Legislature(2009 - 2010)HOUSE FINANCE 519

04/11/2010 12:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 6:30 pm Today --
+ HB 296 ENERGY EFFICIENCY BONDS; LOANS; FUND TELECONFERENCED
Moved CSHB 296(ENE) Out of Committee
+ HB 416 PRUDENT MANAGEMENT OF INSTITUTIONAL FUNDS TELECONFERENCED
Moved Out of Committee
*+ HB 421 PUBLIC EMPLOYEE SALARIES TELECONFERENCED
Heard & Held
+= HB 424 G.O. BONDS FOR EDUCATION PROJECTS TELECONFERENCED
Moved CSHB 424(FIN) Out of Committee
+ SB 199 MEDICAID COVERAGE FOR DENTURES TELECONFERENCED
Moved Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                      April 11, 2010                                                                                            
                         1:13 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:13:53 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stoltze called the  House Finance Committee meeting                                                                    
to order at 1:13 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Hawker, Co-Chair                                                                                            
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Bill Thomas Jr., Vice-Chair                                                                                      
Representative Allan Austerman                                                                                                  
Representative Mike Doogan                                                                                                      
Representative Anna Fairclough                                                                                                  
Representative Neal Foster                                                                                                      
Representative Les Gara                                                                                                         
Representative Reggie Joule                                                                                                     
Representative Mike Kelly                                                                                                       
Representative Woodie Salmon                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative    Mike   Chenault;    Representative   Nancy                                                                    
Dahlstrom;   Senator   Charlie   Huggins;   Bryan   Butcher,                                                                    
Director,  Government Affairs  and Public  Relations, Alaska                                                                    
Housing Finance  Corporation, Department Of  Revenue; Konrad                                                                    
Jackson,  Staff, Representative  Kurt Olson,  Sponsor; Kevin                                                                    
Brooks, Deputy  Commissioner, Department  of Administration;                                                                    
Max Hensley, Staff, Senator  Johnnie Ellis, Sponsor; Senator                                                                    
Johnnie  Ellis,  Sponsor;  Jon  Sherwood,  Medicaid  Special                                                                    
Projects, Division  of Health  Care Services,  Department of                                                                    
Health   and  Social   Services;  James   Armstrong,  Staff,                                                                    
Representative   Bill   Stoltze;   Jerry   Burnett,   Deputy                                                                    
Commissioner, Division  of Treasury, Department  of Revenue;                                                                    
Michelle Rizk, Budget Director,  University of Alaska; Wendy                                                                    
Redman,  Vice President,  Statewide Programs,  University of                                                                    
Alaska.                                                                                                                         
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Dan Fauske,  CEO/Executive Director, Alaska  Housing Finance                                                                    
Corporation, Department of Revenue;  Joe Dubler, Director of                                                                    
Finance, Alaska  Housing Finance Corporation,  Department of                                                                    
Revenue;   Jim  Lynch,   Treasurer,  University   of  Alaska                                                                    
Foundation;  Eric  Wohlforth,  Chair, University  of  Alaska                                                                    
Foundation  Investment   Committee;  Dr.   David  Logan,DDS,                                                                    
Alaska Dental Society.                                                                                                          
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 296    ENERGY EFFICIENCY BONDS; LOANS; FUND                                                                                  
                                                                                                                                
          CSHB 296(FIN)  was REPORTED out of  Committee with                                                                    
          a  "do  pass"  recommendation  and  with  attached                                                                    
          previously published  fiscal notes: FN  1(REV), FN                                                                    
          2(DOT).                                                                                                               
                                                                                                                                
HB 416    PRUDENT MANAGEMENT OF INSTITUTIONAL FUNDS                                                                             
                                                                                                                                
          HB 416  was REPORTED out  of Committee with  a "do                                                                    
          pass" recommendation and  with attached previously                                                                    
          published fiscal notes: FN 1(LAW), FN 2(UA).                                                                          
                                                                                                                                
HB 421    PUBLIC EMPLOYEE SALARIES                                                                                              
                                                                                                                                
          HB  421  was  HEARD  and  HELD  in  Committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
HB 424    G.O. BONDS FOR EDUCATION PROJECTS                                                                                     
                                                                                                                                
          HB 424  was REPORTED out  of Committee with  a "do                                                                    
          pass" recommendation and  with attached new fiscal                                                                    
          note by the Department of Revenue.                                                                                    
                                                                                                                                
SB 199    MEDICAID COVERAGE FOR DENTURES                                                                                        
                                                                                                                                
          SB 199  was REPORTED out  of Committee with  a "do                                                                    
          pass" recommendation and  with attached new fiscal                                                                    
          note  by  the  Department  of  Health  and  Social                                                                    
          Services  and  previously published  fiscal  note:                                                                    
          FN2 (DHS).                                                                                                            
                                                                                                                                
                                                                                                                                
HOUSE BILL NO. 296                                                                                                            
                                                                                                                                
     "An  Act authorizing  and relating  to the  issuance of                                                                    
     bonds  by  the   Alaska  Housing  Finance  Corporation;                                                                    
     establishing  the  Alaska energy  efficiency  revolving                                                                    
     loan  fund  and  relating   to  the  fund;  authorizing                                                                    
     municipalities and the State  of Alaska to borrow money                                                                    
     from  the Alaska  Housing Finance  Corporation for  the                                                                    
     purposes  of  the  Alaska energy  efficiency  revolving                                                                    
     loan fund; and providing for an effective date."                                                                           
                                                                                                                                
1:15:27 PM                                                                                                                    
                                                                                                                                
BRYAN  BUTCHER,  DIRECTOR,  GOVERNMENT  AFFAIRS  AND  PUBLIC                                                                    
RELATIONS,  ALASKA HOUSING  FINANCE CORPORATION,  DEPARTMENT                                                                    
OF REVENUE, reported that HB  296 would allow Alaska Housing                                                                    
Finance   Corporation   (AHFC)   to  establish   an   energy                                                                    
efficiency revolving loan  fund through bond sales  of up to                                                                    
$250 million. He stated that  $28.3 million was appropriated                                                                    
to  the State  Energy  Program from  the federal  government                                                                    
stimulus  funds [American  Recovery  and Reinvestment  Act].                                                                    
The state  would use  $18 million of  the funds  to leverage                                                                    
the  program.  The program  was  approved  through the  U.S.                                                                    
Department  of  Energy.  He explained  that  municipalities,                                                                    
school districts,  or state  entities could  take out  a low                                                                    
interest loans  from AHFC to perform  energy efficiency work                                                                    
to  public buildings,  as prescribed  by a  mandatory energy                                                                    
audit.  The  audit  would  be   carried  out  by  an  energy                                                                    
performance  contractor. The  loan  would be  repaid by  the                                                                    
energy costs savings achieved  through the energy efficiency                                                                    
improvements. He  added that if  the savings,  as determined                                                                    
by  the audit  were not  achieved, the  contractor would  be                                                                    
responsible for the  loan payments. He pointed  out that the                                                                    
public  entity would  realize budget  savings by  increasing                                                                    
energy efficiency in public buildings.                                                                                          
                                                                                                                                
