Legislature(1995 - 1996)

05/05/1995 08:40 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                           MAY 5, 1995                                         
                            8:40 A.M.                                          
                                                                               
  TAPE HFC 95 - 113, Side 1, #000 - end.                                       
  TAPE HFC 95 - 113, Side 2, #000 - #476.                                      
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair  Mark Hanley  called  the  House Finance  Committee                 
  meeting to order at 8:40 A.M.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Kohring                         
  Co-Chair Foster               Representative Martin                          
  Representative Mulder         Representative Navarre                         
  Representative Brown          Representative Parnell                         
  Representative Grussendorf    Representative Therriault                      
  Representative Kelly                                                         
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Senate  President Drue  Pearce;  Dan  Twohing, Marine  Pilot                 
  Coordinator,   Department   of    Commerce   and    Economic                 
  Development; Wendy Redman, University  Relations, University                 
  of  Alaska;  Senator  Bert Sharp;  Jerry  McBeath, Fairbanks                 
  North Star  Borough  Board of  Education, Fairbanks;  Wilson                 
  Condon,  Commissioner,  Department of  Revenue;  Dan Fauske,                 
  C.E.O., Alaska  Housing Finance  Corporation, Department  of                 
  Revenue.                                                                     
                                                                               
  SUMMARY                                                                      
                                                                               
  SB 88     An  Act establishing a  pilot program  for charter                 
            schools; and providing for an effective date.                      
                                                                               
            CS SB 88 (FIN) was reported out of Committee  with                 
            a "do pass" recommendation and  with a fiscal note                 
            by the Department of Education dated 3/9/95.                       
                                                                               
  SB 130    An Act relating to marine pilots and the  Board of                 
            Marine Pilots;  extending the termination  date of                 
            the Board of  Marine Pilots; and providing  for an                 
            effective date.                                                    
                                                                               
            CS SB 130 (RLS) was HELD in Committee for  further                 
            consideration.                                                     
                                                                               
  HB 281    An Act  ratifying an agreement between  the Alaska                 
                                                                               
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            Housing Finance Corporation  and the  commissioner                 
            of  revenue and making  certain pledges to obliges                 
            of  the  corporation  regarding   that  agreement;                 
            relating to the authorization for and the issuance                 
            of bonds by the Alaska Housing Finance Corporation                 
            to pay for the costs  of repair and rehabilitation                 
            of student housing facilities of the University of                 
            Alaska; and providing for an effective date.                       
                                                                               
            HB  281  was  placed in  Subcommittee  with  Chair                 
            Representative     Therriault      and     members                 
            Representative Martin and Representative Brown.                    
                                                                               
  HB 309    An Act approving the University  of Alaska's plans                 
            to  enter  into  long-term obligations  to  borrow                 
            money from the Alaska  Housing Finance Corporation                 
            for the acquisition of student housing facilities;                 
            and providing for an effective date.                               
                                                                               
            HB 309  was  placed  in  Subcommittee  with  Chair                 
            Representative   Therriault   and   with   members                 
            Representative Martin and Representative Brown.                    
  SENATE BILL 130                                                              
                                                                               
       "An  Act relating  to  marine pilots  and the  Board of                 
       Marine  Pilots; extending  the termination date  of the                 
       Board of Marine Pilots; and  providing for an effective                 
       date."                                                                  
                                                                               
  SENATE  PRESIDENT DRUE  PEARCE spoke in  support of  SB 130.                 
  She noted that  SB 130 was designed  to extend the  Board of                 
  Marine Pilots  and to  provide housekeeping  changes to  the                 
  Marine Pilotage Act of  1991 aimed at reducing the  level of                 
  litigation surrounding  the  marine  pilotage  industry  and                 
  providing  a stable  regulatory environment  for determining                 
  rate for pilotage services.                                                  
                                                                               
  Senator Pearce added that the legislation was  the result of                 
  extensive negotiations and  compromises between pilots,  the                 
  shipping industry and  the Administration.   The legislation                 
  is  supported  by  all  of those  groups.    Senator  Pearce                 
  concluded  that  passage of  SB  130 would  ensure  that the                 
  health, safety  and welfare of  the Alaskan people  would be                 
  met through the  State's regulation and oversight  of marine                 
  pilotage.                                                                    
                                                                               
  Representative  Brown  asked the  changes  made which  would                 
  affect liability.                                                            
                                                                               
  DAN  TWOHING,   MARINE  PILOT  COORDINATOR,   DEPARTMENT  OF                 
  COMMERCE  AND  ECONOMIC  DEVELOPMENT,   responded  that  the                 
                                                                               
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  changes involved for  the liability for marine pilots in the                 
  1991 bill was  limited to $250  thousand dollars.  That  law                 
  was written to relate to anything  the pilot could have done                 
  to  have  a sanction  for the  license.   He  concluded that                 
  amount of money given a major marine accident would diminish                 
  rapidly.  The  pilots, through  the Alaska Pilots  Alliance,                 
  requested to have the  statute amended so that  pilots would                 
  loose  their  liability only  in  incidence of  proven gross                 
  negligence  or  incompetence  resulting  from  chemicals  or                 
  alcohol.   Any remaining  items for  which they could  loose                 
  liability were removed.                                                      
                                                                               
