Legislature(2013 - 2014)HOUSE FINANCE 519

04/11/2014 08:30 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 74 UNIVERSITY OF ALASKA BUILDING FUND TELECONFERENCED
Heard & Held
+= HB 316 WORKERS' COMPENSATION MEDICAL FEES TELECONFERENCED
<Bill Hearing Canceled>
+ HB 116 PERS CREDIT FOR MILITARY SERVICE TELECONFERENCED
<Bill Hearing Canceled>
+ SB 137 EXTEND SEISMIC HAZARDS SAFETY COMMISSION TELECONFERENCED
Moved Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 89 AQUATIC INVASIVE SPECIES TELECONFERENCED
Heard & Held
                  HOUSE FINANCE COMMITTEE                                                                                       
                      April 11, 2014                                                                                            
                         8:33 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
8:33:57 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stoltze called the  House Finance Committee meeting                                                                    
to order at 8:33 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Alan Austerman, Co-Chair                                                                                         
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Mark Neuman, Vice-Chair                                                                                          
Representative Mia Costello                                                                                                     
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative David Guttenberg                                                                                                 
Representative Lindsey Holmes                                                                                                   
Representative Cathy Munoz                                                                                                      
Representative Steve Thompson                                                                                                   
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Daniel George,  Staff, Representative Bill  Stoltze; Charlie                                                                    
Swanton,  Director, Division  of Sport  Fish, Department  of                                                                    
Fish and  Game; Ben Mulligan, Special  Assistant, Department                                                                    
of Fish and Game;  Brittany Hutchinson, Staff, Senator Click                                                                    
Bishop;  Kris Curtis,  Legislative Auditor,  Alaska Division                                                                    
of Legislative Audit; Heather  Shattuck, Staff, Senator Pete                                                                    
Kelly; Patrick Gamble, President, University of Alaska.                                                                         
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 89     AQUATIC INVASIVE SPECIES                                                                                              
                                                                                                                                
          HB 89 was HEARD and HELD in committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
HB 316    WORKERS' COMPENSATION MEDICAL FEES                                                                                    
                                                                                                                                
          HB 316 was SCHEDULED but not HEARD.                                                                                   
                                                                                                                                
SB 74     UNIVERSITY OF ALASKA BUILDING FUND                                                                                    
                                                                                                                                
          SB 74 was HEARD and HELD in committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
SB 137    EXTEND SEISMIC HAZARDS SAFETY COMMISSION                                                                              
                                                                                                                                
          SB 137 was REPORTED out of committee with a "do                                                                       
          pass" recommendation and with one previously                                                                          
         published fiscal impact note: FN1 (DNR).                                                                               
                                                                                                                                
HOUSE BILL NO. 89                                                                                                             
                                                                                                                                
     "An Act relating to the rapid response to, and control                                                                     
     of, aquatic invasive species and establishing the                                                                          
     aquatic invasive species response fund."                                                                                   
                                                                                                                                
8:34:36 AM                                                                                                                    
                                                                                                                                
Vice-Chair  Neuman MOVED  to  ADOPT  the proposed  committee                                                                    
substitute  for  HB  89, Work  Draft  28-LS0339\P  (Bullard,                                                                    
4/9/14).                                                                                                                        
                                                                                                                                
Co-Chair Stoltze OBJECTED for the purpose of discussion.                                                                        
                                                                                                                                
DANIEL   GEORGE,   STAFF,   REPRESENTATIVE   BILL   STOLTZE,                                                                    
explained the changes in the CS.  He relayed that on Page 2,                                                                    
lines 26 and 27, the  words "shall provide reasonable notice                                                                    
to affected property owners" had  been added to the bill for                                                                    
the sake  of clarity. He furthered  that on Page 3,  lines 5                                                                    
and 6, "aquatic evasive species"  had been specified to mean                                                                    
Northern  Pike,  didemnum  tunicate,  European  green  crab,                                                                    
spartina,  crayfish, or  another  organism  introduced to  a                                                                    
marine or  freshwater ecosystem  to which  it is  not native                                                                    
and  whose  introduction  causes,  or is  likely  to  cause,                                                                    
economic or environmental harm or harm to human health.                                                                         
                                                                                                                                
