESA was a part of BSA or a
school district.
Mr. Pillai commented on slide 3: "Individuals with
Disabilities Education Act (IDEA 2004)."
The State is required to meet the mandate of IDEA 2004
to "ensure that all children with disabilities have
available to them a free appropriate public education
that emphasizes special education and related services
designated to meet their unique needs."
The Legislature intended for SESA to help DEED fulfill
this requirement by assisting schools with providing
special education to children experiencing LID.
Mr. Pillai discussed slide 4: "A.S. 14.30.630(b) (1)
requires SESA to provide the following special education
services."
A. Itinerant outreach services to students who are deaf,
deaf-blind, mentally retarded, hearing impaired, blind
and visually impaired, orthopedically disabled,
health-impaired in other ways, and severely
emotionally disturbed, and to students with multiple
disabilities;
B. Special education instructional support and training
of local school district special education personnel;
and
C. Other service appropriate to special education needs.
3:47:24 PM
Mr. Pillai explained slide 5: A picture of a vision
specialist working with a child in rural Alaska.
Mr. Pillai discussed slide 6: "Total Number of Students
Served." He stated that SESA served 270 students with LID.
He explained that the needs of the district determined the
number of specialists in the area. Most schools had a
special education teacher, but the uniqueness of the
disability sometimes required help from a SESA specialist.
He provided an example of a disability that led to severe
and multiple infractions of behavior.
3:48:24 PM
Mr. Pillai described slide 7: "SESA Services."
· Itinerant service
· In-service training
· Alaska State Special Education Conference
· Courses designed and offered for university credit
· Alaska State Deaf Education Advisory Board
· Governor's Council/Rural Education/Autism/ Early
Intervention
· AARC/BTKH/DSI
· Other Non-profits - Stone Soup/Center for Human
Development/ILP
· Distance Education
3:49:24 PM
Mr. Pillai commented on slide 8: The screen shot of the
SESA website, which was recently redesigned and illustrated
links available to those students with LID and the staff
that work with them.
Mr. Pillai discussed slide 9: The picture depicted a
specialist working with a child with LID in rural Alaska.
Mr. Pillai described slide 10: "SESA FY 12 Student
Consultation by District." The graph captured student
consultation in each one of the districts. He mentioned the
Bering Strait School District (BSSD), which used SESAs
services frequently. He added that SESA might serve
anywhere from 39 to 45 school districts from year to year.
3:50:44 PM
Mr. Pillai discussed slide 11: "Legislative Audit Report."
Recommendation #1
Reiteration from the prior report that the Legislature
should review SESA funding; and
"Over the past 14 years, school districts have
received increases in their funding formula, yet
SESA's funding formula has not increased. …the
historical process for evaluating and increasing SESA
funding has been a legislative process…"
Mr. Pillai added that SESA would be forced to reduce three
specialists in the next year if the organization did not
receive funding increases. He reminded that the inflation
index affected SESA by 36 percent over the last 15 years.
He added that the specialist hired by SESA were invested in
working with students with LID, so much that they slept on
the floor when travelling to rural Alaska. He compared SESA
specialists' earnings with those of teachers in the
Anchorage School District (ASD) and noted that at entry
level, SESA specialists earned $6000 - $9000 less annually
than the ASD teacher. The specialists were identified and
recruited for their expertise and SESA employed one teacher
with a PhD in autism from Boston University, which was
helpful as autism had increased more than 1000 percent in
Alaska. Well trained specialists were more difficult to
recruit when they were paid so much less. He stated that
the specialists also contributed 30 percent of their
earnings for medical insurance premiums.
3:52:27 PM
Mr. Pillai discussed slide 12: "This graph shows how LID
student count has increased while SESA's overall funding
has decreased due to decreased ADM." The graph depicted
SESA's actual funding compared to funding if equivalent to
BSA compared to Student Count. The red bars in the graph
depicted the amount of funding that would have come to SESA
if it had been equivalent to BSA.
Co-Chair Stoltze recommended that the discussion be held in
the education subcommittee process.
Mr. Studler stated that the will of the sponsor was to move
the bill from committee to extend the sunset date.
3:53:40 PM
Representative Wilson argued the fact that SESA was funded
through DEED, with oversight from DHSS. She opined that
without oversight, the funding should not be routed through
DEED. She was unsure about the proper solution, but
advocated for further investigation of SESA's placement.
She stressed that she understood the value of SESA and
supported the program, but wanted to detail the funding
organization for budgetary reasons.
Co-Chair Stoltze expressed that the conversation was tardy,
as the operating budget had passed out of the House
already.
3:55:04 PM
Representative Kawasaki hoped that Mr. Pillai could address
the LB&A audit.
