Legislature(1995 - 1996)
05/01/1995 01:50 PM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
MAY 1, 1995
1:50 P.M.
TAPE HFC 95 - 108, Side 1, #000 - end.
TAPE HFC 95 - 108, Side 2, #000 - #290.
CALL TO ORDER
Co-Chair Richard Foster called the House Finance Committee
meeting to order at 1:50 P.M.
PRESENT
Co-Chair Hanley Representative Kohring
Co-Chair Foster Representative Martin
Representative Mulder Representative Navarre
Representative Brown Representative Parnell
Representative Grussendorf Representative Therriault
Representative Kelly
ALSO PRESENT
John Bitney, Staff, Representative Terry Martin; Terry
Otness, Staff, Senator Robin Taylor; Tom Williams, Staff,
Senator Steve Frank; Dan Fauske, Corporate Executive
Officer, Alaska Housing Finance Corporation, Department of
Revenue; William Howe, Deputy Commissioner, Treasury
Division, Department of Revenue.
SUMMARY
SB 1 An Act relating to state implementation of federal
statutes.
HCS CS SB 1 (FIN) was reported out of Committee
with a "do pass" recommendation and with a fiscal
note by the Department of Law and a zero fiscal
note by the Senate Finance Committee dated 3/2/95.
SB 92 An Act requiring that, in addition to its
operating budget, all activities of the Alaska
Housing Finance Corporation are subject to the
Executive Budget Act.
HCS CS SB 92 (FIN) was reported out of Committee
with "no recommendation" and with a zero fiscal
note by the Department of Revenue dated 3/1/95.
SENATE BILL 92
1
"An Act requiring that, in addition to its operating
budget, all activities of the Alaska Housing Finance
Corporation are subject to the Executive Budget Act."
Representative Martin MOVED to adopt work draft #9-LS0762\M,
Chenoweth, 5/1/95, as the version before the Committee.
There being NO OBJECTIONS, it was so ordered.
JOHN BITNEY, STAFF, REPRESENTATIVE TERRY MARTIN, explained
that the work draft addressed language as recommended by the
Subcommittee. The language will spell out the new items
provided in the Executive Budget Act for the Alaska Housing
Finance Corporation (AHFC). That information was included
in the new subsection (D). He added that an amendment had
been prepared to address the exemptions referenced in
Section (F). [Attachment #1].
Representative Martin MOVED to adopt Amendment #1.
Representative Therriault OBJECTED for purposes of
discussion.
DAN FAUSKE, CORPORATE EXECUTIVE OFFICER (CEO), ALASKA
HOUSING FINANCE CORPORATION, DEPARTMENT OF REVENUE,
commented that the refinancing concern would be remedied
through the amendment. That language would allow for
service of the mortgage loans and foreclosures while
providing the flexibility needed to remain in the market,
capitalize on savings and allow the corporations to be in a
position to react quickly in the bond market.
Representative Parnell questioned the scope of Section 2(A)
contained within the amendment. Mr. Fauske explained that
within the budget two numbers would be provided; one in the
front end (D) and the other in (F). Mr. Bitney responded
that the 5% loan program was financed with the use of
arbitrage earnings. He referenced the adopted committee
substitute, Line 10 (C), indicating the exempted portion.
Representative Brown asked how the proposed committee
substitute had changed from the State Affairs version. Mr.
Bitney replied that there had not been any substantive
changes. He continued, under the House State Affairs
version, the two loan programs were exempt from the review
procedures. Current language dictates that the Legislature
would provide an aggregate appropriation number for the loan
permits. He added that there are new exemptions listed in
Amendment #1.
Representative Brown asked how the multi-family loan portion
of the bill would be addressed. Mr. Bitney said that had
been referenced in Subsection (E), Page 2, Line 3. The
2
appropriation would be divided into two parts; an aggregate
appropriation for the loan programs in which a subsidy was
not provided and also (E) would provide an appropriation for
all the "other" loan programs including multi-family.
Representative Martin understood that language would allow
the bill to be more "open".
Representative Brown questioned why portions of the bill had
been deleted. Mr. Fauske pointed out that he prefered the
last bill, although through the course of negotiation, it
became apparent that the language addressing AHFC would need
to become more "stringent". He summarized that a position
had been accomplished within the proposed legislation which
would not bind the corporation upward and which would permit
it to continue to function.
Representative Brown asked if opportunities would be lost.
Mr. Fauske felt that there would continue to be enough lead
time in order for the Legislative Budget and Audit Committee
(LBA) to explain the case when the amount of money
stipulated in the front section might not be sufficient.