8:37:01 AM                                                                                                                    
                                                                                                                                
CHARLIE   SWANTON,  DIRECTOR,   DIVISION   OF  SPORT   FISH,                                                                    
DEPARTMENT OF  FISH AND GAME, testified  that the department                                                                    
was supportive of the changes.                                                                                                  
Representative   Guttenberg  wondered   if  there   was  any                                                                    
location in the state where Northern Pike was native.                                                                           
                                                                                                                                
Mr. Swanton replied  by and large was  a general description                                                                    
on the north side of the Alaska Range.                                                                                          
                                                                                                                                
Representative  Guttenberg asked  for verification  that the                                                                    
department would  not be  going after  Northern Pike  in its                                                                    
natural habitat. Mr. Swanton replied in the affirmative.                                                                        
                                                                                                                                
Representative Costello  asked if  Elodea was  considered an                                                                    
aquatic  invasive  species  under   the  bill.  Mr.  Swanton                                                                    
answered in the affirmative.                                                                                                    
                                                                                                                                
Co-Chair  Austerman  noted  that  in  the  past  moving  the                                                                    
Geoduck  from  Southeast Alaska  to  Kachemak  Bay had  been                                                                    
considered by  the department as moving  an invasive species                                                                    
and legislation  had been required  to overcome  that label.                                                                    
He asked if  "or another organism" could refer  to a similar                                                                    
situation.                                                                                                                      
                                                                                                                                
Mr. Swanton answered that the  species listed in the CS were                                                                    
believed by a  broad array of people as  posing the greatest                                                                    
risk. He said that the language was not all encompassing.                                                                       
                                                                                                                                
8:40:08 AM                                                                                                                    
                                                                                                                                
Co-Chair  Austerman hesitated  to include  the language  "or                                                                    
another organism" in the bill.                                                                                                  
                                                                                                                                
Representative Gara took issue  with the language pertaining                                                                    
to economic and environmental harm.                                                                                             
                                                                                                                                
Representative  Gara  asked  whether  the  invasive  species                                                                    
listed in  the original  bill had been  included in  the CS.                                                                    
Mr. Swanton replied in the affirmative.                                                                                         
                                                                                                                                
Representative  Gara wondered  if the  method of  removal of                                                                    
the species could include non-chemical means.                                                                                   
                                                                                                                                
BEN  MULLIGAN, SPECIAL  ASSISTANT,  DEPARTMENT  OF FISH  AND                                                                    
GAME, pointed to page 2, line 21:                                                                                               
                                                                                                                                
     In  responding  under  (b)  of   this  section  to  the                                                                    
     occurrence of freshwater  aquatic invasive species, the                                                                    
     department  shall respond  in  a  manner determined  to                                                                    
     cause the  least harm  to noninvasive  fish populations                                                                    
     that are used for recreational, personal use,                                                                              
     commercial, or subsistence purposes                                                                                        
                                                                                                                                
Mr. Mulligan  elaborated that the department  would chose an                                                                    
option that would get rid  of the invasive species and cause                                                                    
the least harm to resident populations.                                                                                         
                                                                                                                                
Vice-Chair Neuman  wondered if  the bill  would look  at the                                                                    
issue of species interfering with  the migration patterns of                                                                    
salmon.                                                                                                                         
                                                                                                                                
Mr. Swanton  replied that it  did not speak directly  to the                                                                    
issue. He  assured the committee  that the  department would                                                                    
pay attention to  the issue of range  extensions, which were                                                                    
typical after long periods of geological time.                                                                                  
                                                                                                                                
Vice-Chair  Neuman   spoke  of   the  pike   eradication  of                                                                    
Alexander  Creek. He  asked whether  the  bill would  expand                                                                    
similar  operations  in  the northern  district  where  pike                                                                    
seemed to be expanding further into salmon tributaries.                                                                         
                                                                                                                                
Mr.  Swanton   replied  that  he  was   unsure  whether  the                                                                    
legislation  would expand  the operation.  He said  that the                                                                    
department  planned  to  move  forward  with  a  variety  of                                                                    
projects to control of eradicate pike.                                                                                          
                                                                                                                                
