Legislature(1995 - 1996)

05/01/1995 01:50 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                           MAY 1, 1995                                         
                            1:50 P.M.                                          
                                                                               
  TAPE HFC 95 - 108, Side 1, #000 - end.                                       
  TAPE HFC 95 - 108, Side 2, #000 - #290.                                      
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair Richard  Foster called the House  Finance Committee                 
  meeting to order at 1:50 P.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                                                                 
                                                                               
  John  Bitney,  Staff,  Representative  Terry  Martin;  Terry                 
  Otness,  Staff, Senator  Robin Taylor; Tom  Williams, Staff,                 
  Senator  Steve  Frank;   Dan  Fauske,  Corporate   Executive                 
  Officer, Alaska  Housing Finance Corporation,  Department of                 
  Revenue;   William   Howe,  Deputy   Commissioner,  Treasury                 
  Division, Department of Revenue.                                             
                                                                               
  SUMMARY                                                                      
  SB  1     An Act relating to state implementation of federal                 
            statutes.                                                          
                                                                               
            HCS CS  SB 1 (FIN)  was reported out  of Committee                 
            with a "do pass" recommendation  and with a fiscal                 
            note by the  Department of Law  and a zero  fiscal                 
            note by the Senate Finance Committee dated 3/2/95.                 
  SB 92     An  Act  requiring  that,   in  addition  to   its                 
            operating  budget, all  activities  of the  Alaska                 
            Housing  Finance Corporation  are  subject to  the                 
            Executive Budget Act.                                              
                                                                               
            HCS CS SB 92 (FIN)  was reported out of  Committee                 
            with "no recommendation"  and with  a zero  fiscal                 
            note by the Department of Revenue dated 3/1/95.                    
                                                                               
  SENATE BILL 92                                                               
                                                                               
                                1                                              
                                                                               
                                                                               
       "An Act requiring  that, in  addition to its  operating                 
       budget, all  activities of  the Alaska  Housing Finance                 
       Corporation are subject to the Executive Budget Act."                   
                                                                               
  Representative Martin MOVED to adopt work draft #9-LS0762\M,                 
  Chenoweth,  5/1/95,  as the  version  before  the Committee.                 
  There being NO OBJECTIONS, it was so ordered.                                
                                                                               
  JOHN BITNEY, STAFF,  REPRESENTATIVE TERRY MARTIN,  explained                 
  that the work draft addressed language as recommended by the                 
  Subcommittee.   The language  will spell  out the  new items                 
  provided in the Executive Budget Act for the Alaska  Housing                 
  Finance Corporation (AHFC).   That information was  included                 
  in the new subsection (D).   He added that an  amendment had                 
  been  prepared  to  address  the  exemptions  referenced  in                 
  Section (F).  [Attachment #1].                                               
                                                                               
  Representative   Martin   MOVED  to   adopt   Amendment  #1.                 
  Representative   Therriault   OBJECTED   for   purposes   of                 
  discussion.                                                                  
                                                                               
  DAN  FAUSKE,  CORPORATE  EXECUTIVE  OFFICER  (CEO),   ALASKA                 
  HOUSING   FINANCE   CORPORATION,   DEPARTMENT  OF   REVENUE,                 
  commented  that the  refinancing  concern would  be remedied                 
  through  the  amendment.    That  language would  allow  for                 
  service   of  the  mortgage  loans  and  foreclosures  while                 
  providing the flexibility  needed to  remain in the  market,                 
  capitalize on savings and allow the  corporations to be in a                 
  position to react quickly in the bond market.                                
                                                                               
  Representative Parnell questioned the scope of Section  2(A)                 
  contained within the  amendment.  Mr. Fauske  explained that                 
  within the budget two numbers would  be provided; one in the                 
  front end  (D) and the  other in (F).   Mr. Bitney responded                 
  that  the  5% loan  program  was  financed with  the  use of                 
  arbitrage earnings.    He referenced  the adopted  committee                 
  substitute, Line 10 (C), indicating the exempted portion.                    
                                                                               