  Representative Brown thought  that "incompetence" was  being                 
  removed.   Mr. Twohing advised that incompetence is a matter                 
  of  law.   Within the  scope of  maritime investigation  and                 
  prosecutions,  the real question  would be  gross negligence                 
  which could lead to an incompetent situation.  He added that                 
  the  actual  word  "incompetence"  was  too  vague  for  the                 
  Department of Law.                                                           
                                                                               
  Representative  Mulder asked  how  the proposed  legislation                 
  would promote  competition.   Senator Pearce commented  that                 
  the 1991 Law created competition  amongst pilotage groups in                 
  so much as it  allowed for separate groups.   Currently, two                 
  separate groups exist.                                                       
                                                                               
  Representative  Mulder  questioned the  need  of a  pilotage                 
  group.   Mr. Twohing  explained that  State licensed  marine                 
  pilots  have  knowledge  of  the  waters and  ship  handling                 
  experience.    That  information  is  in  the  State's  best                 
  interest  and   that  pilots   "speak"  the   same  language                 
  internationally.                                                             
                                                                               
  Representative Therriault asked  if there was  opposition to                 
  the legislation in the various pilot groups.  Senator Pearce                 
  explained that each pilot group  had compromised their needs                 
  and  that  SB  130  was   legislation  resulting  from  that                 
  compromise and was supported by all interests.                               
                                                                               
  SB 130 was HELD in Committee for further consideration.                      
  HOUSE BILL 309                                                               
                                                                               
       "An Act approving  the University of Alaska's  plans to                 
       enter into  long-term obligations to borrow  money from                 
       the  Alaska   Housing  Finance   Corporation  for   the                 
       acquisition   of   student   housing  facilities;   and                 
       providing for an effective date."                                       
                                                                               
  Representative Martin spoke in support of HB 309.  He stated                 
  that  HB  309 was  in response  to  the current  shortage of                 
  student  housing  at  the  University  of  Alaska  statewide                 
                                                                               
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  system.  Specifically, the  University of Alaska,  Anchorage                 
  campus houses only  7% of  the full-time student  population                 
  compared to the national average ranging from 35-50% housing                 
  accommodation.  Coupled  with the  shortage, is the  limited                 
  housing  at  the  Juneau  campus  of University  of  Alaska,                 
  Southeast  (UAS), and  the  absence of  any  housing at  the                 
  Ketchikan campus.                                                            
                                                                               
  He added that  the University of  Alaska has the ability  to                 
  repay  the  principal  of  the  money borrowed  from  Alaska                 
  Housing Finance Committee (AHFC), although they cannot raise                 
  housing rates sufficient to pay market interest  rates.  The                 
  proposed legislation would solve that problem.                               
                                                                               
  WENDY   REDMAN,   VICE-PRESIDENT,    UNIVERSITY   RELATIONS,                 
  UNIVERSITY  OF ALASKA, noted  that the  proposed legislation                 
  was the culmination of several years discussion with AHFC in                 
  trying  to find an  appropriate way that  they could involve                 
  themselves with the University and the housing problem.  She                 
  pointed out that University students fall within the preview                 
  of the old Alaska State Housing Authority  (ASHA) portion of                 
  AHFC.                                                                        
                                                                               
  This legislation would allow  AHFC to go forward so  that it                 
  would be consistent  with their mission.   Ms. Redman  added                 
  that a proposal has been worked out that would allow AHFC to                 
  go forward with  the University providing the  debt service.                 
  The  legislation would require AHFC  to let 3% revenue bonds                 
  to help with the housing interest  rate subsidy.  Ms. Redman                 
  emphasized  that AHFC from  the very  beginning has  made it                 
  clear to the University  that unless HB 281 is  also passed,                 
  AHFC will not be in a position to help the University.                       
                                                                               
  She continued that passage of  the legislation would provide                 
  to the Anchorage area a total of six hundred new beds plus a                 
  commons  facility  for eating.    She referenced  the Juneau                 
  area, noting the  less than .5%  vacancy rate, pointing  out                 
  how restricted housing is  for incoming student.                             
                                                                               
  HB 309 was HELD in Committee for further discussion.                         
  SENATE BILL 88                                                               
                                                                               
       "An  Act  establishing  a  pilot  program  for  charter                 
       schools; and providing for an effective date."                          
                                                                               
  SENATOR BERT SHARP testified  in support of CS SB  88 (FIN).                 
  He stated that the issue of charter schools was discussed at                 
  length  during  the  two  years  of  the  18th  Legislature.                 
  Unfortunately, charter schools was  just one part of SB  61,                 
  which in all aspects  was an "omnibus education bill".   The                 
  bill tried to  address diverse  issues, each  of which  were                 
                                                                               
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  controversial  and  in   some  way  tainted  the   other  by                 
  association.                                                                 
                                                                               
  He  continued  that  all charter  school  proposals  must be                 
  submitted to the  local school  board for consideration  and                 
  upon their approval,  forwarded to  the Commissioner of  the                 
  Department of Education  for review and compliance  to state                 
  law.   All  staffing of charter  schools must  be done  on a                 
  volunteer basis.                                                             
                                                                               