8:47:19 AM                                                                                                                    
                                                                                                                                
Representative  Gara wondered  whether the  department would                                                                    
opt for non-action if the balance favored non-action.                                                                           
                                                                                                                                
Mr. Swanton answered  that non-action would be  on the table                                                                    
in  terms of  evaluation  before any  aggressive action  was                                                                    
taken.                                                                                                                          
                                                                                                                                
Co-Chair  Stoltze WITHDREW  his  OBJECTION.  There being  NO                                                                    
further OBJECTION, it was so ordered.                                                                                           
                                                                                                                                
Co-Chair Stoltze CLOSED public testimony.                                                                                       
                                                                                                                                
8:49:24 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
8:54:08 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HB 89 was HEARD and HELD in committee for further                                                                               
consideration.                                                                                                                  
                                                                                                                                
SENATE BILL NO. 137                                                                                                           
                                                                                                                                
     "An Act  extending the termination  date of  the Alaska                                                                    
     Seismic  Hazards Safety  Commission; and  providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
8:55:06 AM                                                                                                                    
                                                                                                                                
BRITTANY HUTCHINSON, STAFF, SENATOR CLICK BISHOP, read from                                                                     
a sponsor statement:                                                                                                            
                                                                                                                                
     Alaska has  more earthquakes than  any other  region in                                                                    
     the  U.S. and  is one  of the  most seismically  active                                                                    
     areas in  the world.   In fact, we are  approaching the                                                                    
     50th anniversary  of the  1964 Good  Friday Earthquake,                                                                    
     the most powerful in recorded North American history.                                                                      
                                                                                                                                
     Given  the historical  record and  inevitable potential                                                                    
     of future earthquake activity,  Alaska needs the Alaska                                                                    
     Seismic  Hazards   Safety  Commission.  The   ASHSC  is                                                                    
     statutorily designated as an  advisory body for seismic                                                                    
     hazard  safety  mitigation.   The  ASHSC's  overarching                                                                    
     purpose  is  to  analyze and  disseminate  information,                                                                    
     review  predictions  and   proposed  warnings,  and  to                                                                    
     provide recommendations for seismic safety mitigation.                                                                     
                                                                                                                                
      I  would  like to  see  the  termination date  of  the                                                                    
     Alaska  Seismic   Hazards  Safety   Commission  (ASHSC)                                                                    
     extended  from   June  30,  2014  to   June  30,  2020.                                                                    
     According  to the  Division of  Legislative Audit,  the                                                                    
     commission   has  a   demonstrated   public  need   and                                                                    
    therefore the termination date should be extended.                                                                          
                                                                                                                                
     The public  need is proven  and the public  interest is                                                                    
     served in the following ways:                                                                                              
                                                                                                                                
          1)   The  commission assists  with seismic  hazard                                                                    
          safety  training efforts.   For  example, in  2011                                                                    
          and   2012,  the   ASHSC   coordinated  with   the                                                                    
          Department  of Military  and  Veterans Affairs  to                                                                    
          facilitate training workshops  for volunteer first                                                                    
          responders  who  would   respond  after  a  severe                                                                    
          earthquake.                                                                                                           
          2)   They  hope  to significantly  improve  school                                                                    
          safety  by collaborating  with  the Department  of                                                                    
          Education and Early  Development on seismic issues                                                                    
          concerning  school  construction and  renovations.                                                                    
          Seismic hazard mitigation  efforts for schools are                                                                    
          an important  commission priority, as  schools are                                                                    
          critical infrastructure.                                                                                              
          3)   The  ASHSC served  the  public's interest  by                                                                    
          making seismic  hazards mitigation recommendations                                                                    
          to the governor,  legislature and private entities                                                                    
          through annual reports.                                                                                               
          4)   The      commission     helps      facilitate                                                                    
          collaboration   amongst   agencies  with   related                                                                    
          missions  and private  sector entities  on seismic                                                                    
          hazard mitigation.                                                                                                    
                                                                                                                                