  Representative  Brown  asked  how   the  proposed  committee                 
  substitute had  changed from the State Affairs version.  Mr.                 
  Bitney  replied  that  there had  not  been  any substantive                 
  changes.    He  continued,  under  the House  State  Affairs                 
  version,  the two loan programs were  exempt from the review                 
  procedures.  Current language  dictates that the Legislature                 
  would provide an aggregate appropriation number for the loan                 
  permits.  He added  that there are new exemptions  listed in                 
  Amendment #1.                                                                
                                                                               
  Representative Brown asked how the multi-family loan portion                 
  of  the bill would  be addressed.  Mr.  Bitney said that had                 
  been referenced  in Subsection  (E), Page  2, Line  3.   The                 
                                                                               
                                2                                              
                                                                               
                                                                               
  appropriation would be divided into  two parts; an aggregate                 
  appropriation for the  loan programs in which  a subsidy was                 
  not provided and also (E) would provide an appropriation for                 
  all  the  "other"  loan   programs  including  multi-family.                 
  Representative Martin  understood that language  would allow                 
  the bill to be more "open".                                                  
                                                                               
  Representative Brown questioned why portions of the bill had                 
  been deleted.  Mr.  Fauske pointed out that he  prefered the                 
  last bill, although  through the  course of negotiation,  it                 
  became apparent that the language addressing AHFC would need                 
  to become more "stringent".   He summarized that a  position                 
  had  been accomplished within the proposed legislation which                 
  would not bind the corporation upward and which would permit                 
  it to continue to function.                                                  
                                                                               
  Representative Brown  asked if opportunities would  be lost.                 
  Mr. Fauske felt that there would  continue to be enough lead                 
  time in order for the Legislative Budget and Audit Committee                 
  (LBA)  to  explain  the  case   when  the  amount  of  money                 
  stipulated in  the front  section might  not be  sufficient.                 
  The propsed legislation needs  additional work, although  it                 
  would be  "doable".  Mr. Fauske anticipated that this year's                 
  loan  activity  would  be  $350-$400  million dollars.    He                 
  understood  that  the  Legislature  would  appropriate  that                 
  amount each year for loan programs.                                          
                                                                               
  Representative Brown asked if AHFC's corporate dollars would                 
  be incorporated as well as the funds bonded for.  Mr. Fauske                 
  noted  that  was  correct.    He  added that  based  on  the                 
  companies appropriated estimates, that dollar amount will be                 
  in  the  front  end of  the  budget.    Representative Brown                 
  disagreed  with  that concept.    Mr. Fauske  understood the                 
  concern.      Representative  Martin   explained   that  the                 
  Legislature has  complete authority  over appropriations  as                 
  stipulated in Article 9.                                                     
                                                                               
  WILLIAM  HOWE,  DEPUTY   COMMISSIONER,  TREASURY   DIVISION,                 
  DEPARTMENT OF  REVENUE, responded to  Representative Brown's                 
  concern.  He noted that the intent of  the language would be                 
  that the  Legislature will review  all of the  loan programs                 
  that AHFC carries as part of  their oversight process.  With                 
  the  multi-family  housing  loan  and special-needs  housing                 
  projects   and  programs  will   be  reviewed   through  the                 
  Legislature.  Both  last year and this year,  those programs                 
  consume  approximately $50  million  dollars of  AHFC money,                 
  raised through new  bond issues.  The  Legislature will have                 
  the right to review those programs.  The amendment clarifies                 
  that once  the scope of the total  activities is determined,                 
  AHFC  can  operate  freely  within  those  boundaries.    He                 
  stressed  that  the  Legislature will  not  get  involved in                 
  funding individual projects.                                                 
                                                                               