The propsed legislation needs additional work, although it
would be "doable". Mr. Fauske anticipated that this year's
loan activity would be $350-$400 million dollars. He
understood that the Legislature would appropriate that
amount each year for loan programs.
Representative Brown asked if AHFC's corporate dollars would
be incorporated as well as the funds bonded for. Mr. Fauske
noted that was correct. He added that based on the
companies appropriated estimates, that dollar amount will be
in the front end of the budget. Representative Brown
disagreed with that concept. Mr. Fauske understood the
concern. Representative Martin explained that the
Legislature has complete authority over appropriations as
stipulated in Article 9.
WILLIAM HOWE, DEPUTY COMMISSIONER, TREASURY DIVISION,
DEPARTMENT OF REVENUE, responded to Representative Brown's
concern. He noted that the intent of the language would be
that the Legislature will review all of the loan programs
that AHFC carries as part of their oversight process. With
the multi-family housing loan and special-needs housing
projects and programs will be reviewed through the
Legislature. Both last year and this year, those programs
consume approximately $50 million dollars of AHFC money,
raised through new bond issues. The Legislature will have
the right to review those programs. The amendment clarifies
that once the scope of the total activities is determined,
AHFC can operate freely within those boundaries. He
stressed that the Legislature will not get involved in
funding individual projects.
3
Representative Brown asked the distinction between (a)1(D)
and 2(A). Mr. Howe stated that 2(A) would provide the
ability to float bonds and borrow money for bond issues. He
continued, Section 1(D) only deals with the lending of
money. Representative Brown voiced confusion about the
source of the money; she thought that they both represented
the same funds. Mr. Howe explained that Section 1(D), the
lending of money, the authorization is only related to an
aggregate amount and provides the Legislature the ability to
review programs. If the programs are supported by the
Legislature, then the aggregate amount for all those
programs will be given to AHFC to function. How they fund
those loans will be a function of corporate receipts
acquired from past loan payments, interest earnings as well
as floating bonds.
TOM WILLIAMS, STAFF, SENATOR STEVE FRANK, commented that
Senator Frank requested that the bill return to the original
Senate version or some modified version of that.
Representative Martin noted that the committee substitute
would represent the "middle ground" on the legislation.
Representative Therriault WITHDREW THE OBJECTION to adopting
Amendment #1. Representative Brown pointed out that the
amendment would need a semi colon following the language
"obligation" in Section (A). Representative Parnell noted
that Section (B) would need an apostrophe in "corporations".
There being NO further OBJECTIONS, Amendment #1 was adopted.
Representative Martin MOVED to report HCS CS SB 92 (FIN) out
of Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
HCS CS SB 92 (FIN) was reported out of Committee with "no
recommendation" and with a zero fiscal note by the
Department of Revenue dated 3/1/95.
SENATE BILL 1
"An Act relating to state implementation of federal
statutes."
TERRY OTNESS, STAFF, SENATOR ROBIN TAYLOR, testified in
support of SB 1. He stated that SB 1 was introduced as a
companion measure to SJR 7, the Tenth Amendment resolution
which has already passed the Legislature and been
transmitted to the Governor. The resolution demands that
Congress stop the practice of passing federal mandates which
exceed Congressional authority under the Tenth Amendment.
He added that SB 1 would be an attempt to identify federal
4
mandates, both statutory and regulatory, which conflict with
State policy or exceed Constitutional limitations.
Mr. Otness commented in order to accomplish that goal, SB 1
would require an annual review by the executive branch of
each program mandated by Congress. An annual report to the
Governor and the Legislative Budget and Audit Committee
would set forth conclusions and would then make
recommendations for changes in federal law to make the
program consistent with state policy.
Representative Brown spoke to Amendment #1. [Attachment
a thorough review every four years rather than every year.
Section (B) would stipulate that when there is a new federal
law or requirement imposed, a review of "only" that material
would be required.
Representative Martin recommended dividing Amendment #1.
Representative Brown explained that she had requested Legal
Services to draft the amendment in order that a review would
be provided every four years and when there was something
new added, it would be reviewed. She understood that the
amendment would cover that request. Representative Mulder
agreed that the comprehensive review for the first year made
sense, although questioned the timeliness to each new
mandate. He felt anytime there were new changes, it would
not be too cumbersome for each department to provide a
review of those changes. Representative Brown agreed with
Representative Mulder.
(Tape Change, HFC 95-108, Side 2).