KRIS  CURTIS,   LEGISLATIVE  AUDITOR,  ALASKA   DIVISION  OF                                                                    
LEGISLATIVE AUDIT,  relayed that the division  had conducted                                                                    
a sunset  review of the  commission which was  documented in                                                                    
report form Legislative Audit (copy  on file). She said that                                                                    
an audit of  the commission had last been  conducted in 2011                                                                    
and  at  that   time  it  had  been   recommended  that  the                                                                    
commission be extended for 4  years; the commission had been                                                                    
extended  for 2  years at  that time.  She related  that the                                                                    
division had concluded that the  commission operating in the                                                                    
public's  interest and  recommended that  the commission  be                                                                    
extended 6  years until the  year 2020. She stated  that the                                                                    
audit had  identified 4 areas for  operational improvements,                                                                    
which could be found on Page 9 of the report:                                                                                   
                                                                                                                                
     The commission should improve prioritization and                                                                           
     accountability    within    its   strategic    planning                                                                    
     documents.                                                                                                                 
                                                                                                                                
Ms. Curtis  relayed that  the prior  sunset audit  had found                                                                    
that   the   commission   lacked  a   clear   strategy   for                                                                    
prioritizing and monitoring its  efforts. The commission had                                                                    
made  progress  in resolving  the  finding  by developing  a                                                                    
strategic  plan that  identified  objectives and  strategies                                                                    
that  correlated with  the commissions  mandated powers  and                                                                    
duties.  She  shared  that   the  division  recommended  the                                                                    
following additions to help the  commission more fully focus                                                                    
its efforts:                                                                                                                    
                                                                                                                                
     1.  Clearly  prioritizing tasks  -  while  each of  the                                                                    
     tasks in the strategic plan  is assigned a priority, 27                                                                    
     of  the  29  tasks   are  listed  as  "important."  The                                                                    
     commission goals and action lists do not contain                                                                           
     priorities;                                                                                                                
     2. Consistently identifying the person or subcommittee                                                                     
     responsible for task completion; and                                                                                       
     3. Associating goals and action lists with the                                                                             
     commission's overarching strategic plan objectives and                                                                     
     consistently identifying a specific outcome.                                                                               
                                                                                                                                
Ms.  Curtis  said  that   by  approving  accountability  and                                                                    
prioritization  the commission  could improve  their ability                                                                    
to serve the  public. She pointed out to  the committee that                                                                    
on  Page  12 of  the  report  the  division had  found  that                                                                    
recommendations   issues   by   the   commission   had   not                                                                    
consistently  identified  the organization  responsible  for                                                                    
implementing  their  recommendation; additionally,  not  all                                                                    
recommendations  adequately  identified  the  action  to  be                                                                    
performed, and  at times the commission  was uncertain about                                                                    
where to direct their  recommendations. She relayed that the                                                                    
division recommended  that the commission ensure  that their                                                                    
recommendations   clearly    identified   the   organization                                                                    
responsible for implementing an action  and the action to be                                                                    
performed.   Additionally,   the  commission   should   seek                                                                    
assistance from  the Department  of Natural  Resources (DNR)                                                                    
management   and  identify   the  appropriate   organization                                                                    
responsible for  implementing recommendations. She  spoke to                                                                    
two   housekeeping   recommendations,  one   directing   the                                                                    
commission   to   replace  chronically   absent   commission                                                                    
members, and  another to  the commission  and the  Office of                                                                    
the Governor to work together  to fill vacant positions in a                                                                    
timely manner.                                                                                                                  
                                                                                                                                
Vice-Chair  Neuman  asked  how  many  vacant  positions  the                                                                    
commission had  and how  long, on  average, did  they remain                                                                    
vacant.                                                                                                                         
                                                                                                                                