  Senator Sharp added  that a charter school  would not dilute                 
  the  amount  of money  available  to school  districts other                 
  schools.    By  challenging  students  to achieve  at  their                 
  highest capabilities, the  charter schools may lead  the way                 
  to a more  effective education system for  the next century.                 
  He urged the Committee to support  the legislation.  Senator                 
  Sharp noted that the project would sunset in ten years.                      
                                                                               
  Co-Chair  Hanley asked if the  project would be optional for                 
  each school district.  Senator Sharp stated that it would be                 
  optional and would need to be approved by each school board.                 
  Co-Chair Hanley referenced Section 3,  Page 3, which implies                 
  that the  local school  board would  "have"  to provide  the                 
  charter school with  a budget.   He asked  if that  language                 
  would require the school district to  have a charter school.                 
                                                                               
                                                                               
  Senator Sharp noted that the  application for charter school                 
  would need to be submitted by the group to the school board.                 
  The school board would then consider the entire packet.  Co-                 
  Chair Hanley reiterated  that he  understood that the  local                 
  school board would  have to  forfeit to the  State Board  of                 
  Education applications for  a charter school that  have been                 
  "approved or  denied".   Senator Sharp  emphasized that  the                 
  intent of the  legislation defines that the  Commissioner of                 
  Education  would  have  to approve  the  agreement  that the                 
  charter group  would  meet the  statutory  requirements  for                 
  public education.                                                            
                                                                               
  Representative  Grussendorf  expressed   concern  with   the                 
  financial obligation of deferred maintenance for the charter                 
  schools and asked if  those causes would be binding  for the                 
  State.   Senator Sharp replied  that the school district can                 
  at any  point terminate the  contract if the  charter school                 
  deviated from the prescribed budget.                                         
                                                                               
  Representative Brown questioned if there would be any change                 
  on the teachers'  tenure accumulation requirements  or their                 
  employment  conditions.    Senator  Sharp   noted  that  any                 
  teachers participating in the  charter school program  would                 
  continue  to be subject  to collective  bargaining agreement                 
  terms  and  would continue  to  be employees  of  the school                 
                                                                               
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  district.                                                                    
                                                                               
  Representative Brown  asked if religious education  would be                 
  authorized through the proposed legislation.  Senator  Sharp                 
  pointed out that Page 4, Line 14, specified that the charter                 
  school would be "nonsectarian".                                              
                                                                               
  JERRY  MCBEATH,   FAIRBANKS  NORTH  STAR  BOROUGH  BOARD  OF                 
  EDUCATION, FAIRBANKS, spoke in support of CS SB 88 (FIN) and                 
  urged Committee members to support the legislation.                          
                                                                               
  (Tape Change, HFC 95-113, Side 2).                                           
                                                                               
  Representative Therriault MOVED to report CS SB 88 (FIN) out                 
  of Committee  with individual  recommendations and with  the                 
  accompanying fiscal note.                                                    
                                                                               
  CS  SB 88 (FIN)  was reported  out of  Committee with  a "do                 
  pass"  recommendation  and   with  a  fiscal  note   by  the                 
  Department of Education dated 3/9/95.                                        
  HOUSE BILL 281                                                               
                                                                               
       "An  Act  ratifying  an agreement  between  the  Alaska                 
       Housing  Finance  Corporation and  the  commissioner of                 
       revenue and making  certain pledges  to obliges of  the                 
       corporation regarding  that agreement; relating  to the                 
       authorization  for  and the  issuance  of bonds  by the                 
       Alaska Housing Finance Corporation to pay for the costs                 
       of  repair   and  rehabilitation  of   student  housing                 
       facilities of  the University of Alaska;  and providing                 
       for an effective date."                                                 
                                                                               
  HOUSE BILL 309                                                               
                                                                               
       "An Act approving  the University of Alaska's  plans to                 
       enter  into long-term obligations  to borrow money from                 
       the  Alaska   Housing  Finance   Corporation  for   the                 
       acquisition   of   student   housing  facilities;   and                 
       providing for an effective date."                                       
                                                                               
  Co-Chair Hanley noted that HB 281 and HB 309 would be placed                 
  in Subcommittee  with Representative Therriault as Chair and                 
  with members Representative Martin and Representative Brown.                 
                                                                               
                                                                               
  Representative  Mulder  asked the  long  term plans  for the                 
  University of  Alaska Southeast  (UAS).   He indicated  that                 
  campus  was  not  affordable  and suggested  spending  those                 
  requested funds in  other locations.   Ms. Redman  responded                 
  that  the  Juneau campus  has  intentionally been  kept very                 
  small and focused.  It offers  only undergraduate degrees in                 
                                                                               
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  four  different  areas.   She pointed  out  that it  was the                 
  strongest campus in terms of student growth.                                 
                                                                               
  She added that students from Southeast Alaska do not want to                 
  move  to  Fairbanks,  pointing out  the  low  enrollments of                 
  Southeast  students  moving to  Anchorage  or Fairbanks  for                 
  school.  Ms. Redman  noted that most of those  students tend                 
  to go  "outside" if they do not  attend UAS.  She emphasized                 
  that the long term plan for Juneau would be to keep it small                 
  and focused.                                                                 
                                                                               
  Representative Mulder asked  the number of students  that go                 
  to UAS.  Ms. Redman noted that there were approximately 2000                 
  students.  Representative Kelly asked if there was a loss to                 
  the state by the  number of students that leave  for school.                 
  Ms.  Redman  replied  that  students  that leave  the  state                 
  usually do  not return which  results in  a net loss  to the                 
  State.                                                                       
                                                                               