Mr. Pillai stated that the process was funded by the
legislature and the Governor's Council determined that the
system was working and did not require change. He added
that DEED focused more on compliance, where SESA focused on
service. He added that the state administrator of special
education sat on the SESA board and attended every meeting
and received a full report of every board meeting along
with an annual report.
Co-Chair Stoltze requested further information.
Representative Kawasaki noted the audit's comments that
board meetings failed to have public notice and DEED staff
did not consistently attend meetings. He wondered if the
practices had changed with the release of the audit.
Mr. Pillai replied that all of the audit's concerns were
addressed and DEED was present at all board meetings for
the last 18 months.
3:57:32 PM
Vice-Chair Neuman pointed out various issues detailed in
the audit along with commentary from SESA. He understood
the recommendation that the legislature review their
oversight responsibility. He opined that the program was
great and funding must be used appropriately. He suggested
extending the date for a shorter period to allow for more
frequent legislative review. He wished for further
committee discussion.
Mr. Pillai responded that SESA had clean fiscal audits. The
LB&A audit was also clean in terms of finances. The
previous executive director did enter into a contract with
her husband with board approval. He pointed out that the
arrangement did not lead to fiscal implications.
3:59:58 PM
Representative Edgmon stated that he worked with auditors
regularly outside of his legislative efforts. He supported
the program, but listed the deficiencies cited in the
audit. He stated that he didn't understand that the
structure of the SESA program. He pointed out that SESA
funding was not adequately evaluated by DEED for
operational needs and the operating plan did not comply
with state statutes. He stated that both findings were
material. He asked how to better structure the program. He
asked for recommendations from SESA's executive director.
Mr. Pillai replied that DEED did not take responsibility
for increasing revenue to SESA as the Governor's Council on
Disabilities and Special Education had oversight. The
department opined that legislative appropriation was the
proper method of increasing funding. He stressed that SESA
remained in an awkward place where they were told that they
were a good agency and they would benefit from the funding,
but always confusion regarding the legislative
appropriation versus funding from DEED. The audit pointed
to the area of confusion.
4:02:10 PM
Representative Edgmon asked about SESA's classification.
Mr. Pillai replied that SESA was a political subdivision of
the state.
Representative Edgmon asked if the bylaws and budgets were
governed by the Governor's Council on Disabilities or by
DEED.
Mr. Pillai replied that a minimum of five and maximum of
seven members from the Governor's Council on Disabilities
were required to serve on the board. The state director of
special education had a mandatory position on the board as
well.
Co-Chair Stoltze stated that he planned to review the
legislation further in the committee in further meetings.
4:04:05 PM
MARILYN ROSENE, PRINCIPAL OF DILLINGHAM ELEMENTARY (via
teleconference), explained that SESA's staff worked well
with her school. She stated that her district was unable to
serve the children with LID without SESA's help. She noted
that her district employed SESA resources over the last six
years from behavior specialists, which helped transition
students from elementary to middle school. She added that
SESA's help allowed students to remain in the community.
She spoke to SESA's specialist's quality training.
4:06:41 PM
PJ FORD SLACK, PRINCIPAL, SITKA HIGH SCHOOL AND CHAIR,
SESA, explained that when she began her position as board
chair, she soon found that an inappropriate contract was
initiated by the former director of SESA in 2011. She noted
that the director was removed and Mr. Pillai was hired. She
mentioned working with the School Board Association to
assure that all of the current SESA board members were
trained in correct public and board policy. She mentioned
that in 2012, Joseph Reeves reviewed the board's policy and
the board received training regarding audit reports. She
promised that the board would follow proper procedure under
her lead.
Representative Munoz asked about the "intensive-funding"
rate. She wondered if the district shared a portion of the
"intensive-funding" with SESA.
Ms. Slack replied that the district was not allowed to
share the funds because SESA was not allowed to establish
fees as a non-profit organization. She added that students
identified with LID were not necessarily "intensive-funded"
students.
Co-Chair Stoltze remarked that passage of HJR 1 might
enable the sharing of funds.
Representative Munoz asked about the difference between the
"intensive-funding" rate and the special education funding
rate in the BSA.
Ms. Slack replied that she would do her best. She stated
that "intensive-funding" was specific to Alaska and
appropriated by the legislature. She explained that
"intensive-funded" students must meet at least five or six
criteria and LID students had rare and infrequent
disabilities that required very specific help. She
mentioned a student with LID funding who did not have arms.
She noted that he was not an "intensive-funded" student.
4:11:13 PM
Representative Munoz asked for a rough estimate of
"intensive-funding" versus regular special education
funding rates.