Representative Austerman asked who the contractor would be.                                                                     
Mr.  Butcher explained  that established  energy performance                                                                    
contractors would perform the  audit and hire subcontractors                                                                    
to  perform   the  work.  The  corporation   estimated  that                                                                    
approximately 2,500 jobs will be created.                                                                                       
                                                                                                                                
1:19:16 PM                                                                                                                    
                                                                                                                                
Representative Gara  wondered how long the  loan period was.                                                                    
He  expressed  concern that  a  long  loan repayment  period                                                                    
i.e., twenty  years could diminish any  initial savings. Mr.                                                                    
Butcher indicated that the loan  tends to extend for shorter                                                                    
periods since  the amount of loan  improvement money fronted                                                                    
should  compare with  the energy  savings  realized over  an                                                                    
estimated  number of  years, with  the possibility  of early                                                                    
repayment, if additional energy costs savings are realized.                                                                     
                                                                                                                                
Representative  Gara asked  why the  bond program  costs $18                                                                    
million.  Mr. Butcher  explained that  AHFC was  required to                                                                    
have  a  two  percent  minimum debt  service  reserve;  five                                                                    
million is the  required minimum for $250  million. He added                                                                    
that  the additional  leveraged  funds of  $18 million  will                                                                    
help  reduce   interest  rates.  He  noted   that  the  U.S.                                                                    
Department  of Energy  complemented  the  program for  being                                                                    
self-sustaining ensuring the longevity of the program.                                                                          
                                                                                                                                
1:23:08 PM                                                                                                                    
                                                                                                                                
DAN FAUSKE,  CEO/EXECUTIVE DIRECTOR, ALASKA  HOUSING FINANCE                                                                    
CORPORATION,  DEPARTMENT  OF REVENUE  (via  teleconference),                                                                    
supported Mr. Butcher's testimony.                                                                                              
                                                                                                                                
Co-Chair Stoltze requested discussion  on the fiscal note FN                                                                    
1 (REV). Mr. Butcher  relayed that the corporation submitted                                                                    
a  zero   fiscal  note;   no  additional   expenditures  are                                                                    
anticipated.                                                                                                                    
                                                                                                                                
Representative  Fairclough wondered  if the  state will  set                                                                    
energy  efficiency standards  or goals.  Mr. Butcher  stated                                                                    
that  AHFC  was  developing regulations  to  achieve  energy                                                                    
efficiency standards statewide.                                                                                                 
                                                                                                                                
Vice-Chair Thomas felt that AHFC  had good energy efficiency                                                                    
standards  for homes  and hoped  for  similar standards  for                                                                    
public  buildings.  Mr. Butcher  agreed.  He  added that  $2                                                                    
million  was  set  aside  to work  with  the  Alaska  Energy                                                                    
Authority   to  make   their   energy  efficiency   software                                                                    
applicable to public buildings as well as residences.                                                                           
                                                                                                                                
1:27:04 PM                                                                                                                    
                                                                                                                                
Representative  Doogan   inquired  further   about  interest                                                                    
rates.                                                                                                                          
                                                                                                                                
JOE  DUBLER, DIRECTOR  OF  FINANCE,  ALASKA HOUSING  FINANCE                                                                    
CORPORATION,  DEPARTMENT  OF REVENUE  (via  teleconference),                                                                    
replied that  the interest rate  was dependent on  the terms                                                                    
of the loan, determined by  the length of the payback period                                                                    
and amount  borrowed. He expected  the rate to be  low based                                                                    
on tax exempt debt on municipal or state buildings.                                                                             
                                                                                                                                
Co-Chair Hawker opened and closed public testimony.                                                                             
                                                                                                                                
Representative  Austerman   inquired  further   on  interest                                                                    
rates.  He wondered  why the  interest rates  were variable.                                                                    
Mr. Dubler responded that the  longer length of the loan the                                                                    
greater the  risk. He exemplified a  municipality that needs                                                                    
a five year  loan as opposed to a municipality  that needs a                                                                    
fifteen year  loan and  stated that  a longer  loan requires                                                                    
paying a higher return.                                                                                                         
                                                                                                                                
1:31:15 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hawker  summarized  that  not  all  borrowers  are                                                                    
equal.                                                                                                                          
                                                                                                                                
Mr. Dubler agreed and added that  not all loans are equal as                                                                    
well. He  exemplified that interest  on a mortgage  loan for                                                                    
fifteen years is half of a  percent lower than a thirty year                                                                    
loan.   It is a standard  risk component built in  to fixed-                                                                    
rate debt.                                                                                                                      
                                                                                                                                
Representative  Fairclough wondered  if the  operating costs                                                                    
of new  technologies such as,  a high efficiency  boiler are                                                                    
imbedded into the formula to determine energy cost savings.                                                                     
                                                                                                                                
1:33:15 PM                                                                                                                    
                                                                                                                                
Mr. Butcher answered  that AHFC was still in  the process of                                                                    
deciding how the program will be administered.                                                                                  
                                                                                                                                
Representative Kelly  asked for  more information  about how                                                                    
the  $18  million would  be  leveraged  and how  AHFC  would                                                                    
establish  interest rates  for  specific  loans. Mr.  Dubler                                                                    
explained the  process. He stated  that AHFC  would evaluate                                                                    
each loan, use available funds  from the initial $18 million                                                                    
and set  the borrower's interest  rate at what  the interest                                                                    
rate would be  if bonds had been sold.  The corporation does                                                                    
not  intend to  issue bonds  until program  demand increases                                                                    
and more capital  is needed. The corporation  would not make                                                                    
a profit off the program;  the purpose is only to weatherize                                                                    
buildings throughout the state.  The interest rates would be                                                                    
higher  for  long  term debt  because  the  bond  purchasers                                                                    
demand a  higher interest  rate for a  longer term  bond. He                                                                    
surmised that in  the bond market AHFC would  borrow nine to                                                                    
ten year debt to cover the  eight to ten year loans they are                                                                    
financing.  He  concluded  that  the  $250  million  is  the                                                                    
eventual  estimated  total to  get  the  fund revolving  and                                                                    
continue for many years.                                                                                                        
                                                                                                                                
1:37:19 PM                                                                                                                    
                                                                                                                                
Vice-Chair   Thomas  noted   that  the   Regional  Education                                                                    
Attendance  Areas  (REAA)  in his  district  was  struggling                                                                    
financially. He wondered what they  would use for collateral                                                                    
and how  it could realistically help  them with skyrocketing                                                                    
energy costs  in rural areas. Mr.  Butcher acknowledged that                                                                    
other states  do not have  the challenges rural  Alaska has.                                                                    
He pointed out that the  school administrator would not have                                                                    
to come  up with  any additional  funds. The  energy savings                                                                    
would offset  the loan repayments. Vice-Chair  Thomas opined                                                                    
that the  school district  would rather  pass savings  on to                                                                    
their teachers or  that energy prices would  surge again and                                                                    
use up the savings, requiring  state assistance to repay the                                                                    
loan.                                                                                                                           
                                                                                                                                