                                3                                              
                                                                               
                                                                               
  Representative Brown  asked the distinction  between (a)1(D)                 
  and  2(A).   Mr.  Howe stated  that  2(A) would  provide the                 
  ability to float bonds and borrow money for bond issues.  He                 
  continued,  Section  1(D)  only deals  with  the  lending of                 
  money.    Representative Brown  voiced  confusion about  the                 
  source of the money; she thought  that they both represented                 
  the same funds.   Mr. Howe explained that Section  1(D), the                 
  lending  of money, the  authorization is only  related to an                 
  aggregate amount and provides the Legislature the ability to                 
  review  programs.   If  the programs  are  supported by  the                 
  Legislature,  then  the  aggregate   amount  for  all  those                 
  programs  will be given to AHFC  to function.  How they fund                 
  those  loans  will  be  a  function  of  corporate  receipts                 
  acquired from past loan payments,  interest earnings as well                 
  as floating bonds.                                                           
                                                                               
  TOM  WILLIAMS, STAFF,  SENATOR  STEVE FRANK,  commented that                 
  Senator Frank requested that the bill return to the original                 
  Senate   version   or  some   modified   version  of   that.                 
  Representative  Martin noted  that the  committee substitute                 
  would represent the "middle ground" on the legislation.                      
                                                                               
  Representative Therriault WITHDREW THE OBJECTION to adopting                 
  Amendment #1.   Representative  Brown pointed  out that  the                 
  amendment would  need a  semi colon  following the  language                 
  "obligation" in Section  (A).  Representative  Parnell noted                 
  that Section (B) would need an apostrophe in "corporations".                 
  There being NO further OBJECTIONS, Amendment #1 was adopted.                 
                                                                               
  Representative Martin MOVED to report HCS CS SB 92 (FIN) out                 
  of Committee  with individual recommendations  and with  the                 
  accompanying fiscal notes.  There being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
  HCS CS SB 92  (FIN) was reported  out of Committee with  "no                 
  recommendation"  and  with   a  zero  fiscal  note   by  the                 
  Department of Revenue dated 3/1/95.                                          
  SENATE BILL 1                                                                
                                                                               
       "An  Act  relating to  state implementation  of federal                 
       statutes."                                                              
                                                                               
  TERRY  OTNESS, STAFF,  SENATOR  ROBIN  TAYLOR, testified  in                 
  support of SB  1.  He stated  that SB 1 was  introduced as a                 
  companion measure to  SJR 7, the Tenth  Amendment resolution                 
  which  has   already  passed   the   Legislature  and   been                 
  transmitted to the  Governor.   The resolution demands  that                 
  Congress stop the practice of passing federal mandates which                 
  exceed  Congressional authority  under the  Tenth Amendment.                 
  He added  that SB 1 would be  an attempt to identify federal                 
                                                                               
                                4                                              
                                                                               
                                                                               
  mandates, both statutory and regulatory, which conflict with                 
  State policy or exceed Constitutional limitations.                           
                                                                               
  Mr. Otness commented in order to  accomplish that goal, SB 1                 
  would require  an annual review  by the executive  branch of                 
  each program mandated by Congress.   An annual report to the                 
  Governor  and  the Legislative  Budget  and  Audit Committee                 
  would   set  forth   conclusions   and   would   then   make                 
  recommendations  for  changes  in federal  law  to  make the                 
  program consistent with state policy.                                        
                                                                               
  Representative  Brown spoke  to Amendment  #1.   [Attachment                 
  a thorough review every  four years rather than every  year.                 
  Section (B) would stipulate that when there is a new federal                 
  law or requirement imposed, a review of "only" that material                 
  would be required.                                                           
                                                                               
  Representative  Martin  recommended  dividing Amendment  #1.                 
  Representative  Brown explained that she had requested Legal                 
  Services to draft the amendment in order that a review would                 
  be provided every  four years and  when there was  something                 
  new added, it  would be reviewed.   She understood that  the                 
  amendment would  cover that request.   Representative Mulder                 
  agreed that the comprehensive review for the first year made                 
  sense,  although  questioned  the  timeliness  to  each  new                 
  mandate.  He felt  anytime there were new changes,  it would                 
  not  be  too cumbersome  for  each department  to  provide a                 
  review of those  changes.  Representative Brown  agreed with                 
  Representative Mulder.                                                       
                                                                               