Representative Parnell recommended adopting the amendment.
Representative Martin stated that he would rather divide the
question. He felt that four years would be too long and
that annually would be too often. Representative Brown
noted that on Page 2, Line 23, there was a "time certain"
for the annual review. The reason that the date was added
in the amendment, was to clarify which year it was to be
submitted. Representative Martin reiterated that four years
would be too long to wait for the information.
Representative Brown MOVED to adopt Amendment #1.
Representative Martin MOVED TO DIVIDE Amendment #1. There
being NO OBJECTION, it was divided.
Representative Brown MOVED to adopt 1(A). Representative
Martin OBJECTED. He recommended that the time be changed to
three years. Representative Navarre remarked that the
report was being given too much attention and focus. He
stressed that administrative ability was being reduced as
5
was the department's ability to manage. He advised that
with the proposed legislation, additional costs will be
placed on those departments.
A roll call was taken on the MOTION to adopt Section 1(A).
IN FAVOR: Therriault, Brown, Martin, Mulder,
Navarre, Parnell
OPPOSED: Kohring
Representatives Hanley, Kelly, Hanley, Foster were not
present for the vote.
The MOTION PASSED (6-1).
Representative Mulder MOVED to adopt 1(B), Amendment #1.
There being NO OBJECTION, it was adopted.
Representative Parnell MOVED an amendment change to Page 3,
Line 15, adding the language "and the Legislature" following
the word "Governor". There being NO OBJECTION, it was
adopted.
Representative Parnell MOVED to report HCS CS SB 1 (FIN) out
of Committee with individual recommendations and with the
accompanying Senate Finance Committee fiscal note.
Representative Brown pointed out that the Senate Finance
Committee had zeroed out all the fiscal notes. She
recommended that the Committee consider passing a fiscal
note for the Department of Law. She stressed that their
role will become more difficult with passage of the
legislation and that they will need to support all of the
departments. She stressed that the Department of Law will
have specific duties. She reminded members of the large
operating budget reduction made to the civil division within
that Department.
Representative Parnell also MOVED to adopt the Department of
Law fiscal note. There being NO OBJECTION, the SFC and the
Department of Law fiscal notes were adopted as well as
reporting the bill from Committee.
Representative Navarre commented that the Department of
Health and Social Services will have fiscal impact also,
although he opted not move the fiscal note.
HCS CS SB 1 (FIN) was reported out of Committee with a "do
pass" recommendation and with fiscal notes by the Department
of Law and the Senate Finance Committee dated 3/2/95.
ADJOURNMENT
6
The meeting adjourned at 2:45 P.M.
HOUSE FINANCE COMMITTEE
MAY 1, 1995
1:50 P.M.
TAPE HFC 95 - 108, Side 1, #000 - end.
TAPE HFC 95 - 108, Side 2, #000 - #290.
CALL TO ORDER
Co-Chair Richard Foster called the House Finance Committee
meeting to order at 1:50 P.M.
PRESENT
Co-Chair Hanley Representative Kohring
Co-Chair Foster Representative Martin
Representative Mulder Representative Navarre
Representative Brown Representative Parnell
Representative Grussendorf Representative Therriault
Representative Kelly
ALSO PRESENT
John Bitney, Staff, Representative Terry Martin; Terry
Otness, Staff, Senator Robin Taylor; Tom Williams, Staff,
Senator Steve Frank; Dan Fauske, Corporate Executive
Officer, Alaska Housing Finance Corporation, Department of
Revenue; William Howe, Deputy Commissioner, Treasury
Division, Department of Revenue.
SUMMARY
SB 1 An Act relating to state implementation of federal
statutes.
HCS CS SB 1 (FIN) was reported out of Committee
with a "do pass" recommendation and with a fiscal
note by the Department of Law and a zero fiscal
note by the Senate Finance Committee dated 3/2/95.
SB 92 An Act requiring that, in addition to its
operating budget, all activities of the Alaska
Housing Finance Corporation are subject to the
Executive Budget Act.
HCS CS SB 92 (FIN) was reported out of Committee
with "no recommendation" and with a zero fiscal
note by the Department of Revenue dated 3/1/95.
7
SENATE BILL 92
"An Act requiring that, in addition to its operating
budget, all activities of the Alaska Housing Finance
Corporation are subject to the Executive Budget Act."
Representative Martin MOVED to adopt work draft #9-LS0762\M,
Chenoweth, 5/1/95, as the version before the Committee.
There being NO OBJECTIONS, it was so ordered.