Vice-Chair  Thomas  MOVED to  report  CSHB  296(ENE) out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CSHB  296(FIN) was  REPORTED  out of  Committee  with a  "do                                                                    
pass" recommendation and  with attached previously published                                                                    
fiscal notes: FN 1(REV), FN 2(DOT).                                                                                             
                                                                                                                                
                                                                                                                                
HOUSE BILL NO. 416                                                                                                            
                                                                                                                                
     "An Act  adopting and relating  to the  Uniform Prudent                                                                    
     Management of Institutional Funds  Act; relating to the                                                                    
     investment   of  money   for  charitable   purposes  by                                                                    
     institutions, including  governmental institutions; and                                                                    
     relating to the University of Alaska."                                                                                     
                                                                                                                                
1:41:25 PM                                                                                                                    
                                                                                                                                
KONRAD JACKSON,  STAFF, REPRESENTATIVE KURT  OLSON, SPONSOR,                                                                    
stated that HB 416 would allow  the State of Alaska to adopt                                                                    
the Uniform  Prudent Management  of Institutional  Funds Act                                                                    
(UPMIFA). He briefly summarized  the history and events that                                                                    
led  to  the  legislation.  The State  adopted  the  Uniform                                                                    
Management of  Institutional Funds  Act (UMIFA) in  1972. In                                                                    
2006, UMIFA was revised and  up-dated to UPMIFA and has been                                                                    
adopted  by  all but  six  states  and Puerto  Rico.  UPMIFA                                                                    
brings  two changes  to institutional  funds management  and                                                                    
endowment  accounting:  first,  is the  elimination  of  the                                                                    
historic dollar value as a  benchmark for endowment spending                                                                    
and  the  amount  identified   for  accounting  purposes  as                                                                    
permanently restricted  net assets;  secondly, clarification                                                                    
of the  legal classification of earnings.  He continued that                                                                    
UPMIFA  incorporates the  experience gained  in thirty  five                                                                    
years under UMIFA and adoption  will bring the state current                                                                    
with updated  fiduciary practices.  He stressed  that UPMIFA                                                                    
is  default legislation;  other provisions  in law  in donor                                                                    
agreements or governing instruments supersede UPMIFA.                                                                           
                                                                                                                                
Co-Chair  Hawker  asked  what   state  savings  accounts  or                                                                    
activities would be affected by the legislation.                                                                                
                                                                                                                                
Mr.  Jackson  surmised  that  none  would  be  affected.  He                                                                    
thought that the  state had governing provisions  for all of                                                                    
their  funds.  He   emphasized  that  governing  instruments                                                                    
supersedes uniform prudent management language.                                                                                 
                                                                                                                                
Co-Chair  Hawker  asked who  would  be  affected within  the                                                                    
state structure.                                                                                                                
                                                                                                                                
1:46:34 PM                                                                                                                    
                                                                                                                                
Mr. Jackson  noted that endowments within  the University of                                                                    
Alaska are among funds that would be affected.                                                                                  
                                                                                                                                
Co-Chair Hawker opened public testimony.                                                                                        
                                                                                                                                
JIM LYNCH,  TREASURER, UNIVERSITY OF ALASKA  FOUNDATION (via                                                                    
teleconference),   stated   he   has   been   managing   the                                                                    
University's  endowments   for  approximately   twenty  five                                                                    
years.  He   reiterated  that   the  legislation   sets  out                                                                    
responsible  practices  and  standards  for  investment  and                                                                    
management   and  provides   essential   guidance  for   the                                                                    
administration  of  endowments   and  charitable  funds.  He                                                                    
indicated   that   it   reduces   the   exposure   of   fund                                                                    
administrators  to  legal  challenges. The  state  does  not                                                                    
offer  guidance  or  standards to  deal  with  institutional                                                                    
funds.   He  summarized   that  UPMIFA   delineated  current                                                                    
practices that are used nationally.                                                                                             
                                                                                                                                
Mr. Lynch added  that there were two  UPMIFA provisions that                                                                    
were specifically  applicable to the  university: management                                                                    
of endowments,  and the  clarification that  state fiduciary                                                                    
rules apply to the university.                                                                                                  
                                                                                                                                
1:51:36 PM                                                                                                                    
                                                                                                                                
Mr. Lynch noted support for  UPMIFA from non-profits such as                                                                    
the Rasmussen  Foundation. Mr.  Lynch remarked  that various                                                                    
state  funds are  all  heavily regulated  by  the state  and                                                                    
would not  be affected by  the legislation. He  noted UPMIFA                                                                    
mostly applies to non-profits, and municipalities.                                                                              
                                                                                                                                
Co-Chair Hawker  surmised that UPMIFA  would have  a greater                                                                    
impact on the  non-profit public sector. He  wondered if the                                                                    
legislation would  impose new  duties or  additional burdens                                                                    
to  small organizations  in the  private  sector. Mr.  Lynch                                                                    
felt that  it would  assist non-profits by  clarifying their                                                                    
fiduciary responsibilities. The  guidelines help non-profits                                                                    
manage the funds in accordance with the donor's intent.                                                                         
                                                                                                                                
1:55:42 PM                                                                                                                    
                                                                                                                                
ERIC  WOHLFORTH,  CHAIR,  UNIVERSITY  OF  ALASKA  FOUNDATION                                                                    
INVESTMENT  COMMITTEE (via  teleconference), contended  that                                                                    
the legislation  was important and would  be consistent with                                                                    
most  other states.  He noted  that many  donors are  out of                                                                    
state and use to  their own state's endowment administration                                                                    
rules.  Additionally, many  small university  endowments are                                                                    
governed by  old-fashioned rules that do  not permit payment                                                                    
of scholarships. Those funds would  become available for the                                                                    
payment of  scholarships with  adoption of  the legislation.                                                                    
Finally,  he was  assured  by  the fact  that  the bill  was                                                                    
default legislation.                                                                                                            
                                                                                                                                
Representative   Fairclough   asked  if   UPMIFA   addressed                                                                    
situations where  the organization would like  to change the                                                                    
purpose of the  endowment. Mr. Lynch related  that the rules                                                                    
require that the  institution would have to ask  a court for                                                                    
permission to  change the purpose of  an endowment. However,                                                                    
an  expedited  procedure exists  for  an  endowment that  is                                                                    
under fifteen  thousand dollars and  over twenty  years old.                                                                    
The  non-profit   organization  must  notify   the  attorney                                                                    
general's office  as to  the intent to  change or  to modify                                                                    
restrictions on the endowment.                                                                                                  
                                                                                                                                
2:03:11 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker closed public testimony                                                                                         
                                                                                                                                
Co-Chair Stoltze  MOVED to  report HB  416 out  of Committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
notes. There being NO OBJECTION, it was so ordered.                                                                             
                                                                                                                                