  (Tape Change, HFC 95-108, Side 2).                                           
                                                                               
  Representative Parnell recommended  adopting the  amendment.                 
  Representative Martin stated that he would rather divide the                 
  question.   He felt  that four years  would be too  long and                 
  that  annually  would be  too  often.   Representative Brown                 
  noted that on Page  2, Line 23, there  was a "time  certain"                 
  for the annual  review.  The reason that the  date was added                 
  in  the amendment, was  to clarify which  year it  was to be                 
  submitted.  Representative Martin reiterated that four years                 
  would be too long to wait for the information.                               
                                                                               
  Representative  Brown   MOVED   to   adopt   Amendment   #1.                 
  Representative Martin MOVED  TO DIVIDE Amendment #1.   There                 
  being NO OBJECTION, it was divided.                                          
                                                                               
  Representative  Brown MOVED  to adopt 1(A).   Representative                 
  Martin OBJECTED.  He recommended that the time be changed to                 
  three  years.   Representative  Navarre  remarked  that  the                 
  report was being  given too  much attention and  focus.   He                 
  stressed that  administrative ability  was being  reduced as                 
                                                                               
                                5                                              
                                                                               
                                                                               
  was the  department's ability  to manage.   He advised  that                 
  with the  proposed  legislation, additional  costs  will  be                 
  placed on those departments.                                                 
                                                                               
  A roll call was taken on the MOTION to adopt Section 1(A).                   
                                                                               
       IN FAVOR:      Therriault,   Brown,   Martin,   Mulder,                 
                      Navarre, Parnell                                         
       OPPOSED:       Kohring                                                  
                                                                               
  Representatives  Hanley,  Kelly,  Hanley,  Foster  were  not                 
  present for the vote.                                                        
                                                                               
  The MOTION PASSED (6-1).                                                     
                                                                               
  Representative Mulder  MOVED  to adopt  1(B), Amendment  #1.                 
  There being NO OBJECTION, it was adopted.                                    
                                                                               
  Representative Parnell MOVED an amendment  change to Page 3,                 
  Line 15, adding the language "and the Legislature" following                 
  the word  "Governor".   There  being  NO OBJECTION,  it  was                 
  adopted.                                                                     
                                                                               
  Representative Parnell MOVED to report HCS CS SB 1 (FIN) out                 
  of Committee  with individual recommendations  and with  the                 
  accompanying   Senate   Finance   Committee   fiscal   note.                 
  Representative Brown  pointed out  that  the Senate  Finance                 
  Committee  had  zeroed  out  all  the  fiscal  notes.    She                 
  recommended  that the  Committee consider  passing  a fiscal                 
  note for the  Department of  Law.  She  stressed that  their                 
  role  will  become  more  difficult   with  passage  of  the                 
  legislation and that  they will need  to support all of  the                 
  departments.  She  stressed that the Department  of Law will                 
  have specific duties.   She  reminded members  of the  large                 
  operating budget reduction made to the civil division within                 
  that Department.                                                             
                                                                               
  Representative Parnell also MOVED to adopt the Department of                 
  Law fiscal note.  There being  NO OBJECTION, the SFC and the                 
  Department  of  Law fiscal  notes  were adopted  as  well as                 
  reporting the bill from Committee.                                           
                                                                               
  Representative  Navarre  commented  that  the Department  of                 
  Health and  Social Services  will have  fiscal impact  also,                 
  although he opted not move the fiscal note.                                  
                                                                               
  HCS CS SB 1 (FIN) was  reported out of Committee with a  "do                 
  pass" recommendation and with fiscal notes by the Department                 
  of Law and the Senate Finance Committee dated 3/2/95.                        
  ADJOURNMENT                                                                  
                                                                               
                                                                               
                                6                                              
                                                                               
                                                                               
  The meeting adjourned at 2:45 P.M.                                           
                                                                               