  Representative  Mulder asked  the total cost  per university                 
  student at each  of the three  campuses.  Ms. Redman  stated                 
  that the tuition  was the same at all campuses.   The Juneau                 
  campus does cost the  State less than the cost  of Anchorage                 
  or Fairbanks.   She added that  cost was reflective of  what                 
  UAS offers, with no laboratory courses,  faculty are paid on                 
  a lower wage rate and no graduate programs.                                  
                                                                               
  Representative Martin pointed out that  last year a detailed                 
  study had  been provided on  the costs associated  with each                 
  campus.  Ms. Redman stated that the Southeast campus was the                 
  most efficient campus with the lowest administrative cost.                   
                                                                               
  Representative Therriault  questioned the fiscal note.   Ms.                 
  Redman explained that  the $970.2  thousand dollars was  the                 
  appropriation amount and represented the University's  share                 
  of the debt  service on the  dormitories in Anchorage.   The                 
  University is required  to get authorization to spend any of                 
  their own debt service that  exceeds over $1 million dollars                 
  per year on a revenue bond.                                                  
                                                                               
  Representative  Kohring asked  if  the University  supported                 
  combining  the  two bills.    Ms.  Redman advised  that  the                 
  preference  would  be  to leave  the  pieces  of legislation                 
  separate and that HB 309 would  be contingent on the passage                 
  of HB 281.                                                                   
                                                                               
  Representative Kohring asked  what the bond rate  would have                 
  been if it had not been subsidized.  Ms. Redman replied that                 
  the  rate would  be close to  6.7%.   Representative Kohring                 
  pointed out that would be an interest rate subsidy.                          
                                                                               
  WILSON CONDON, COMMISSIONER, DEPARTMENT OF REVENUE, spoke in                 
                                                                               
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  support  of  HB 281.    He  stated that  the  bill  had been                 
  introduced  by  the  Governor.   He  provided  the Committee                 
  members  with  a  position  paper  regarding  the  statewide                 
  system.  [Attachment #1].  He also provided members with the                 
  "University of Alaska Deferred Maintenance" brochure.  [Copy                 
  on file].                                                                    
                                                                               
  Representative Martin commented on the deferred  maintenance                 
  costs of  student  housing.   Commissioner Condon  explained                 
  that deferred maintenance would need  to be housing related.                 
                                                                               
                                                                               
  DAN FAUSKE, (TESTIFIED  VIA TELECONFERENCE), C.E.O.,  ALASKA                 
  HOUSING   FINANCING   AUTHORITY,   DEPARTMENT  OF   REVENUE,                 
  ANCHORAGE,  stated   that  deferred  maintenance   would  be                 
  provided under AS 18:56 and that AHFC could be involved with                 
  the deferred maintenance.  The  key to maintaining financial                 
  stability of  the  package would  be  in continuing  a  good                 
  credit rating.  He concluded that a strong AHFC will capture                 
  the capital needed to fund the projects.                                     
                                                                               
  Representative Therriault  asked how the $30 million dollars                 
  had  been  determined  for  the  deferred  maintenance  bond                 
  authorization.    Ms. Redman  replied  that the  real number                 
  would be $35 million  dollars as recommended in  last year's                 
  legislation.  Representative Therriault asked if $70 million                 
  dollars would be  the transfer amount.   Commissioner Condon                 
  replied that the  agreement as  negotiated between AFHC  and                 
  the Department  would transfer  $70 million  dollars in  the                 
  next fiscal year and  then followed by a $50  million dollar                 
  transfer for each of the following  four fiscal years.  This                 
  legislation would authorize that agreement.                                  
                                                                               
  Representative Martin noted that the  Senate had agreed with                 
  that  amount.    Representative  Mulder disagreed  with  the                 
  proposal.  He  stated that  this would take  money "off  the                 
  table" away from  the Legislature's future use and "give" it                 
  to  University priorities.    Commissioner Condon  countered                 
  that  the  bill  would  fund  a  project and  would  make  a                 
  provision for a long term financial plan in order to protect                 
  the value of AHFC as an asset.                                               
                                                                               
  Commissioner Condon  continued that  AHFC as  an asset  will                 
  produce roughly $100 million dollars a year in  revenue that                 
  the Legislature can use.  The legislation would commit those                 
  funds for use in bonding for one project.  There would be no                 
  commitment in regards to the transfer plan.                                  
                                                                               
  Representative  Therriault  asked if  the  legislation would                 
  limit the use to the assets  and not the cash.  Commissioner                 
  Condon did not know.   He stated that the  legislation would                 
  represent a policy  judgement that roughly  half of the  net                 
                                                                               
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  available funds coming out  of AHFC be reserved to  meet the                 
  kinds of needs that have typically been met by  AHFC and its                 
  programs.                                                                    
                                                                               
  HB  281  and  HB 309  were  HELD  in  Committee for  further                 
  consideration in Subcommittee.                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 10:00 A.M.                                          
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                           MAY 5, 1995                                         
                            8:40 A.M.                                          
                                                                               