HB  416 was  REPORTED  out  of Committee  with  a "do  pass"                                                                    
recommendation  and   with  attached   previously  published                                                                    
fiscal notes: FN 1(LAW), FN 2(UA).                                                                                              
                                                                                                                                
                                                                                                                                
HOUSE BILL NO. 421                                                                                                            
                                                                                                                                
     "An Act relating to the  compensation of certain public                                                                    
     officials,  officers,  and  employees  not  covered  by                                                                    
     collective bargaining agreements;  and providing for an                                                                    
     effective date."                                                                                                           
                                                                                                                                
2:05:16 PM                                                                                                                    
                                                                                                                                
KEVIN   BROOKS,    DEPUTY   COMMISSIONER,    DEPARTMENT   OF                                                                    
ADMINISTRATION,  reported  that negotiations  had  concluded                                                                    
resulting in voluntary agreements  between the state and the                                                                    
five unions  that represent state  employees. He  noted that                                                                    
HB  421 provided  a similar  wage  increase for  non-covered                                                                    
employees  in  the   executive,  legislative,  and  judicial                                                                    
branches.                                                                                                                       
                                                                                                                                
He summarized  the contents of  the legislation  by section.                                                                    
Section 1, of the bill  represents a two percent increase to                                                                    
the FY  2010 salary  schedule to begin  in FY11.  Sections 2                                                                    
and 3,  of the  bill provide for  similar increases  in FY12                                                                    
and 13.  Section 4,  addresses a  similar wage  increase for                                                                    
employees of  the executive branch. Section  5, provides for                                                                    
a  comparable  two percent  increase  for  employees of  the                                                                    
court  system.  He  pointed  out   that  the  executive  and                                                                    
judicial branches  do not use  the legislature's  wage range                                                                    
classification. Section 6, clarified  that the University of                                                                    
Alaska  employee's  wage  increases are  determined  by  the                                                                    
Board of Regents. Section 7,  provides for an effective date                                                                    
of July 1, 2010.                                                                                                                
                                                                                                                                
                                                                                                                                
Co-Chair Stoltze  announced that the wage  increase does not                                                                    
apply to elected officials. Mr. Brooks affirmed.                                                                                
Representative  Austerman  asked  for clarification  of  the                                                                    
wage increase.  Mr. Brooks restated  that the  wage increase                                                                    
was two percent for FY 2011, FY 2012, and FY 2013.                                                                              
                                                                                                                                
2:08:43 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker questioned the wage  increase when the state                                                                    
economy  is  struggling  and with  record-high  unemployment                                                                    
rates. Mr. Brooks  replied that the department  was aware of                                                                    
the  economic  climate  and the  issues  were  prevalent  in                                                                    
discussions  with the  labor unions.  The contracts  reached                                                                    
with unions  were relatively modest compared  with contracts                                                                    
in past years.  He argued for parity  for similarly situated                                                                    
state employees not covered by unions.                                                                                          
                                                                                                                                
Co-Chair Hawker appreciated acknowledgement of the dilemma.                                                                     
He  believed the  court system  employee's compensation  was                                                                    
relatively low.  He wondered if  it was possible  to approve                                                                    
the  fiscal  note for  the  court  system  but not  for  the                                                                    
executive and legislative branches.                                                                                             
                                                                                                                                
2:12:03 PM                                                                                                                    
                                                                                                                                
Mr. Brooks expressed uncertainty  regarding the procedure to                                                                    
make the change.                                                                                                                
                                                                                                                                
Co-Chair Hawker wondered what would  happen if the committee                                                                    
passed out the bill but zeroed  out the fiscal notes for the                                                                    
executive and legislative branches.  Mr. Brooks thought that                                                                    
the  money would  have to  be  taken from  other sources  of                                                                    
funding in  the executive and legislative  budgets. The bill                                                                    
would authorize  the expenditure  for all three  branches of                                                                    
government.                                                                                                                     
                                                                                                                                
Representative Kelly  asked what  the rate of  inflation was                                                                    
estimated  to  be  in  the  next  three  years.  Mr.  Brooks                                                                    
reported that the department did  not attempt to project the                                                                    
consumer  price   index  (CPI)  in  relation   to  the  wage                                                                    
increases.                                                                                                                      
                                                                                                                                
Representative Fairclough  cited page 37, Article  12 of the                                                                    
Alaska  Constitution that  addresses the  merit system.  She                                                                    
asked if  the wage  increases in  HB 421  were based  on the                                                                    
merit system  as described in  the constitution.  Mr. Brooks                                                                    
believed that  it was consistent  with Article  12. However,                                                                    
the  wage increases  were  mostly  associated with  cost-of-                                                                    
living adjustments.                                                                                                             
                                                                                                                                
Representative Fairclough  opined that  it was  difficult to                                                                    
award  merit  pay  to   outstanding  employees  through  the                                                                    
established system. Mr. Brooks  thought that the state's pay                                                                    
system was  consistent with the  merit principals  set forth                                                                    
in the constitution.                                                                                                            
                                                                                                                                
2:16:35 PM                                                                                                                    
                                                                                                                                
Representative  Fairclough hypothesized  the situation  of a                                                                    
zero-based  budget   without  increases  and  asked   if  an                                                                    
administrator had  the flexibility  to change  an employee's                                                                    
pay  within  the existing  structure  by  changing steps  or                                                                    
ranges.  Mr.  Brooks  stressed  that  it  was  important  to                                                                    
distinguish  between statutory  employees and  those covered                                                                    
under  collective  bargaining   agreements  [unionized].  He                                                                    
affirmed   that   the   rate   of   pay   can   be   changed                                                                    
administratively through individual job reclassifications.                                                                      
                                                                                                                                
Representative  Gara  relayed  that   the  average  rate  of                                                                    
inflation  over the  last three  years was  2.7 percent.  He                                                                    
believed that a "meager" two  percent wage increase fails to                                                                    
keep up  with the cost of  living. He was supportive  of the                                                                    
increase and wished it was higher.                                                                                              
                                                                                                                                
Representative   Austerman  asked   when  the   last  salary                                                                    
increase was.  Mr. Brooks answered  that the  previous three                                                                    
fiscal years had increases of  five and one half percent the                                                                    
first  year  and  three percent  the  following  two  years.                                                                    
Representative  Austerman asked  if the  inflation rate  was                                                                    
2.7 percent over the last three years. Mr. Brooks affirmed.                                                                     
                                                                                                                                
2:20:27 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hawker  pointed  to  Section 6  of  the  bill  and                                                                    
inquired  about  the  absence  of  a  fiscal  note  for  the                                                                    
University  of   Alaska.  Mr.   Brooks  answered   that  the                                                                    
University of  Alaska was not  included in HB  421. Co-Chair                                                                    
Hawker wondered why the Section  exists. Mr. Brooks supposed                                                                    
it was  a clarifying  section. He implied  that it  could be                                                                    
removed.                                                                                                                        
                                                                                                                                