JOHN BITNEY, STAFF, REPRESENTATIVE TERRY MARTIN, explained
that the work draft addressed language as recommended by the
Subcommittee. The language will spell out the new items
provided in the Executive Budget Act for the Alaska Housing
Finance Corporation (AHFC). That information was included
in the new subsection (D). He added that an amendment had
been prepared to address the exemptions referenced in
Section (F). [Attachment #1].
Representative Martin MOVED to adopt Amendment #1.
Representative Therriault OBJECTED for purposes of
discussion.
DAN FAUSKE, CORPORATE EXECUTIVE OFFICER (CEO), ALASKA
HOUSING FINANCE CORPORATION, DEPARTMENT OF REVENUE,
commented that the refinancing concern would be remedied
through the amendment. That language would allow for
service of the mortgage loans and foreclosures while
providing the flexibility needed to remain in the market,
capitalize on savings and allow the corporations to be in a
position to react quickly in the bond market.
Representative Parnell questioned the scope of Section 2(A)
contained within the amendment. Mr. Fauske explained that
within the budget two numbers would be provided; one in the
front end (D) and the other in (F). Mr. Bitney responded
that the 5% loan program was financed with the use of
arbitrage earnings. He referenced the adopted committee
substitute, Line 10 (C), indicating the exempted portion.
Representative Brown asked how the proposed committee
substitute had changed from the State Affairs version. Mr.
Bitney replied that there had not been any substantive
changes. He continued, under the House State Affairs
version, the two loan programs were exempt from the review
procedures. Current language dictates that the Legislature
would provide an aggregate appropriation number for the loan
permits. He added that there are new exemptions listed in
Amendment #1.
Representative Brown asked how the multi-family loan portion
of the bill would be addressed. Mr. Bitney said that had
8
been referenced in Subsection (E), Page 2, Line 3. The
appropriation would be divided into two parts; an aggregate
appropriation for the loan programs in which a subsidy was
not provided and also (E) would provide an appropriation for
all the "other" loan programs including multi-family.
Representative Martin understood that language would allow
the bill to be more "open".
Representative Brown questioned why portions of the bill had
been deleted. Mr. Fauske pointed out that he prefered the
last bill, although through the course of negotiation, it
became apparent that the language addressing AHFC would need
to become more "stringent". He summarized that a position
had been accomplished within the proposed legislation which
would not bind the corporation upward and which would permit
it to continue to function.
Representative Brown asked if opportunities would be lost.
Mr. Fauske felt that there would continue to be enough lead
time in order for the Legislative Budget and Audit Committee
(LBA) to explain the case when the amount of money
stipulated in the front section might not be sufficient.
The propsed legislation needs additional work, although it
would be "doable". Mr. Fauske anticipated that this year's
loan activity would be $350-$400 million dollars. He
understood that the Legislature would appropriate that
amount each year for loan programs.
Representative Brown asked if AHFC's corporate dollars would
be incorporated as well as the funds bonded for. Mr. Fauske
noted that was correct. He added that based on the
companies appropriated estimates, that dollar amount will be
in the front end of the budget. Representative Brown
disagreed with that concept. Mr. Fauske understood the
concern. Representative Martin explained that the
Legislature has complete authority over appropriations as
stipulated in Article 9.
WILLIAM HOWE, DEPUTY COMMISSIONER, TREASURY DIVISION,
DEPARTMENT OF REVENUE, responded to Representative Brown's
concern. He noted that the intent of the language would be
that the Legislature will review all of the loan programs
that AHFC carries as part of their oversight process. With
the multi-family housing loan and special-needs housing
projects and programs will be reviewed through the
Legislature. Both last year and this year, those programs
consume approximately $50 million dollars of AHFC money,
raised through new bond issues. The Legislature will have
the right to review those programs. The amendment clarifies
that once the scope of the total activities is determined,
AHFC can operate freely within those boundaries. He
stressed that the Legislature will not get involved in
9
funding individual projects.
Representative Brown asked the distinction between (a)1(D)
and 2(A). Mr. Howe stated that 2(A) would provide the
ability to float bonds and borrow money for bond issues. He
continued, Section 1(D) only deals with the lending of
money. Representative Brown voiced confusion about the
source of the money; she thought that they both represented
the same funds. Mr. Howe explained that Section 1(D), the
lending of money, the authorization is only related to an
aggregate amount and provides the Legislature the ability to
review programs. If the programs are supported by the
Legislature, then the aggregate amount for all those
programs will be given to AHFC to function. How they fund
those loans will be a function of corporate receipts
acquired from past loan payments, interest earnings as well
as floating bonds.