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                           MAY 1, 1995                                         
                            1:50 P.M.                                          
                                                                               
  TAPE HFC 95 - 108, Side 1, #000 - end.                                       
  TAPE HFC 95 - 108, Side 2, #000 - #290.                                      
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair Richard Foster  called the House  Finance Committee                 
  meeting to order at 1:50 P.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                                                                 
                                                                               
  John  Bitney,  Staff,  Representative  Terry  Martin;  Terry                 
  Otness, Staff, Senator  Robin Taylor;  Tom Williams,  Staff,                 
  Senator  Steve   Frank;  Dan  Fauske,   Corporate  Executive                 
  Officer, Alaska  Housing Finance Corporation,  Department of                 
  Revenue;   William   Howe,  Deputy   Commissioner,  Treasury                 
  Division, Department of Revenue.                                             
                                                                               
  SUMMARY                                                                      
                                                                               
  SB  1     An Act relating to state implementation of federal                 
            statutes.                                                          
                                                                               
            HCS  CS SB 1  (FIN) was reported  out of Committee                 
            with a "do pass" recommendation  and with a fiscal                 
            note by  the Department of  Law and a  zero fiscal                 
            note by the Senate Finance Committee dated 3/2/95.                 
                                                                               
  SB 92     An   Act  requiring  that,   in  addition  to  its                 
            operating  budget, all  activities  of the  Alaska                 
            Housing  Finance  Corporation are  subject  to the                 
            Executive Budget Act.                                              
                                                                               
            HCS CS  SB 92 (FIN) was reported  out of Committee                 
            with "no  recommendation" and  with a zero  fiscal                 
            note by the Department of Revenue dated 3/1/95.                    
                                                                               
                                                                               
                                7                                              
                                                                               
                                                                               
  SENATE BILL 92                                                               
                                                                               
       "An Act requiring  that, in  addition to its  operating                 
       budget, all  activities of the  Alaska Housing  Finance                 
       Corporation are subject to the Executive Budget Act."                   
                                                                               
  Representative Martin MOVED to adopt work draft #9-LS0762\M,                 
  Chenoweth,  5/1/95,  as  the version  before  the Committee.                 
  There being NO OBJECTIONS, it was so ordered.                                
                                                                               
  JOHN BITNEY,  STAFF, REPRESENTATIVE TERRY  MARTIN, explained                 
  that the work draft addressed language as recommended by the                 
  Subcommittee.   The  language will spell  out the  new items                 
  provided in  the Executive Budget Act for the Alaska Housing                 
  Finance Corporation (AHFC).   That information was  included                 
  in  the new subsection (D).  He  added that an amendment had                 
  been  prepared  to  address  the  exemptions  referenced  in                 
  Section (F).  [Attachment #1].                                               
                                                                               
  Representative   Martin  MOVED   to   adopt  Amendment   #1.                 
  Representative   Therriault   OBJECTED   for   purposes   of                 
  discussion.                                                                  
                                                                               
  DAN  FAUSKE,  CORPORATE   EXECUTIVE  OFFICER  (CEO),  ALASKA                 
  HOUSING   FINANCE   CORPORATION,   DEPARTMENT  OF   REVENUE,                 
  commented  that the  refinancing concern  would be  remedied                 
  through  the  amendment.    That  language would  allow  for                 
  service  of  the  mortgage  loans   and  foreclosures  while                 
  providing the flexibility  needed to  remain in the  market,                 
  capitalize on savings and allow the  corporations to be in a                 
  position to react quickly in the bond market.                                
                                                                               
  Representative Parnell questioned the  scope of Section 2(A)                 
  contained within the  amendment.  Mr. Fauske  explained that                 
  within the budget two numbers would  be provided; one in the                 
  front end (D) and  the other in  (F).  Mr. Bitney  responded                 
  that  the  5% loan  program  was  financed with  the  use of                 
  arbitrage  earnings.   He referenced  the adopted  committee                 
  substitute, Line 10 (C), indicating the exempted portion.                    
                                                                               