Co-Chair  Hawker wondered  if the  rules that  determine how                                                                    
the  legislative  branch  sets   the  range  increments  are                                                                    
referenced in  the legislation. Mr. Brooks  related that the                                                                    
legislative staff pay rules are  covered under the reference                                                                    
to Title 24 on page 1, line 9 of the bill.                                                                                      
HB  421  was  HEARD  and   HELD  in  Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
                                                                                                                                
SENATE BILL NO. 199                                                                                                           
                                                                                                                                
     "An Act providing for a two-year funding cycle for                                                                         
     medical assistance coverage for dentures."                                                                                 
                                                                                                                                
2:24:31 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
2:24:55 PM          AT EASE                                                                                                   
2:29:50 PM          RECONVENED                                                                                                
                                                                                                                                
SENATOR   JOHNNIE  ELLIS,   SPONSOR,   explained  that   the                                                                    
legislation would  allow clients covered under  the Medicaid                                                                    
Adult Preventative  Dental program  (APD) to get  a complete                                                                    
set  of upper  and lower  dentures in  same fiscal  year. He                                                                    
remarked that  this would  allow the  client to  "chew their                                                                    
food."  The plan  to  divide the  denture  benefit into  two                                                                    
fiscal  years was  adopted  as a  cost  savings measure.  He                                                                    
shared  a  personal  story  of  a  constituent's  experience                                                                    
needing dentures  under adult  dental Medicaid  that spurred                                                                    
his involvement  with the legislation.  He relayed  that the                                                                    
constituent   was  distraught   and  contemplating   suicide                                                                    
because he  could not  eat or  speak clearly  without teeth.                                                                    
Acquiring half a  set of dentures was  useless and prolonged                                                                    
his misery for  an entire year. He believed  that there will                                                                    
be a cost savings to the program with the legislation.                                                                          
                                                                                                                                
2:33:17 PM                                                                                                                    
                                                                                                                                
Representative  Foster  wondered  what  the  intent  of  the                                                                    
original  legislation was;  to  divide  the denture  benefit                                                                    
into two fiscal years. Senator  Ellis restated that it was a                                                                    
cost  containment measure  intended  to  divide the  benefit                                                                    
over  fiscal years.  He felt  that overall  the program  was                                                                    
"great" and well  intended but this aspect  was not properly                                                                    
considered. He believed that this  type of situation created                                                                    
public  skepticism toward  government  and  could be  easily                                                                    
remedied to restore credibility.                                                                                                
                                                                                                                                
DR. DAVID  LOGAN, DDS, DENTIST,  ALASKA DENTAL  SOCIETY (via                                                                    
teleconference), testified  in favor of the  legislation. He                                                                    
indicated that  the program  benefits all  parties involved.                                                                    
The  patient's  dignity  and  quality  of  health  would  be                                                                    
restored.  The dentist  would  deliver  the denture  service                                                                    
more  effectively by  performing the  same procedures  for a                                                                    
set of  dentures once, rather  than individually;  that also                                                                    
reduces  patient travel  expenses for  multiple visits  from                                                                    
rural  areas. The  efficiency would  create cost  savings to                                                                    
the state.  There would  also be  a preventative  benefit by                                                                    
the  removal   of  diseased   and  abscessed   teeth  before                                                                    
infection  sets  in  and   requires  additional  dental  and                                                                    
expensive(i.e.  emergency  room  visits)  medical  services;                                                                    
creating additional cost savings.                                                                                               
                                                                                                                                
Co-Chair Hawker cited the fiscal  note for the Department of                                                                    
Health and  Social Services,  FN2 (DHSS),  in the  amount of                                                                    
$935 thousand  for FY  2011. He  noted that  the expenditure                                                                    
decreases to $467.5 thousand in FY  2012 and is zero for the                                                                    
subsequent years.  He wondered if  the program has  a sunset                                                                    
provision and asked for an explanation of the fiscal note.                                                                      
                                                                                                                                
JON SHERWOOD, MEDICAID SPECIAL  PROJECTS, DIVISION OF HEALTH                                                                    
CARE  SERVICES, DEPARTMENT  OF HEALTH  AND SOCIAL  SERVICES,                                                                    
answered  that the  sunset on  the  Adult Preventive  Dental                                                                    
program had  been eliminated. He  furthered that  the fiscal                                                                    
note   reflects   an   initial   anticipated   increase   in                                                                    
expenditures as  APD provides both upper  and lower dentures                                                                    
in the same fiscal year for  the first two years. There will                                                                    
be patients  receiving their second year  denture along with                                                                    
new patients  entitled to both  dentures in the  same fiscal                                                                    
year.  The  department feels  that  by  the third  year  the                                                                    
program will have caught up  with the initial impacts of the                                                                    
expanded benefit.                                                                                                               
                                                                                                                                
2:43:11 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker asked if the  demand for the APD program was                                                                    
expected to  decline. Mr. Sherwood  replied that  the fiscal                                                                    
note does not  assume a decrease in the  out years. Co-Chair                                                                    
Hawker recalled that  in the early years of  the APD program                                                                    
costs were  overestimated. Co-Chair  Hawker wondered  if the                                                                    
same  situation applied  to the  fiscal  note. Mr.  Sherwood                                                                    
explained that  fiscal notes  reflect the  department's best                                                                    
reasonable estimate of costs.                                                                                                   
                                                                                                                                
Representative  Austerman asked  what the  original estimate                                                                    
of the program's cost was.  Mr. Sherwood guessed that it was                                                                    
approximately $10 million.                                                                                                      
                                                                                                                                
                                                                                                                                
Co-Chair  Hawker  remembered  that  the  original  APD  bill                                                                    
placed a  limit on the  aggregate amount of  funds available                                                                    
for the  program in  a year. The  aggregate cap  was removed                                                                    
from  the  program  when  the  sunset  was  eliminated.  The                                                                    
utilization of  the program was  under anticipated  costs at                                                                    
approximately $7.5  million, half of the  amount was federal                                                                    
funds and half was general funds.                                                                                               
                                                                                                                                
Representative Austerman  asked how much money  is currently                                                                    
appropriated for the APD program  excluding the fiscal note.                                                                    
Mr. Sherwood  did not  know. He wanted  to clarify  that the                                                                    
APD program included many other services besides dentures.                                                                      
                                                                                                                                
2:48:54 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hawker reported  that the  FY 2009  actual expense                                                                    
level was $5.9 million, and  the FY 2010 total appropriation                                                                    
was $7.3  million. The  FY 2008  governors request  was $8.1                                                                    
million.                                                                                                                        
                                                                                                                                
Representative  Austerman felt  that  the department  should                                                                    
know  the amount  currently appropriated  in the  budget for                                                                    
the  program. Co-Chair  Hawker agreed  that the  fiscal note                                                                    
request appeared speculative.                                                                                                   
                                                                                                                                
Mr. Sherwood  explained that the  benefit is  relatively new                                                                    
and the fiscal  note amount was based on a  best estimate of                                                                    
the  legislations  impact  regardless  of  the  base  amount                                                                    
appropriated.                                                                                                                   
                                                                                                                                