Ms.  Curtis  replied  that  recommendation   3  on  Page  11                                                                    
identified the number  of positions and the  duration of the                                                                    
vacancies. She said that it  was an 11 member commission and                                                                    
that vacancies were expected given  the number of positions.                                                                    
She stated  that when evaluating how  material the vacancies                                                                    
were the  division weighed the  effect the absence  of those                                                                    
members  had  on  commission business.  She  mentioned  that                                                                    
during  FY12-FY13 there  had been  a Department  of Military                                                                    
and  Veterans Affairs  (DMVA) seat  that was  vacant for  10                                                                    
months; there had been a  delayed appointment due to unclear                                                                    
guidance about  appointment procedures which lead  to a lack                                                                    
of quorum.                                                                                                                      
Vice-Chair Neuman felt  that there were a lot  of members on                                                                    
the commission.  He wondered if  one of  the recommendations                                                                    
had been to reduce the number of members.                                                                                       
                                                                                                                                
9:01:17 AM                                                                                                                    
                                                                                                                                
Ms.  Curtis replied  in the  negative. She  believed 6  to 8                                                                    
years ago  the commission's membership had  been expanded by                                                                    
the  legislature.  She stated  that  given  the past  policy                                                                    
decision the audit  did not consider changing  the number of                                                                    
positions.                                                                                                                      
                                                                                                                                
Co-Chair  Stoltze noted  that in  2011  the legislature  had                                                                    
spent  an  inordinate amount  of  time  on the  issue.  Many                                                                    
members of  the business community  had come out  in support                                                                    
of the commission.                                                                                                              
                                                                                                                                
Co-Chair Stoltze OPENED public testimony.                                                                                       
                                                                                                                                
Co-Chair Stoltze CLOSED public testimony.                                                                                       
                                                                                                                                
He pointed to the fiscal  impact note from the Department of                                                                    
Natural Resources.                                                                                                              
                                                                                                                                
Vice-Chair Neuman  MOVED to REPORT  SB 137 out  of committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note.                                                                                                                           
                                                                                                                                
SB  137 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation  and  with  one previously  published  fiscal                                                                    
impact note: FN1 (DNR).                                                                                                         
                                                                                                                                
9:04:00 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:04:48 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 74                                                                                                            
                                                                                                                                
     "An  Act creating  the  University  of Alaska  building                                                                    
     fund for  the payment  by the  University of  Alaska of                                                                    
     the costs  of use, management,  operation, maintenance,                                                                    
     and   depreciation   of   space   in   buildings;   and                                                                    
     authorizing the  Board of Regents of  the University of                                                                    
     Alaska to designate buildings for which the fund is to                                                                     
     be used."                                                                                                                  
                                                                                                                                
9:04:59 AM                                                                                                                    
                                                                                                                                
HEATHER SHATTUCK, STAFF, SENATOR  PETE KELLY, testified that                                                                    
SB 74 would  create the University Building Fund  (UBF) as a                                                                    
special account  in the  general funds.  She stated  that it                                                                    
was  modeled after  the Alaska  Public Building  Fund, which                                                                    
had  been   operated  successfully  by  the   Department  of                                                                    
Administration (DOA)  since 2000. She shared  that currently                                                                    
there was approximately $1.2  billion in backlog maintenance                                                                    
for the  University's 7 million  square feet  of facilities.                                                                    
She  said  that the  University  was  shifting to  long-term                                                                    
strategic  planning   to  adequately  address   the  ongoing                                                                    
maintenance issue.  She relayed  that the  UBF would  be one                                                                    
tool to  arm the University to  do its part in  order to get                                                                    
out from  under the billion  dollar problem and  ensure that                                                                    
facilities were  properly taken care of  while bringing down                                                                    
the deferred  maintenance to  a responsible  and sustainable                                                                    
level.  She  related that  the  fund  forced departments  to                                                                    
fully  think through  every square  inch of  space that  was                                                                    
actually  necessary.   She  said  that  with   the  UBF  the                                                                    
University  could  begin   charging  departments  for  rent,                                                                    
encourage improved  space utilization, and  see efficiencies                                                                    
in operations. She shared that  collecting rent from tenants                                                                    
and departments  was an  important feature  of the  fund and                                                                    
part of  the rent  could come from  federal grants  that the                                                                    
University already received and  designated of portion of to                                                                    
be  used for  maintenance.  She furthered  that the  concept                                                                    
would allow the  University to first list  new buildings and                                                                    
those  under  15  years  of age.  As  older  buildings  were                                                                    
rehabbed  through  renewal  and  replacement,  and  deferred                                                                    
maintenance, they  would be added  to the fund so  that they                                                                    
did  not  backslide  into  the  same  situation  again.  She                                                                    
elaborated that  the model  of charging  for space  had been                                                                    
implemented at several large  universities across the United                                                                    
States and  experience had shown  that it  improved internal                                                                    
discipline,  leading  to   improved  space  utilization  and                                                                    
efficiencies  in operation.  She  spoke to  the letter  from                                                                    
Legislative  Legal  clarifying  that  it did  not  create  a                                                                    
dedicated fund (copy on file).                                                                                                  
                                                                                                                                