  Representative  Brown  asked  how  the  proposed   committee                 
  substitute had changed from the  State Affairs version.  Mr.                 
  Bitney  replied  that  there had  not  been  any substantive                 
  changes.    He  continued,  under  the House  State  Affairs                 
  version, the two  loan programs were exempt from  the review                 
  procedures.  Current language dictates that the  Legislature                 
  would provide an aggregate appropriation number for the loan                 
  permits.  He added  that there are new exemptions  listed in                 
  Amendment #1.                                                                
                                                                               
  Representative Brown asked how the multi-family loan portion                 
  of the bill  would be addressed.   Mr. Bitney said  that had                 
                                                                               
                                8                                              
                                                                               
                                                                               
  been referenced  in Subsection  (E), Page  2, Line  3.   The                 
  appropriation would be divided into  two parts; an aggregate                 
  appropriation for the loan programs  in which a subsidy  was                 
  not provided and also (E) would provide an appropriation for                 
  all  the  "other"  loan  programs  including   multi-family.                 
  Representative Martin  understood that language  would allow                 
  the bill to be more "open".                                                  
                                                                               
  Representative Brown questioned why portions of the bill had                 
  been deleted.  Mr.  Fauske pointed out that he  prefered the                 
  last bill, although  through the  course of negotiation,  it                 
  became apparent that the language addressing AHFC would need                 
  to become  more "stringent".  He summarized  that a position                 
  had been accomplished within the  proposed legislation which                 
  would not bind the corporation upward and which would permit                 
  it to continue to function.                                                  
                                                                               
  Representative Brown  asked if opportunities  would be lost.                 
  Mr. Fauske felt that there would  continue to be enough lead                 
  time in order for the Legislative Budget and Audit Committee                 
  (LBA)  to  explain  the  case  when  the   amount  of  money                 
  stipulated in  the front  section might  not be  sufficient.                 
  The  propsed legislation needs  additional work, although it                 
  would be "doable".  Mr.  Fauske anticipated that this year's                 
  loan  activity  would  be  $350-$400  million dollars.    He                 
  understood  that  the  Legislature  would  appropriate  that                 
  amount each year for loan programs.                                          
                                                                               
  Representative Brown asked if AHFC's corporate dollars would                 
  be incorporated as well as the funds bonded for.  Mr. Fauske                 
  noted  that  was  correct.    He  added that  based  on  the                 
  companies appropriated estimates, that dollar amount will be                 
  in  the  front end  of  the  budget.   Representative  Brown                 
  disagreed  with  that concept.    Mr. Fauske  understood the                 
  concern.     Representative   Martin   explained  that   the                 
  Legislature  has complete  authority over  appropriations as                 
  stipulated in Article 9.                                                     
                                                                               
  WILLIAM  HOWE,  DEPUTY   COMMISSIONER,  TREASURY   DIVISION,                 
  DEPARTMENT OF REVENUE,  responded to Representative  Brown's                 
  concern.  He noted that the intent of the language  would be                 
  that the  Legislature will review  all of the  loan programs                 
  that AHFC carries as part of  their oversight process.  With                 
  the multi-family  housing  loan  and  special-needs  housing                 
  projects  and   programs  will   be  reviewed   through  the                 
  Legislature.   Both last year  and this year, those programs                 
  consume  approximately $50  million dollars  of AHFC  money,                 
  raised through new bond issues.   The Legislature will  have                 
  the right to review those programs.  The amendment clarifies                 
  that once the scope  of the total activities is  determined,                 
  AHFC  can  operate  freely  within  those  boundaries.    He                 
  stressed  that  the  Legislature will  not  get  involved in                 
                                                                               
                                9                                              
                                                                               
                                                                               
  funding individual projects.                                                 
                                                                               