Representative Gara  observed that out of  the $935 thousand                                                                    
fiscal note  (FN 2 (DHS))  expenditure, $626.5  thousand are                                                                    
federal  funds and  $308.6 thousand  are  general funds.  He                                                                    
discerned  that  the  "upfront"  additional  cost  for  both                                                                    
dentures this year means the  expenditures will be that much                                                                    
less next  year. He felt  that over  the long term  the same                                                                    
amount  of money  will  be  spent and  the  fiscal note  was                                                                    
misleading; it  only appears there  will be extra  costs. He                                                                    
deduced  that the  initial costs  will be  leveled out  to a                                                                    
zero dollar increment  over the long term.  He surmised that                                                                    
the department should request  additional funds for services                                                                    
provided this year but request less for next year.                                                                              
                                                                                                                                
2:53:46 PM                                                                                                                    
                                                                                                                                
Representative  Kelly commented  that  he  agreed with  Rep.                                                                    
Gara that the increment "washes  out" over time and supports                                                                    
the legislation.                                                                                                                
                                                                                                                                
Co-Chair  Hawker shared  that  he authored  the initial  APD                                                                    
bill  because the  only dental  Medicaid services  available                                                                    
for adults was for a  crisis situation which the patient had                                                                    
to experience  infection or acute  pain. He felt that  was a                                                                    
"barbaric" system.                                                                                                              
                                                                                                                                
Representative Fairclough  asked about differences  of sixty                                                                    
percent and  fifty seven percent  in the federal  match rate                                                                    
between FY  2011 and  FY 2012 depicted  on the  fiscal note.                                                                    
Mr.  Sherwood  explained that  the  decline  in the  federal                                                                    
match  rate in  FY 2012  is due  to the  phasing out  of the                                                                    
stimulus funds.                                                                                                                 
                                                                                                                                
Vice-Chair  Thomas asked  about the  annual denture  benefit                                                                    
limit in terms of lost dentures.                                                                                                
                                                                                                                                
2:58:33 PM                                                                                                                    
                                                                                                                                
Mr. Sherwood  answered that there  is a dollar limit  on the                                                                    
amount  of annual  dental benefit,  if replacement  dentures                                                                    
exceeds the  limit a  patient would have  to wait  until the                                                                    
second year.  The annual monetary  limit is only  enough for                                                                    
an upper or lower denture.                                                                                                      
                                                                                                                                
Co-Chair Hawker directed attention to  the fiscal note, FN 1                                                                    
(DHS) that was  zeroed out in Senate Finance.  He noted that                                                                    
the   fiscal  note   had  requested   a  personal   services                                                                    
expenditure of $183.3 thousand for  two full time employees.                                                                    
He  cited a  new fiscal  note,  from the  department in  the                                                                    
amount of $147.9  thousand dollars for one  employee for one                                                                    
year.  He  asked for  an  explanation  of the  request.  Mr.                                                                    
Sherwood  indicated that  originally the  department thought                                                                    
that the  claims processing  system could  not handle  a two                                                                    
year  spending  limit and  that  claims  would be  processed                                                                    
manually. Subsequently,  the department was able  to come up                                                                    
with a programming solution. The  new fiscal note reflects a                                                                    
request  for $50  thousand to  enhance  the existing  claims                                                                    
processing system or the new  system that is currently being                                                                    
developed. The remaining  amount is for one  person to track                                                                    
and  process   authorizations  until  the  new   system  can                                                                    
accommodate  automated processing.  The person  will not  be                                                                    
hired if the automated system is working.                                                                                       
                                                                                                                                
                                                                                                                                
Co-Chair Hawker  asked if the position  should be classified                                                                    
as temporary on the fiscal note. Mr. Sherwood affirmed.                                                                         
                                                                                                                                
Co-Chair Hawker noted  that the new fiscal  note will become                                                                    
number  four  when published  and  adjusted  to reflect  the                                                                    
position as temporary.                                                                                                          
                                                                                                                                
Representative  Fairclough   informed  the   committee  that                                                                    
dental issues  contribute to the  suicide rate in  the state                                                                    
and she will support the bill.                                                                                                  
                                                                                                                                
Co-Chair  Hawker MOVED  to report  SB 199  out of  Committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
notes. There being NO OBJECTION, it was so ordered.                                                                             
                                                                                                                                
SB  199 was  REPORTED  out  of Committee  with  a "do  pass"                                                                    
recommendation  and with  attached  new fiscal  note by  the                                                                    
Department  of Health  and  Social  Services and  previously                                                                    
published fiscal note: FN2 (DHS).                                                                                               
                                                                                                                                
3:08:34 PM          AT EASE                                                                                                   
6:25:56 PM          RECONVENED                                                                                                
                                                                                                                                
                                                                                                                                
HOUSE BILL NO. 424                                                                                                            
                                                                                                                                
     "An Act providing  for and relating to  the issuance of                                                                    
     general obligation  bonds in a principal  amount of not                                                                    
     more  than $1,000,000  for the  purpose  of paying  the                                                                    
     cost of  education projects for public  schools and the                                                                    
     University of  Alaska; and  providing for  an effective                                                                    
     date."                                                                                                                     
                                                                                                                                
6:26:02 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker  MOVED to  ADOPT CS  HB 424(FIN)  Work Draft                                                                    
26-LS1649\P as a working document before the committee.                                                                         
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
JAMES   ARMSTRONG,  STAFF,   REPRESENTATIVE  BILL   STOLTZE,                                                                    
explained the CS.  He stated that HB 424 is  a request for a                                                                    
$384.2 million  general fund bond  authority and  if adopted                                                                    
would be sent to voters for the November 2010 general                                                                           
election.                                                                                                                       
                                                                                                                                
Mr. Armstrong presented a brief summary of the legislation                                                                      
by section:                                                                                                                     
                                                                                                                                
     · Section 1, specifies the amount of the bond.                                                                             
                                                                                                                                
     · Section 2, contains the education project fund. He                                                                       
        added that is the standard language for bond bills.                                                                     
                                                                                                                                
     · Section 3, relates to the Mount Edgecombe High                                                                           
        School aquatic  facility  in  Sitka  and  the  State                                                                    
        Library Archives and Museum facility  in Juneau that                                                                    
        will be bonded in the amount of $20 million for each                                                                    
        project ($40 million total).                                                                                            
                                                                                                                                
     · Section 4, identifies three school replacements and                                                                      
        renovations in western Alaska for a  total of $128.5                                                                    
        million.                                                                                                                
                                                                                                                                
Co Chair  Stoltze interjected that  these three  schools are                                                                    
referred to  as the  Kasayulie Schools  in reference  to the                                                                    
lawsuit and eventual judgment that  lead to changes in rural                                                                    
school funding.                                                                                                                 
                                                                                                                                
Mr. Armstrong continued the sectional presentation with:                                                                        
                                                                                                                                