9:09:05 AM                                                                                                                    
                                                                                                                                
PATRICK GAMBLE,  PRESIDENT, UNIVERSITY OF  ALASKA, testified                                                                    
that the University sought a  paradigm change with regard to                                                                    
the  way   to  programmatically  examine  ways   to  address                                                                    
deferred maintenance,  buildings on  the verge of  being put                                                                    
on  the  deferred  maintenance   list,  and  operations  and                                                                    
maintenance   costs.  He   said  that   when  the   deferred                                                                    
maintenance  cost   got  so  big  that   failures  occurred,                                                                    
operations and maintenance  money had to be used  to fix the                                                                    
problem. He  stated that there  were 174  academic buildings                                                                    
in the  system, 8 of  which would cost  more to fix  up than                                                                    
they were worth  and should be torn down. He  opined that it                                                                    
cost a lot  to tear down a  building but that it  cost a lot                                                                    
more not to.  He related that there were 28  building with a                                                                    
low net asset  value, but the function  inside the buildings                                                                    
had a  high University  value with  regard to  education and                                                                    
research.  The   deferred  maintenance  backlog   for  those                                                                    
buildings was $300 million, the  renovation and repair (R&R)                                                                    
backlog was $100  million. He explained that  those were the                                                                    
main  campus  buildings,  mostly   in  Fairbanks,  and  once                                                                    
building  of this  kind went  into deferred  maintenance the                                                                    
risks  involved in  working in  the buildings  increased. He                                                                    
shared that  in the past  they University would  come before                                                                    
the  legislature each  year and  attempt to  break the  work                                                                    
that needed to  be done into categories; only  10 percent of                                                                    
what was  asked over the years  had been given to  help with                                                                    
the problem.                                                                                                                    
                                                                                                                                
9:12:51 AM                                                                                                                    
                                                                                                                                
Mr.   Gamble   expressed   enthusiastic  support   for   the                                                                    
legislation. He noted that in  a tough budget year, like the                                                                    
on the legislature currently faced,  the seed money to start                                                                    
the fund would be problematic  but had to begin sometime. He                                                                    
stressed that  there were  many different  sources available                                                                    
for funding:  excess capital appropriations,  donations, and                                                                    
rental  income.  He  suggested  that  online  classes  could                                                                    
lessen  the need  for academic  buildings. He  believed that                                                                    
there  would not  be much  money put  into the  fund in  its                                                                    
first year and  it could take up to 5  years before the fund                                                                    
was fruitful. He  said that each year  the legislature would                                                                    
have the appropriation  responsibility, while the University                                                                    
sought different sources  for the fund. He  thought a source                                                                    
could  be the  Alaska  Sovereign Education  fund. He  shared                                                                    
that  the fund  used an  education funding  source from  oil                                                                    
royalties being diverted into an education account.                                                                             
                                                                                                                                
9:18:51 AM                                                                                                                    
                                                                                                                                
Representative  Holmes  wondered   whether  there  had  been                                                                    
discussions about putting any seed  money in the fund in the                                                                    
present year.                                                                                                                   
                                                                                                                                
Mr. Gamble replied in the negative.                                                                                             
                                                                                                                                
Representative  Holmes  asked  whether  the  fund  would  be                                                                    
managed for sustainability.                                                                                                     
                                                                                                                                
Mr. Gamble replied that it  would have an inflation proofing                                                                    
element to it and that sustainability was a goal.                                                                               
                                                                                                                                