  TAPE HFC 95 - 113, Side 1, #000 - end.                                       
  TAPE HFC 95 - 113, Side 2, #000 - #476.                                      
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair  Mark  Hanley called  the  House  Finance Committee                 
  meeting to order at 8:40 A.M.                                                
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Hanley               Representative Kohring                         
  Co-Chair Foster               Representative Martin                          
  Representative Mulder         Representative Navarre                         
  Representative Brown          Representative Parnell                         
  Representative Grussendorf    Representative Therriault                      
  Representative Kelly                                                         
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Senate  President  Drue Pearce;  Dan  Twohing,  Marine Pilot                 
  Coordinator,   Department   of    Commerce   and    Economic                 
  Development; Wendy Redman, University  Relations, University                 
  of  Alaska; Senator  Bert  Sharp;  Jerry McBeath,  Fairbanks                 
  North  Star Borough  Board  of Education,  Fairbanks; Wilson                 
  Condon,  Commissioner,  Department of  Revenue;  Dan Fauske,                 
  C.E.O., Alaska  Housing Finance  Corporation, Department  of                 
  Revenue.                                                                     
                                                                               
  SUMMARY                                                                      
                                                                               
  SB 88     An Act  establishing a pilot  program for  charter                 
            schools; and providing for an effective date.                      
                                                                               
            CS SB 88 (FIN) was reported out of Committee  with                 
            a "do pass" recommendation and  with a fiscal note                 
            by the Department of Education dated 3/9/95.                       
                                                                               
                                                                               
                                9                                              
                                                                               
                                                                               
  SB 130    An Act relating  to marine pilots and the Board of                 
            Marine Pilots;  extending the termination  date of                 
            the Board of  Marine Pilots; and providing  for an                 
            effective date.                                                    
                                                                               
            CS SB 130 (RLS) was  HELD in Committee for further                 
            consideration.                                                     
                                                                               
  HB 281    An  Act ratifying an  agreement between the Alaska                 
            Housing Finance Corporation  and the  commissioner                 
            of revenue  and making certain  pledges to obliges                 
            of  the  corporation  regarding   that  agreement;                 
            relating to the authorization for and the issuance                 
            of bonds by the Alaska Housing Finance Corporation                 
            to pay for the costs  of repair and rehabilitation                 
            of student housing facilities of the University of                 
            Alaska; and providing for an effective date.                       
                                                                               
            HB  281  was  placed in  Subcommittee  with  Chair                 
            Representative     Therriault      and     members                 
            Representative Martin and Representative Brown.                    
                                                                               
  HB 309    An Act approving the University of  Alaska's plans                 
            to  enter  into  long-term obligations  to  borrow                 
            money from the Alaska  Housing Finance Corporation                 
            for the acquisition of student housing facilities;                 
            and providing for an effective date.                               
                                                                               
            HB  309 was  placed  in  Subcommittee  with  Chair                 
            Representative   Therriault   and   with   members                 
            Representative Martin and Representative Brown.                    
                                                                               
  SENATE BILL 130                                                              
                                                                               
       "An  Act relating  to  marine pilots  and the  Board of                 
       Marine Pilots;  extending the  termination date of  the                 
       Board of Marine Pilots; and  providing for an effective                 
       date."                                                                  
                                                                               
  SENATE  PRESIDENT DRUE  PEARCE spoke in  support of  SB 130.                 
  She noted that  SB 130 was  designed to extend the  Board of                 
  Marine Pilots  and to  provide housekeeping  changes to  the                 
  Marine Pilotage Act of  1991 aimed at reducing the  level of                 
  litigation surrounding  the  marine  pilotage  industry  and                 
  providing  a stable  regulatory environment  for determining                 
  rate for pilotage services.                                                  
                                                                               
  Senator Pearce added that the legislation was  the result of                 
  extensive negotiations and  compromises between pilots,  the                 
  shipping industry and the  Administration.  The  legislation                 
  is  supported  by  all  of those  groups.    Senator  Pearce                 
  concluded  that  passage of  SB  130 would  ensure  that the                 
                                                                               
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  health, safety and  welfare of the  Alaskan people would  be                 
  met through the  State's regulation and oversight  of marine                 
  pilotage.                                                                    
                                                                               
  Representative  Brown asked  the  changes  made which  would                 
  affect liability.                                                            
                                                                               
  DAN  TWOHING,   MARINE  PILOT  COORDINATOR,   DEPARTMENT  OF                 
  COMMERCE  AND  ECONOMIC   DEVELOPMENT,  responded  that  the                 
  changes involved for  the liability for marine pilots in the                 
  1991 bill was  limited to $250  thousand dollars.  That  law                 
  was written to relate to anything  the pilot could have done                 
  to  have  a sanction  for the  license.   He  concluded that                 
  amount of money given a major marine accident would diminish                 
  rapidly.  The  pilots, through  the Alaska Pilots  Alliance,                 
  requested to have the  statute amended so that  pilots would                 
  loose  their  liability only  in  incidence of  proven gross                 
  negligence  or  incompetence  resulting  from  chemicals  or                 
  alcohol.   Any remaining  items for  which they could  loose                 
  liability were removed.                                                      
                                                                               