     · Section 5 identifies the University of Alaska's                                                                          
        Valley Center for Art and Learning  on the Matanuska                                                                    
        Susitna (Mat-Su)  Campus,  the  Community Arena  and                                                                    
        Athletic  Center  in  Anchorage,  the  Life  Science                                                                    
        Classroom in Fairbanks,  two projects for  the Kenai                                                                    
        Campus's student  housing and  Career and  Technical                                                                    
        Education  Center  and  the   Prince  William  Sound                                                                    
        Community College  campus  renovation  and  renewal.                                                                    
        Total $161.8 million.                                                                                                   
                                                                                                                                
     · Section 6 identifies the Department of Fish and                                                                          
        Game's Near Island  Research facility  {$20 million)                                                                    
        in Kodiak.                                                                                                              
                                                                                                                                
     · Section 7 names the Department of Commerce,                                                                              
        Community and  Economic  Development  grants  for  a                                                                    
        total  of  $33.9  million.  He  noted  the  list  of                                                                    
        projects begin on  page 4,  of the  legislation. The                                                                    
        first seven projects are for library construction in                                                                    
        Anchorage,  Cordova,  Kenai,  Mat-Su,  North  Slope,                                                                    
        Petersburg,  and  Seward.   The  eighth   and  ninth                                                                    
        projects are located on Prince of Wales Island for a                                                                    
        vocational  education  center  in  Klawock  and  the                                                                    
        Northwest Magnate School and Kotzebue High School in                                                                    
        the Northwest Arctic Borough.                                                                                           
                                                                                                                                
     · Section 8 appropriates the cost of issuing the bond                                                                      
        per the Department of Revenue; total $4,610.400.                                                                        
                                                                                                                                
                                                                                                                                
6:30:14 PM                                                                                                                    
                                                                                                                                
Mr. Armstrong noted  that the bonds were  eligible under the                                                                    
Build  America Bond  Act  as part  of  the federal  stimulus                                                                    
program  (ARRA); the  bonds  would need  to  be sold  before                                                                    
December  31,   2010.  Upon   voter  approval   the  federal                                                                    
government  will pay  thirty five  percent  of the  interest                                                                    
over the twenty year life of the bond.                                                                                          
                                                                                                                                
JERRY  BURNETT, DEPUTY  COMMISSIONER, DIVISION  OF TREASURY,                                                                    
DEPARTMENT  OF  REVENUE,  clarified  that  the  program  was                                                                    
extended through December 2011.                                                                                                 
                                                                                                                                
Representative Doogan asked if  the identified projects were                                                                    
pieces  of   projects  rather   than  whole   projects.  Mr.                                                                    
Armstrong  replied  that  only   two  University  of  Alaska                                                                    
projects (projects  two and three) were  funded in portions,                                                                    
their  balance will  be included  in the  capital budget  as                                                                    
general funds.  In the  event the bonds  are not  adopted by                                                                    
voters the  two projects would move  forward with previously                                                                    
appropriated cash on  hand; $25 million for an  arena on the                                                                    
Anchorage Campus and $38 million  for a life sciences center                                                                    
for the Fairbanks campus.                                                                                                       
                                                                                                                                
Co-Chair  Stoltze  interjected  that   $20  million  of  the                                                                    
existing funds are comprised of University revenue bonds.                                                                       
                                                                                                                                
6:34:07 PM                                                                                                                    
                                                                                                                                
Co-Chair Hawker announced that not  all of the bond projects                                                                    
in  HB 424  are for  entirely  new facilities.  Many of  the                                                                    
projects  such as  the Northwest  Magnet School  and library                                                                    
projects   are  for   renovations,  improvements,   etc.  He                                                                    
cautioned against creating public misperceptions.                                                                               
                                                                                                                                
Mr. Armstrong mentioned that the  library projects on page 4                                                                    
were  currently  included in  the  Senate's  version of  the                                                                    
capitol budget and if approved  as part of the bond package,                                                                    
it was the  intent of the chair to remove  them in the House                                                                    
version.                                                                                                                        
                                                                                                                                
Representative Doogan  asked for more information  about the                                                                    
Near  Island   Research  Facility   listed  in   Section  6.                                                                    
Representative Austerman  explained that it will  be located                                                                    
in  Kodiak  next to  the  National  Oceanic and  Atmospheric                                                                    
Association   (NOAA)  and   the  University's   Fishery  and                                                                    
Technology  Center   buildings.  The  facility   will  house                                                                    
Department  of   Fish  and   Game  offices,   research,  and                                                                    
educational facilities.                                                                                                         
6:38:14 PM                                                                                                                    
                                                                                                                                
Representative Gara  cited the  university projects  on page                                                                    
3, line  8, and asked  what the regent priorities  were. Co-                                                                    
Chair  Stoltze  stated  that projects  number  2  (Community                                                                    
arena  and athletic  center) and  3 (Life  Science Classroom                                                                    
and laboratory building) were  regents priorities. The other                                                                    
projects have been on the regents lists in the past.                                                                            
                                                                                                                                
Mr. Armstrong pointed out that  all of the ten previous bond                                                                    
propositions put forward to voters  since statehood had been                                                                    
approved.                                                                                                                       
                                                                                                                                
Representative   Foster   underscored  the   importance   of                                                                    
resolving the  Kasayulie case and  contended that  the three                                                                    
school projects were  a positive step. He  reported that the                                                                    
Alakanuk  School was  two hundred  and  twenty percent  over                                                                    
capacity.                                                                                                                       
                                                                                                                                
Co-Chair Hawker  relayed that the  three school  projects in                                                                    
HB 424 were  the three top schools by ranking  on the school                                                                    
construction list  prepared by  the Department  of Education                                                                    
and Early Development. Mr. Armstrong affirmed.                                                                                  
                                                                                                                                
Representative  Gara asked  if any  projects in  HB 424  are                                                                    
included in the Senate version of the capital budget bill.                                                                      
                                                                                                                                
6:41:36 PM                                                                                                                    
                                                                                                                                
Mr. Armstrong listed  the seven library projects  on page 4,                                                                    
lines 1-12,  that are in  the Senate version of  the capital                                                                    
budget:  Loussac  Library,  Anchorage;  Cordova  Center  and                                                                    
Library    Cordova;  Community  Library  expansion    Kenai;                                                                    
Sutton  Community Library  and  Resource Center,  Matanuska-                                                                    
Susitna  ;  Tuzzy  Library expansion,  North  Slope;  Public                                                                    
Library, Petersburg; Community library ,Seward.                                                                                 
                                                                                                                                
Co-Chair Stoltze closed public testimony.                                                                                       
                                                                                                                                
Mr. Armstrong cited that the  Department of Revenue's fiscal                                                                    
note  accompanying  the  legislation   depicts  the  sum  of                                                                    
$29,095,000  in  expenditures  for  the out  years  FY  2012                                                                    
through FY 2016.  The amount will be decreased  in a revised                                                                    
fiscal note to $28,773,000.                                                                                                     
6:46:08 PM                                                                                                                    
                                                                                                                                