  Representative Brown  asked the distinction  between (a)1(D)                 
  and  2(A).   Mr.  Howe stated  that  2(A) would  provide the                 
  ability to float bonds and borrow money for bond issues.  He                 
  continued,  Section  1(D)  only deals  with  the  lending of                 
  money.    Representative Brown  voiced  confusion  about the                 
  source of the money; she thought that they  both represented                 
  the same funds.   Mr. Howe explained that Section  1(D), the                 
  lending of money,  the authorization is  only related to  an                 
  aggregate amount and provides the Legislature the ability to                 
  review programs.    If the  programs  are supported  by  the                 
  Legislature,   then  the  aggregate  amount  for  all  those                 
  programs will be  given to AHFC to function.   How they fund                 
  those  loans  will  be  a  function  of  corporate  receipts                 
  acquired from past loan payments,  interest earnings as well                 
  as floating bonds.                                                           
                                                                               
  TOM  WILLIAMS, STAFF,  SENATOR STEVE  FRANK, commented  that                 
  Senator Frank requested that the bill return to the original                 
  Senate   version   or  some   modified   version   of  that.                 
  Representative Martin  noted that  the committee  substitute                 
  would represent the "middle ground" on the legislation.                      
                                                                               
  Representative Therriault WITHDREW THE OBJECTION to adopting                 
  Amendment #1.   Representative  Brown pointed  out that  the                 
  amendment would  need a  semi colon  following the  language                 
  "obligation" in Section  (A).  Representative Parnell  noted                 
  that Section (B) would need an apostrophe in "corporations".                 
  There being NO further OBJECTIONS, Amendment #1 was adopted.                 
                                                                               
  Representative Martin MOVED to report HCS CS SB 92 (FIN) out                 
  of Committee  with individual  recommendations and  with the                 
  accompanying fiscal notes.  There being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
  HCS CS  SB 92 (FIN) was  reported out of  Committee with "no                 
  recommendation"  and  with   a  zero  fiscal  note   by  the                 
  Department of Revenue dated 3/1/95.                                          
                                                                               
  SENATE BILL 1                                                                
                                                                               
       "An  Act relating  to state  implementation  of federal                 
       statutes."                                                              
                                                                               
  TERRY  OTNESS, STAFF,  SENATOR  ROBIN TAYLOR,  testified  in                 
  support of  SB 1.  He stated  that SB 1 was  introduced as a                 
  companion measure to  SJR 7, the Tenth  Amendment resolution                 
  which   has   already  passed   the  Legislature   and  been                 
  transmitted to the  Governor.   The resolution demands  that                 
  Congress stop the practice of passing federal mandates which                 
  exceed Congressional  authority under  the Tenth  Amendment.                 
                                                                               
                               10                                              
                                                                               
                                                                               
  He added that SB  1 would be an attempt to  identify federal                 
  mandates, both statutory and regulatory, which conflict with                 
  State policy or exceed Constitutional limitations.                           
                                                                               
  Mr. Otness commented in order to  accomplish that goal, SB 1                 
  would require  an annual review  by the executive  branch of                 
  each program mandated by Congress.   An annual report to the                 
  Governor  and  the  Legislative Budget  and  Audit Committee                 
  would   set   forth   conclusions   and   would  then   make                 
  recommendations  for  changes  in federal  law  to  make the                 
  program consistent with state policy.                                        
                                                                               
  Representative Brown  spoke to  Amendment  #1.   [Attachment                 
  a thorough review  every four years rather  than every year.                 
  Section (B) would stipulate that when there is a new federal                 
  law or requirement imposed, a review of "only" that material                 
  would be required.                                                           
                                                                               
  Representative  Martin  recommended  dividing Amendment  #1.                 
  Representative Brown explained that she  had requested Legal                 
  Services to draft the amendment in order that a review would                 
  be provided  every four years  and when there  was something                 
  new added, it  would be reviewed.   She understood that  the                 
  amendment would  cover that request.   Representative Mulder                 
  agreed that the comprehensive review for the first year made                 
  sense,  although  questioned  the  timeliness  to  each  new                 
  mandate.  He felt  anytime there were new changes,  it would                 
  not  be too  cumbersome  for each  department  to provide  a                 
  review of those  changes.  Representative Brown  agreed with                 
  Representative Mulder.                                                       
                                                                               