Representative  Holmes she  spoke of  the Alaska  Children's                                                                    
Trust  as a  sub-account of  the general  fund. She  thought                                                                    
that the legislature should  encourage private donations but                                                                    
wondered whether  people would donate  if the fund  was part                                                                    
of the general fund.                                                                                                            
                                                                                                                                
Mr. Gamble answered that a lot  of advice would be needed in                                                                    
order to lock down the actual components of the idea.                                                                           
                                                                                                                                
9:23:19 AM                                                                                                                    
                                                                                                                                
Representative Thompson expressed  concern that donations to                                                                    
the building fund could have  a negative effect on donations                                                                    
to other University departments.                                                                                                
                                                                                                                                
Mr. Gamble  answered that it  was a possibility.  He relayed                                                                    
that  many  donors  were  specific   with  regard  to  their                                                                    
donations.  He  said  that unspecified  donations  would  be                                                                    
considered for the fund.                                                                                                        
                                                                                                                                
9:26:27 AM                                                                                                                    
                                                                                                                                
Co-Chair Austerman  assumed that  the fund could  handle any                                                                    
component.                                                                                                                      
                                                                                                                                
Mr. Gamble  did not think that  using the fund to  build new                                                                    
buildings  was  part  of  the  plan;  operation  and  rehab,                                                                    
certainly, but the  capital cost of building  a new building                                                                    
would deplete the fund.                                                                                                         
                                                                                                                                
Co-Chair Austerman  thought that lapses in  funding could be                                                                    
problematic.                                                                                                                    
                                                                                                                                
Mr. Gamble  stressed that the  initiation of the  fund would                                                                    
concentrate   on  newer   buildings  that   had  less   cost                                                                    
associated with the maintenance.                                                                                                
                                                                                                                                
Vice-Chair   Neuman   asked    about   appropriations   from                                                                    
endowments.  He noted  that if  they  were not  specifically                                                                    
mentioned  in the  appropriations language  then they  could                                                                    
not  be  accepted.  He thought  that  perhaps  the  language                                                                    
should be added to the bill.                                                                                                    
                                                                                                                                
9:31:07 AM                                                                                                                    
                                                                                                                                
Mr. Gamble said that they  had the ability to track specific                                                                    
buildings, if a large project  came up a few million dollars                                                                    
short those  dollars could  be used  to fund  something else                                                                    
and would be included as candidates  to be put into the fund                                                                    
for broader use.                                                                                                                
                                                                                                                                
Representative  Guttenberg wondered  whether  the result  of                                                                    
Subsection  10  on page  2  would  allow the  University  to                                                                    
reconfigure space  on campus  that could  be leased  out and                                                                    
allow for  maintenance and operation  outside of  the normal                                                                    
University budget.                                                                                                              
                                                                                                                                
Mr. Gamble answered in the affirmative.                                                                                         
                                                                                                                                
9:34:02 AM                                                                                                                    
                                                                                                                                
Representative   Edgmon   asked   for  the   definition   of                                                                    
maintenance  versus   "depreciation  related  to   space  in                                                                    
covered buildings."                                                                                                             
                                                                                                                                
Mr.   Gamble  explained   that   the   notion  of   building                                                                    
depreciation was  central to  the whole  idea of  R&R, every                                                                    
single year a building aged.  He said that the definition of                                                                    
"covered"  meant buildings  that were  specifically occupied                                                                    
for research  or academics. He  said that  the depreciation,                                                                    
opposed  to a  financial  depreciation, was  related to  how                                                                    
quickly  the building  was aging.  When  the buildings  were                                                                    
analyzed and  categorized an assessment  was made as  to how                                                                    
far it had depreciated  from its original construction, this                                                                    
gave an  idea of the net  asset value of the  building which                                                                    
was  then  compared  to  the  R&R  required  to  re-age  the                                                                    
building,  and then  the depreciation  on  the started  over                                                                    
from where it had been re-aged.                                                                                                 
                                                                                                                                
Co-Chair  Stoltze asked  if assurances  could be  given that                                                                    
deferred maintenance or improvements  would not be construed                                                                    
as allowing new construction.                                                                                                   
                                                                                                                                