Ms. Slack replied that the director of finance for DEED
could better answer the question.
4:12:07 PM
MILLIE RYAN, EXECUTIVE DIRECTOR, REACH, stated that she
served as an ex officio member of SESA in her prior
position as executive director of the Alaska Governor's
Council on Disabilities and Special Education. She
addressed the question about SESA's location in the
council. Upon creation of SESA, the council served as a
special education advisory panel and SESA was a special
education program. The council, located in DHSS became
designated as a special education advisory panel because
the legislature, at the time, did not want to establish
another board with a narrow purpose. Because the council
had the similar purpose, it was chosen. The council
received regular reports on SESA during meetings and the
education committee received the same communication. She
admitted that the situation was awkward, but she understood
that SESA was located in DEED because SESA provided an
education service.
Representative Wilson asked if SESA might receive oversight
from DEED alone.
Ms. Ryan stated that the situation was awkward because the
council looked for funding changes for SESA and made
recommendations regarding the Alaska Mental Health Trust
Authority, which represented people with developmental
disabilities. She added that the council provided an
advocacy role that the state board of education might not
address as thoroughly.
4:15:49 PM
Representative Kawasaki asked about the timing. He
understood that some SESA employees had contracts that were
set to expire.
Ms. Ryan agreed that an assurance was necessary for the
teachers.
4:16:40 PM
ESTHER BENNET, ADAK (via teleconference), explained that
her son had benefitted greatly from SESA's involvement in
his education. She mentioned that she served on the school
board and was aware that the agency had not had a funding
increase in 15 years. She stated that her son waited for
SESA's services and she wondered if the wait resulted from
the lack of funding increases. She suggested that committee
members get to know SESA specialists. She explained that
travel around Alaska was unpredictable and wondered if that
might explain board member absences. She expressed
gratitude that her son had access to the services from
SESA.
4:19:31 PM
Co-Chair Stoltze closed public testimony.
HB 87 was HEARD and HELD in committee for further
consideration.
4:20:02 PM
AT EASE
4:21:27 PM
RECONVENED
HOUSE BILL NO. 50
"An Act authorizing the Alaska Housing Finance
Corporation to allow certain commercial uses in a
multi-unit residential housing development owned or
financed by the corporation and limiting the Alcoholic
Beverage Control Board's issuance of certain licenses
to premises in the residential housing development."
4:21:42 PM
Representative Costello MOVED to ADOPT the proposed
committee substitute for HB 50, Work Draft, 28-LS0155/C,
Strasbaugh, 3/14/13 (FIN). Co-Chair Stoltze OBJECTED for
discussion.
DANIEL GEORGE, STAFF, CO-CHAIR STOLTZE, explained the
changes in the CS. He noted the change on the final page,
which removed the wording between lines 9 and 17, "the
corporation may not authorize the commercial use of space
in a multi-unit residential housing development owned or
financed by the corporation for the manufacture, sale,
transfer or storage of cigarettes or tobacco products"
replaced with "the corporation may not authorize the
commercial use of space in a multi-unit residential housing
development owned or financed by the corporation for a
business that primarily sells, transfers, or stores
cigarettes or tobacco related products.
There being NO FURTHER OBJECTION, it was so ordered,
Version C was ADOPTED.
4:23:15 PM
Representative Costello explained that the bill allowed the
Alaska Housing Finance Corporation (AHFC) to authorize the
combination of commercial use and multi-unit residential
housing developments owned or financed by the corporation.
She pointed out three sections of the bill. Under the
authorizations allowed to the corporations, "the addition
of the ability for AHFC to authorize certain commercial
uses in a multi-unit residential housing development owned
or financed by the corporation."
Representative Costello added that the final section of the
bill excluded certain types of businesses such as
charitable gaming, adult entertainment, the sale of
alcoholic beverages, unless the sale occurs with a
restaurant licensed under the alcohol beverage control
board as a restaurant. The first section of the bill was
new and allowed the ABC board to approve a request for a
new location if AHFC approved a business in one of the
multi-unit housing areas. She explained that the purpose of
the bill was to allow more flexibility for multi-unit
housing in Alaska. She mentioned other communities that
utilized commercial use space in buildings, which allowed
residents to benefit from the commercial properties and
allowed AHFC greater flexibility when pursuing more
affordable housing for Alaskans.
4:25:10 PM
STACY SHUBER, DIRECTOR, GOVERNMENT AFFAIRS AND PUBLIC
RELATIONS, explained that AHFC was involved in mortgages,
bonds, financing, public housing and energy programs. The
mortgage and investment aspect of the business supported
the diversity of work at AHFC. She explained that the bill
would help meet the need for more housing across
communities and helping the corporation to strengthen their
position financially.