Representative  Doogan  asked  if  the intent  was  to  find                                                                    
complete funding  for the  two projects  that would  only be                                                                    
partially funded  by the  general obligations  bonds, before                                                                    
the end of session. Co-Chair Stoltze affirmed.                                                                                  
                                                                                                                                
Representative Gara  requested to  hear from  the university                                                                    
regarding  the  university  projects.  He  wondered  if  the                                                                    
university was in support of the list.                                                                                          
                                                                                                                                
6:49:34 PM                                                                                                                    
                                                                                                                                
WENDY   REDMAN,   VICE    PRESIDENT,   STATEWIDE   PROGRAMS,                                                                    
UNIVERSITY   OF  ALASKA,   responded  that   the  university                                                                    
supported  the projects.  She noted  that the  Life Sciences                                                                    
facility  in  Fairbanks  was  the  major  priority  for  the                                                                    
university  this year.  The other  projects  were on  campus                                                                    
priority lists.                                                                                                                 
                                                                                                                                
Representative   Gara   inquired  about   the   university's                                                                    
priority for funding for engineering  buildings.  Ms. Redman                                                                    
replied  that  the  university  requested  $10  million  for                                                                    
planning  engineering  facilities   for  the  Anchorage  and                                                                    
Fairbanks campuses.  She reported  that the request  was not                                                                    
included in the governor's  budget. They were considered the                                                                    
most important  projects that the university  wanted to move                                                                    
forward  after  the  Life   Sciences  building.  The  Senate                                                                    
included $5 million in the  capital budget for the Anchorage                                                                    
engineering facility and nothing for Fairbanks.                                                                                 
                                                                                                                                
Co-Chair Stoltze  suspected that all the  bond projects were                                                                    
on the regents' list at some point.                                                                                             
                                                                                                                                
6:53:14 PM                                                                                                                    
                                                                                                                                
Representative  Gara voiced  frustrations with  the shortage                                                                    
of  university  housing  in Anchorage.  He  felt  that  more                                                                    
housing at  the main  campuses of Anchorage,  Fairbanks, and                                                                    
Juneau would create a  vibrant, statewide university system.                                                                    
Ms. Redman reported that the  university created a committee                                                                    
to work on housing in  collaboration with AHFC to facilitate                                                                    
the  project  and  to  expect  a plan  to  come  before  the                                                                    
legislature in the near future.                                                                                                 
                                                                                                                                
Representative Fairclough reported that  she had two boys at                                                                    
the University  of Alaska  in Fairbanks,  in order  to avoid                                                                    
any conflicts of interest.                                                                                                      
                                                                                                                                
Representative Gara  inquired if the $20  million Department                                                                    
of Fish and Game Near  Island facility was a state priority.                                                                    
Representative Austerman explained that  the project was the                                                                    
top priority  on the capital  improvement list for  the City                                                                    
and Borough of Kodiak.                                                                                                          
                                                                                                                                
Representative Gara  wondered if it  was a priority  for the                                                                    
Department of  Fish and  Game. Representative  Austerman was                                                                    
not certain.                                                                                                                    
6:58:51 PM                                                                                                                    
                                                                                                                                
Representative  Fairclough spoke  in support  of the  "Build                                                                    
America Bond"  projects. She commented that  projects had to                                                                    
be  chosen that  met the  requirements of  the program.  She                                                                    
voiced  that she  supported the  legislation  and liked  the                                                                    
concept  of the  thirty five  percent interest  payback. She                                                                    
believed the  package helped the  state save money  on these                                                                    
projects.                                                                                                                       
                                                                                                                                
Representative Salmon  wondered if  the bond  package amount                                                                    
was going to  grow. Co-Chair Stoltze stated that  he did not                                                                    
think the amount could grow. He  felt that there was a limit                                                                    
to the  debt threshold the  voters would approve.  He stated                                                                    
that the legislature would act  responsibly and leverage the                                                                    
available federal money over a  fair geographical balance in                                                                    
the state according to the constraints of the bond program.                                                                     
                                                                                                                                
Representative Gara  thought that  there has  been a  lot of                                                                    
criticism of the  federal government within the  state but a                                                                    
readiness to accept  federal funds. He pointed  out that the                                                                    
bill  was an  example of  something the  President has  done                                                                    
that was getting people back to work.                                                                                           
                                                                                                                                
7:02:28 PM                                                                                                                    
                                                                                                                                
                                                                                                                                
Co-Chair Hawker MOVED to report CSHB 424(FIN) out of                                                                            
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
CSHB 424(FIN) was REPORTED out of Committee with a "do                                                                          
pass" recommendation and with attached new fiscal note by                                                                       
the Department of Revenue.                                                                                                      
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 7:04 PM.                                                                                           
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
Energy Savings Performance Contracting Summary-DOT.pdf HFIN 4/11/2010 12:30:00 PM
HB 296
HB 296 AHFC SEP BondsL Sec Analysis.pdf HFIN 4/11/2010 12:30:00 PM
HB 296
HB 296 SEP bonds Sponsor Statement[1].pdf HFIN 4/11/2010 12:30:00 PM
HB 296
HB416 Sectional Analysis ver R.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Sponsor Statement ver R.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Supporting Documents History UMIFA and UPMIFA.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Supporting Documents UPMIFA_map.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Supporting Documents-Letter AG 3-18-10.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Supporting Documents-Letter AG 3-18-10.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Supporting Documents-Letter Foreaker Group.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Supporting Documents-Why Adopt UPMIFA.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
10 HB 421 FN - pay raise 2010.pdf HFIN 4/11/2010 12:30:00 PM
HB 421
HB421-LEG-LEG-3-30-10NEW.pdf HFIN 4/11/2010 12:30:00 PM
HB 421
HB 421 Gov Transmittal Letter.pdf HFIN 4/11/2010 12:30:00 PM
HB 421
hearing_req_HB421_040710.pdf HFIN 4/11/2010 12:30:00 PM
HB 421
SUmmary by Dept hb 421 SB 310.pdf HFIN 4/11/2010 12:30:00 PM
HB 421
SB 310
H FIN letters of support.pdf HFIN 4/11/2010 12:30:00 PM
SB199-DHSS-MAA-2-9-10.pdf HFIN 4/11/2010 12:30:00 PM
SB 199
SFIN backup information.pdf HFIN 4/11/2010 12:30:00 PM
SB 199
sponsor statement.pdf HFIN 4/11/2010 12:30:00 PM
SB 199
HB421-Ex Branch-4-8-10.pdf HFIN 4/11/2010 12:30:00 PM
HB 421
CSHB424(FIN)-DOR-TRS-4-10-10 GO Bonds for Education.pdf HFIN 4/11/2010 12:30:00 PM
HB 424
HB 424 Sample Ballot.pdf HFIN 4/11/2010 12:30:00 PM
HB 424
CS WORKDRAFT HB424 (FIN) P VERSION and Sectional.pdf HFIN 4/11/2010 12:30:00 PM
HB 424