Mr. Gamble believed that the  integrity of the assessment of                                                                    
deferred  maintenance  was  fundamental to  the  trust  that                                                                    
dollars  were  being used  as  intended.  He said  that  the                                                                    
poster child  for deferred maintenance  was the  power plant                                                                    
at  the University  of Fairbanks,  the entire  structure had                                                                    
aged out  of its useful  service life. He relayed  that most                                                                    
of the deferred maintenance would be smaller issues.                                                                            
                                                                                                                                
9:38:17 AM                                                                                                                    
                                                                                                                                
Representative  Holmes noted  that  the account  was a  sub-                                                                    
account  of  the  general  fund  and  would  not  allow  the                                                                    
University  to use  it as  a checking  account. She  advised                                                                    
that the  legislature maintain control of  appropriating the                                                                    
money from year to year.                                                                                                        
                                                                                                                                
Vice-Chair Neuman assumed  that the fund would  be under the                                                                    
control  of   the  Board  of   Regents  or   the  University                                                                    
president.  He wanted  to ensure  that the  university would                                                                    
have the autonomy to determine  where the funds would go. He                                                                    
did not want  individual legislators to have  the ability to                                                                    
designate what the money would be spent on.                                                                                     
                                                                                                                                
Mr. Gamble replied in the affirmative.                                                                                          
                                                                                                                                
Vice-Chair Neuman  asked whether the legislature  would have                                                                    
the ability to amend their appropriation.                                                                                       
                                                                                                                                
Mr. Gamble did  not believe he would  have the authorization                                                                    
to make the decision.                                                                                                           
                                                                                                                                
9:40:54 AM                                                                                                                    
                                                                                                                                
Representative  Holmes believed  that the  legislature would                                                                    
had the power to amend the appropriation.                                                                                       
                                                                                                                                
Co-Chair Stoltze  noted that there  had been  some questions                                                                    
and suggestions  related to changes  in the  legislation. He                                                                    
relayed  that the  committee would  look at  the issues  and                                                                    
hear the bill at a later date.                                                                                                  
                                                                                                                                
SB  74  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
HOUSE BILL NO. 316                                                                                                            
                                                                                                                                
     "An  Act relating  to  workers'  compensation fees  for                                                                    
     medical  treatment and  services; relating  to workers'                                                                    
     compensation   regulations;   and  providing   for   an                                                                    
     effective date."                                                                                                           
                                                                                                                                
HB 316 was SCHEDULED but not HEARD.                                                                                             
                                                                                                                                
Co-Chair Stoltze discussed housekeeping.                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
9:43:50 AM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 9:43 a.m.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
SB 74 - Back up Documents.pdf HFIN 4/11/2014 8:30:00 AM
SB 74
SB 74 - Dedicated Fund Question Legal Memo.pdf HFIN 4/11/2014 8:30:00 AM
SB 74
SB 74 - Full Text.pdf HFIN 4/11/2014 8:30:00 AM
SB 74
SB 74 - University Response to Questions from 4.4.13.pdf HFIN 4/11/2014 8:30:00 AM
SB 74
SB 74-Sponsor Statement.pdf HFIN 4/11/2014 8:30:00 AM
SB 74
Sectional Analysis for SB 74.pdf HFIN 4/11/2014 8:30:00 AM
SB 74
SB 137 Annual Report 2013.pdf HFIN 4/11/2014 8:30:00 AM
SB 137
SB 137 ASHSC Strategic Plan.pdf HFIN 4/11/2014 8:30:00 AM
SB 137
SB 137 Sponsor Statement.docx HFIN 4/11/2014 8:30:00 AM
SB 137
SB 137 Supp Letter RobertScher.pdf HFIN 4/11/2014 8:30:00 AM
SB 137
SB 137 Written Testimony John Aho.pdf HFIN 4/11/2014 8:30:00 AM
SB 137
SB 137 Leg Audit Report.pdf HFIN 4/11/2014 8:30:00 AM
SB 137
HB 89 CS WORKDRAFT FIN P version.pdf HFIN 4/11/2014 8:30:00 AM
HB 89