  Representative Brown thought  that "incompetence" was  being                 
  removed.   Mr. Twohing advised that incompetence is a matter                 
  of  law.   Within the  scope of  maritime investigation  and                 
  prosecutions, the  real question would  be gross  negligence                 
  which could lead to an incompetent situation.  He added that                 
  the  actual  word  "incompetence"  was  too  vague  for  the                 
  Department of Law.                                                           
                                                                               
  Representative  Mulder asked  how  the proposed  legislation                 
  would promote  competition.   Senator Pearce  commented that                 
  the 1991 Law created competition  amongst pilotage groups in                 
  so much as it  allowed for separate groups.   Currently, two                 
  separate groups exist.                                                       
                                                                               
  Representative  Mulder  questioned  the need  of  a pilotage                 
  group.   Mr. Twohing  explained that  State licensed  marine                 
  pilots  have  knowledge  of  the  waters and  ship  handling                 
  experience.    That  information  is  in  the  State's  best                 
  interest  and   that  pilots   "speak"  the   same  language                 
  internationally.                                                             
                                                                               
  Representative Therriault asked if  there was opposition  to                 
  the legislation in the various pilot groups.  Senator Pearce                 
  explained that each pilot group  had compromised their needs                 
  and  that  SB  130  was   legislation  resulting  from  that                 
  compromise and was supported by all interests.                               
                                                                               
  SB 130 was HELD in Committee for further consideration.                      
                                                                               
  HOUSE BILL 309                                                               
                                                                               
                                                                               
                               11                                              
                                                                               
                                                                               
       "An Act approving  the University of Alaska's  plans to                 
       enter  into long-term obligations  to borrow money from                 
       the   Alaska  Housing   Finance  Corporation   for  the                 
       acquisition   of   student   housing  facilities;   and                 
       providing for an effective date."                                       
                                                                               
  Representative Martin spoke in support of HB 309.  He stated                 
  that  HB  309 was  in response  to  the current  shortage of                 
  student  housing  at  the  University  of  Alaska  statewide                 
  system.   Specifically, the University of  Alaska, Anchorage                 
  campus houses only  7% of  the full-time student  population                 
  compared to the national average ranging from 35-50% housing                 
  accommodation.  Coupled  with the  shortage, is the  limited                 
  housing  at  the  Juneau  campus  of University  of  Alaska,                 
  Southeast  (UAS), and  the  absence of  any  housing at  the                 
  Ketchikan campus.                                                            
                                                                               
  He added that  the University of  Alaska has the ability  to                 
  repay  the  principal  of  the  money borrowed  from  Alaska                 
  Housing Finance Committee (AHFC), although they cannot raise                 
  housing rates sufficient to pay market interest  rates.  The                 
  proposed legislation would solve that problem.                               
                                                                               
  WENDY   REDMAN,   VICE-PRESIDENT,    UNIVERSITY   RELATIONS,                 
  UNIVERSITY OF  ALASKA, noted that  the proposed  legislation                 
  was the culmination of several years discussion with AHFC in                 
  trying  to find an  appropriate way that  they could involve                 
  themselves with the University and the housing problem.  She                 
  pointed out that University students fall within the preview                 
  of the old Alaska State Housing Authority  (ASHA) portion of                 
  AHFC.                                                                        
                                                                               
  This legislation would allow  AHFC to go forward so  that it                 
  would be consistent  with their mission.   Ms. Redman  added                 
  that a proposal has been worked out that would allow AHFC to                 
  go forward with  the University providing the  debt service.                 
  The  legislation would require AHFC  to let 3% revenue bonds                 
  to help with the housing interest  rate subsidy.  Ms. Redman                 
  emphasized  that AHFC from  the very  beginning has  made it                 
  clear to the University  that unless HB 281 is  also passed,                 
  AHFC will not be in a position to help the University.                       
                                                                               
  She continued that passage of  the legislation would provide                 
  to the Anchorage area a total of six hundred new beds plus a                 
  commons  facility  for eating.    She referenced  the Juneau                 
  area, noting the  less than .5%  vacancy rate, pointing  out                 
  how restricted housing is  for incoming student.                             
                                                                               
  HB 309 was HELD in Committee for further discussion.                         
                                                                               
  SENATE BILL 88                                                               
                                                                               
                                                                               
                               12                                              
                                                                               
                                                                               
       "An  Act  establishing  a  pilot  program  for  charter                 
       schools; and providing for an effective date."                          
                                                                               
  SENATOR BERT SHARP testified  in support of CS SB  88 (FIN).                 
  He stated that the issue of charter schools was discussed at                 
  length  during  the  two  years  of  the  18th  Legislature.                 
  Unfortunately, charter schools was  just one part of  SB 61,                 
  which in all aspects  was an "omnibus education bill".   The                 
  bill tried  to address  diverse issues, each  of which  were                 
  controversial  and  in   some  way  tainted  the   other  by                 
  association.                                                                 
                                                                               
  He  continued  that  all charter  school  proposals  must be                 
  submitted to the  local school  board for consideration  and                 
  upon their approval,  forwarded to  the Commissioner of  the                 
  Department of Education  for review and compliance  to state                 
  law.   All staffing  of charter  schools must  be done  on a                 
  volunteer basis.                                                             
                                                                               
  Senator Sharp added  that a charter school  would not dilute                 
  the  amount  of money  available  to school  districts other                 
  schools.    By  challenging  students  to achieve  at  their                 
  highest capabilities, the  charter schools may lead  the way                 
  to a more  effective education system for  the next century.                 
  He urged the Committee to support  the legislation.  Senator                 
  Sharp noted that the project would sunset in ten years.                      
                                                                               