  (Tape Change, HFC 95-108, Side 2).                                           
                                                                               
  Representative Parnell recommended  adopting the  amendment.                 
  Representative Martin stated that he would rather divide the                 
  question.   He  felt that four  years would be  too long and                 
  that  annually  would be  too  often.   Representative Brown                 
  noted that  on Page 2, Line  23, there was a  "time certain"                 
  for the annual review.   The reason that the date was  added                 
  in the amendment,  was to clarify  which year it  was to  be                 
  submitted.  Representative Martin reiterated that four years                 
  would be too long to wait for the information.                               
                                                                               
  Representative   Brown   MOVED   to  adopt   Amendment   #1.                 
  Representative Martin MOVED  TO DIVIDE Amendment #1.   There                 
  being NO OBJECTION, it was divided.                                          
                                                                               
  Representative Brown MOVED  to adopt  1(A).   Representative                 
  Martin OBJECTED.  He recommended that the time be changed to                 
  three  years.    Representative  Navarre  remarked that  the                 
  report was being  given too  much attention and  focus.   He                 
                                                                               
                               11                                              
                                                                               
                                                                               
  stressed that  administrative ability  was being reduced  as                 
  was the  department's ability  to manage.   He  advised that                 
  with  the proposed  legislation,  additional  costs will  be                 
  placed on those departments.                                                 
                                                                               
  A roll call was taken on the MOTION to adopt Section 1(A).                   
                                                                               
       IN FAVOR:      Therriault,   Brown,   Martin,   Mulder,                 
                      Navarre, Parnell                                         
       OPPOSED:       Kohring                                                  
                                                                               
  Representatives  Hanley,  Kelly,  Hanley,  Foster  were  not                 
  present for the vote.                                                        
                                                                               
  The MOTION PASSED (6-1).                                                     
                                                                               
  Representative  Mulder MOVED  to adopt  1(B), Amendment  #1.                 
  There being NO OBJECTION, it was adopted.                                    
                                                                               
  Representative Parnell MOVED an amendment  change to Page 3,                 
  Line 15, adding the language "and the Legislature" following                 
  the  word  "Governor".   There  being NO  OBJECTION,  it was                 
  adopted.                                                                     
                                                                               
  Representative Parnell MOVED to report HCS CS SB 1 (FIN) out                 
  of Committee  with individual  recommendations and  with the                 
  accompanying   Senate   Finance   Committee   fiscal   note.                 
  Representative  Brown  pointed out  that the  Senate Finance                 
  Committee  had  zeroed  out  all  the  fiscal  notes.    She                 
  recommended that  the  Committee consider  passing a  fiscal                 
  note for the  Department of  Law.  She  stressed that  their                 
  role  will  become  more  difficult   with  passage  of  the                 
  legislation and that  they will need  to support all of  the                 
  departments.  She stressed  that the Department of  Law will                 
  have specific  duties.  She  reminded members  of the  large                 
  operating budget reduction made to the civil division within                 
  that Department.                                                             
                                                                               
  Representative Parnell also MOVED to adopt the Department of                 
  Law fiscal note.  There being NO OBJECTION,  the SFC and the                 
  Department  of Law  fiscal  notes were  adopted  as well  as                 
  reporting the bill from Committee.                                           
                                                                               
  Representative Navarre  commented  that  the  Department  of                 
  Health and  Social Services  will have  fiscal impact  also,                 
  although he opted not move the fiscal note.                                  
                                                                               
  HCS CS  SB 1 (FIN) was reported out  of Committee with a "do                 
  pass" recommendation and with fiscal notes by the Department                 
  of Law and the Senate Finance Committee dated 3/2/95.                        
                                                                               
  ADJOURNMENT                                                                  
                                                                               
                               12                                              
                                                                               
                                                                               
  The meeting adjourned at 2:45 P.M.                                           
                                                                               
                                                                               
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