Ms. Shuber explained that AHFC's family loan program
performed well and remained an important tool for
construction of new, safe, quality and affordable multi-
unit housing. She stated that AHFC supported the
legislation and urged the committee's support.
4:26:03 PM
Representative Wilson asked about the exclusions and
whether they were tied to federal grants.
Representative Costello replied that the exclusions were
not mandated by the relationship between the federal
government and AHFC. The exclusions were included in the
legislation to promote family-friendly living environments.
4:26:49 PM
Representative Wilson asked if other communities were using
the model. She wished to better understand the family-
friendly portion of the legislation.
Representative Costello replied that AHFC could best speak
to community models. She added that there was a trend
across the country to incorporate commercial and housing
opportunities. She was unsure about exact statistics
regarding these types of housing opportunities.
Representative Wilson stated that she supported the
commercial portion of the legislation, but wanted to remain
flexible with the language.
4:27:48 PM
Representative Kawasaki agreed that the proposed housing
trends were infectious in the Lower 48. He asked if similar
units were overseen in Alaska by AHFC.
Ms. Shuber referred to the Inlet Tower Hotel, which was
included in AHFC's portfolio. She noted that a property in
the Mountain View subdivision in Anchorage resulted from a
partnership between AHFC and Cook Inlet Housing and
included retail shops on the bottom of the building and
housing units on the top.
Representative Kawasaki asked if AHFC must fill a void in
the area because of the need for housing.
Ms. Shuber replied that AHFC saw the opportunity to address
housing issues in Kodiak, Anchorage, Nome and Barrow. She
highlighted that the commercial space made the housing
options more affordable across all income levels.
Co-Chair Stoltze asked if Mountain View would have similar
options without AHFC and Cook Inlet Housing.
Ms. Shuber replied that she did not know the answer to the
question.
4:30:01 PM
Representative Edgmon asked about the charitable gaming
element of the bill and the potential restrictions implied.
He pointed out that rural Alaskan communities utilized
gaming for fundraising purposes, and senior housing
facilities employed similar routines.
4:30:29 PM
Ms. Shuber replied that AHFC did not have a position on the
gaming and profitability aspect of HB 50. She supposed that
gaming might affect the profitability of a business in
certain circumstances, but AHFC did not speculate without a
proposed project to detail.
Representative Costello responded that the bill provided a
tremendous opportunity for businesses. The intent of the
exclusion was to provide for a family-friendly environment
in the facility.
Representative Edgmon did not know if the restriction might
provide an unintended impediment in rural Alaska.
4:31:57 PM
Co-Chair Stoltze asked if the restriction might prevent a
senior center from hosting a bingo event.
Ms. Shuber referred the question to an AHFC underwriter.
ERIC HAVELOCK, MULTI-FAMILY UNDERWRITING SUPERVISOR, AHFC
(via teleconference), commented that venues for charitable
gaming were sometimes located near the corporation's
housing projects but typically not within the facility. He
stated that a senior center would have bingo night and
pull-tab operations. He stated that AHFC did not have a
position on the gaming operations.
Co-Chair Stoltze understood the corporation's neutrality.
Mr. Havelock stated that he had witnessed gaming utilized
in other projects outside of the residential housing.
4:33:15 PM
Representative Munoz asked about developments that were tax
exempt under city or municipal code. She assumed that the
owner would be liable for the property tax due to the
commercial portion of the property. She wondered how the
division of property assessment was addressed by the
corporation.
Ms. Shuber requested Mr. Havelock's opinion.
Mr. Havelock stated that the local tax authority would
determine the taxing structure for the business and housing
unit. A municipality could offer a tax exemption for real
property taxes. The taxation of the commercial space would
be determined by each municipality.
4:34:31 PM
Co-Chair Stoltze understood that bingo and other events
constituted common fundraising opportunities. He suggested
a conceptual amendment to strike the charitable gaming
language from the bill.
Representative Gara offered a conceptual amendment:
Delete "charitable gaming under AS 05.15," page 6,
line 11.
There being NO OBJECTION, it was so ordered. The conceptual
amendment was adopted.
4:36:29 PM
Representative Costello highlighted one zero fiscal note
from Department of Revenue (DOR).
4:37:16 PM
Representative Costello MOVED to REPORT CSHB 50 (FIN) out
of committee with individual recommendations and the
accompanying fiscal note.
CSHB 50 (FIN) was REPORTED out of committee with a "do
pass" recommendation and with one previously published zero
fiscal note: FN1 (REV).
ADJOURNMENT
The meeting was adjourned at 4:38 p.m.
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