  Co-Chair  Hanley asked if the  project would be optional for                 
  each school district.  Senator Sharp stated that it would be                 
  optional and would need to be approved by each school board.                 
  Co-Chair Hanley referenced Section 3,  Page 3, which implies                 
  that the  local school  board would  "have"  to provide  the                 
  charter school with  a budget.   He asked  if that  language                 
  would require the school district to  have a charter school.                 
                                                                               
                                                                               
  Senator Sharp noted that the  application for charter school                 
  would need to be submitted by the group to the school board.                 
  The school board would then consider the entire packet.  Co-                 
  Chair Hanley reiterated  that he  understood that the  local                 
  school board would  have to  forfeit to the  State Board  of                 
  Education applications for  a charter school that  have been                 
  "approved or  denied".   Senator Sharp  emphasized that  the                 
  intent of the  legislation defines that the  Commissioner of                 
  Education  would  have  to approve  the  agreement  that the                 
  charter  group would  meet  the statutory  requirements  for                 
  public education.                                                            
                                                                               
  Representative  Grussendorf  expressed   concern  with   the                 
  financial obligation of deferred maintenance for the charter                 
  schools and asked if  those causes would be binding  for the                 
  State.   Senator Sharp replied  that the school district can                 
                                                                               
                               13                                              
                                                                               
                                                                               
  at any point  terminate the contract  if the charter  school                 
  deviated from the prescribed budget.                                         
                                                                               
  Representative Brown questioned if there would be any change                 
  on the  teachers' tenure accumulation requirements  or their                 
  employment   conditions.    Senator  Sharp  noted  that  any                 
  teachers participating in  the charter school program  would                 
  continue to  be subject  to collective bargaining  agreement                 
  terms and  would  continue to  be  employees of  the  school                 
  district.                                                                    
                                                                               
  Representative Brown  asked if religious education  would be                 
  authorized  through the proposed legislation.  Senator Sharp                 
  pointed out that Page 4, Line 14, specified that the charter                 
  school would be "nonsectarian".                                              
                                                                               
  JERRY  MCBEATH,  FAIRBANKS  NORTH   STAR  BOROUGH  BOARD  OF                 
  EDUCATION, FAIRBANKS, spoke in support of CS SB 88 (FIN) and                 
  urged Committee members to support the legislation.                          
                                                                               
  (Tape Change, HFC 95-113, Side 2).                                           
                                                                               
  Representative Therriault MOVED to report CS SB 88 (FIN) out                 
  of Committee  with individual  recommendations and  with the                 
  accompanying fiscal note.                                                    
                                                                               
  CS SB  88 (FIN)  was reported  out of  Committee with a  "do                 
  pass"  recommendation  and   with  a  fiscal  note   by  the                 
  Department of Education dated 3/9/95.                                        
                                                                               
  HOUSE BILL 281                                                               
                                                                               
       "An  Act  ratifying  an agreement  between  the  Alaska                 
       Housing  Finance  Corporation and  the  commissioner of                 
       revenue and making  certain pledges  to obliges of  the                 
       corporation regarding  that agreement; relating  to the                 
       authorization  for  and the  issuance  of bonds  by the                 
       Alaska Housing Finance Corporation to pay for the costs                 
       of  repair   and  rehabilitation  of   student  housing                 
       facilities of  the University of Alaska;  and providing                 
       for an effective date."                                                 
                                                                               
  HOUSE BILL 309                                                               
                                                                               
       "An Act approving  the University of Alaska's  plans to                 
       enter into  long-term obligations to  borrow money from                 
       the  Alaska   Housing  Finance   Corporation  for   the                 
       acquisition   of   student   housing  facilities;   and                 
       providing for an effective date."                                       
                                                                               
  Co-Chair Hanley noted that HB 281 and HB 309 would be placed                 
  in Subcommittee with Representative  Therriault as Chair and                 
                                                                               
                               14                                              
                                                                               
                                                                               
  with members Representative Martin and Representative Brown.                 
                                                                               
                                                                               
  Representative  Mulder  asked the  long  term plans  for the                 
  University of  Alaska Southeast  (UAS).   He indicated  that                 
  campus was  not  affordable  and  suggested  spending  those                 
  requested funds in  other locations.   Ms. Redman  responded                 
  that  the  Juneau campus  has  intentionally been  kept very                 
  small  and focused.  It offers only undergraduate degrees in                 
  four  different  areas.   She pointed  out  that it  was the                 
  strongest campus in terms of student growth.                                 
                                                                               
  She added that students from Southeast Alaska do not want to                 
  move  to  Fairbanks,  pointing out  the  low  enrollments of                 
  Southeast  students  moving  to Anchorage  or  Fairbanks for                 
  school.  Ms. Redman  noted that most of those  students tend                 
  to go "outside"  if they do not attend UAS.   She emphasized                 
  that the long term plan for Juneau would be to keep it small                 
  and focused.                                                                 
                                                                               
  Representative Mulder asked  the number of students  that go                 
  to UAS.  Ms. Redman noted that there were approximately 2000                 
  students.  Representative Kelly asked if there was a loss to                 
  the state by the  number of students that leave  for school.                 
  Ms.  Redman  replied  that  students  that leave  the  state                 
  usually  do not  return which results  in a net  loss to the                 
  State.                                                                       
                                                                               
  Representative Mulder  asked the  total cost per  university                 
  student at each  of the three  campuses.  Ms. Redman  stated                 
  that the tuition was  the same at all campuses.   The Juneau                 
  campus does cost the  State less than the cost  of Anchorage                 
  or Fairbanks.   She added that  cost was reflective of  what                 
  UAS offers, with no laboratory courses,  faculty are paid on                 
  a lower wage rate and no graduate programs.                                  
                                                                               
  Representative Martin pointed out that  last year a detailed                 
  study had  been provided on  the costs associated  with each                 
  campus.  Ms. Redman stated that the Southeast campus was the                 
  most efficient campus with the lowest administrative cost.                   
                                                                               
  Representative Therriault questioned  the fiscal note.   Ms.                 
  Redman explained that  the $970.2  thousand dollars was  the                 
  appropriation amount and represented the University's  share                 
  of the debt  service on the  dormitories in Anchorage.   The                 
  University is required  to get authorization to spend any of                 
  their own debt service that  exceeds over $1 million dollars                 
  per year on a revenue bond.                                                  
                                                                               
  Representative  Kohring asked  if  the University  supported                 
  combining  the  two bills.    Ms.  Redman advised  that  the                 
  preference  would  be  to leave  the  pieces  of legislation                 
                                                                               
                               15                                              
                                                                               
                                                                               
  separate and that HB 309 would  be contingent on the passage                 
  of HB 281.                                                                   
                                                                               
  Representative Kohring asked  what the bond rate  would have                 
  been if it had not been subsidized.  Ms. Redman replied that                 
  the rate  would be  close to  6.7%.   Representative Kohring                 
  pointed out that would be an interest rate subsidy.                          
                                                                               
  WILSON CONDON, COMMISSIONER, DEPARTMENT OF REVENUE, spoke in                 
  support  of  HB 281.    He  stated that  the  bill had  been                 
  introduced  by  the  Governor.   He  provided  the Committee                 
  members  with  a  position  paper  regarding  the  statewide                 
  system.  [Attachment #1].  He also provided members with the                 
  "University of Alaska Deferred Maintenance" brochure.  [Copy                 
  on file].                                                                    
                                                                               
  Representative Martin commented on the deferred  maintenance                 
  costs  of student  housing.   Commissioner  Condon explained                 
  that deferred maintenance would need  to be housing related.                 
                                                                               
                                                                               
  DAN FAUSKE, (TESTIFIED  VIA TELECONFERENCE), C.E.O.,  ALASKA                 
  HOUSING   FINANCING   AUTHORITY,   DEPARTMENT  OF   REVENUE,                 
  ANCHORAGE,  stated   that  deferred  maintenance   would  be                 
  provided under AS 18:56 and that AHFC could be involved with                 
  the deferred maintenance.  The  key to maintaining financial                 
  stability of  the  package would  be  in continuing  a  good                 
  credit rating.  He concluded that a strong AHFC will capture                 
  the capital needed to fund the projects.                                     
                                                                               
  Representative Therriault asked how  the $30 million dollars                 
  had  been  determined  for  the  deferred  maintenance  bond                 
  authorization.    Ms. Redman  replied  that the  real number                 
  would be $35 million  dollars as recommended in  last year's                 
  legislation.  Representative Therriault asked if $70 million                 
  dollars would be  the transfer amount.   Commissioner Condon                 
  replied that the  agreement as  negotiated between AFHC  and                 
  the Department  would transfer  $70 million  dollars in  the                 
  next fiscal year and  then followed by a $50  million dollar                 
  transfer for each of the following  four fiscal years.  This                 
  legislation would authorize that agreement.                                  
                                                                               
  Representative Martin noted that the  Senate had agreed with                 
  that  amount.    Representative  Mulder  disagreed with  the                 
  proposal.  He  stated that  this would take  money "off  the                 
  table" away from  the Legislature's future use and "give" it                 
  to  University priorities.    Commissioner Condon  countered                 
  that  the  bill  would  fund  a  project and  would  make  a                 
  provision for a long term financial plan in order to protect                 
  the value of AHFC as an asset.                                               
                                                                               
  Commissioner Condon  continued that  AHFC as  an asset  will                 
                                                                               
                               16                                              
                                                                               
                                                                               
  produce roughly $100  million dollars a year in revenue that                 
  the Legislature can use.  The legislation would commit those                 
  funds for use in bonding for one project.  There would be no                 
  commitment in regards to the transfer plan.                                  
                                                                               
  Representative  Therriault asked  if  the legislation  would                 
  limit the use to the assets and not  the cash.  Commissioner                 
  Condon did not know.   He stated that the  legislation would                 
  represent  a policy judgement  that roughly half  of the net                 
  available funds coming out  of AHFC be reserved to  meet the                 
  kinds of needs that have typically  been met by AHFC and its                 
  programs.                                                                    
                                                                               
  HB  281  and  HB 309  were  HELD  in  Committee for  further                 
  consideration in Subcommittee.                                               
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 10:00 A.M.                                          
                                                                               
                                                                               
                               17                                              

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