TOM WILLIAMS, STAFF, SENATOR STEVE FRANK, commented that
Senator Frank requested that the bill return to the original
Senate version or some modified version of that.
Representative Martin noted that the committee substitute
would represent the "middle ground" on the legislation.
Representative Therriault WITHDREW THE OBJECTION to adopting
Amendment #1. Representative Brown pointed out that the
amendment would need a semi colon following the language
"obligation" in Section (A). Representative Parnell noted
that Section (B) would need an apostrophe in "corporations".
There being NO further OBJECTIONS, Amendment #1 was adopted.
Representative Martin MOVED to report HCS CS SB 92 (FIN) out
of Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
HCS CS SB 92 (FIN) was reported out of Committee with "no
recommendation" and with a zero fiscal note by the
Department of Revenue dated 3/1/95.
SENATE BILL 1
"An Act relating to state implementation of federal
statutes."
TERRY OTNESS, STAFF, SENATOR ROBIN TAYLOR, testified in
support of SB 1. He stated that SB 1 was introduced as a
companion measure to SJR 7, the Tenth Amendment resolution
which has already passed the Legislature and been
transmitted to the Governor. The resolution demands that
Congress stop the practice of passing federal mandates which
exceed Congressional authority under the Tenth Amendment.
10
He added that SB 1 would be an attempt to identify federal
mandates, both statutory and regulatory, which conflict with
State policy or exceed Constitutional limitations.
Mr. Otness commented in order to accomplish that goal, SB 1
would require an annual review by the executive branch of
each program mandated by Congress. An annual report to the
Governor and the Legislative Budget and Audit Committee
would set forth conclusions and would then make
recommendations for changes in federal law to make the
program consistent with state policy.
Representative Brown spoke to Amendment #1. [Attachment
a thorough review every four years rather than every year.
Section (B) would stipulate that when there is a new federal
law or requirement imposed, a review of "only" that material
would be required.
Representative Martin recommended dividing Amendment #1.
Representative Brown explained that she had requested Legal
Services to draft the amendment in order that a review would
be provided every four years and when there was something
new added, it would be reviewed. She understood that the
amendment would cover that request. Representative Mulder
agreed that the comprehensive review for the first year made
sense, although questioned the timeliness to each new
mandate. He felt anytime there were new changes, it would
not be too cumbersome for each department to provide a
review of those changes. Representative Brown agreed with
Representative Mulder.
(Tape Change, HFC 95-108, Side 2).
Representative Parnell recommended adopting the amendment.
Representative Martin stated that he would rather divide the
question. He felt that four years would be too long and
that annually would be too often. Representative Brown
noted that on Page 2, Line 23, there was a "time certain"
for the annual review. The reason that the date was added
in the amendment, was to clarify which year it was to be
submitted. Representative Martin reiterated that four years
would be too long to wait for the information.
Representative Brown MOVED to adopt Amendment #1.
Representative Martin MOVED TO DIVIDE Amendment #1. There
being NO OBJECTION, it was divided.
Representative Brown MOVED to adopt 1(A). Representative
Martin OBJECTED. He recommended that the time be changed to
three years. Representative Navarre remarked that the
report was being given too much attention and focus. He
11
stressed that administrative ability was being reduced as
was the department's ability to manage. He advised that
with the proposed legislation, additional costs will be
placed on those departments.
A roll call was taken on the MOTION to adopt Section 1(A).
IN FAVOR: Therriault, Brown, Martin, Mulder,
Navarre, Parnell
OPPOSED: Kohring
Representatives Hanley, Kelly, Hanley, Foster were not
present for the vote.
The MOTION PASSED (6-1).
Representative Mulder MOVED to adopt 1(B), Amendment #1.
There being NO OBJECTION, it was adopted.
Representative Parnell MOVED an amendment change to Page 3,
Line 15, adding the language "and the Legislature" following
the word "Governor". There being NO OBJECTION, it was
adopted.
Representative Parnell MOVED to report HCS CS SB 1 (FIN) out
of Committee with individual recommendations and with the
accompanying Senate Finance Committee fiscal note.
Representative Brown pointed out that the Senate Finance
Committee had zeroed out all the fiscal notes. She
recommended that the Committee consider passing a fiscal
note for the Department of Law. She stressed that their
role will become more difficult with passage of the
legislation and that they will need to support all of the
departments. She stressed that the Department of Law will
have specific duties. She reminded members of the large
operating budget reduction made to the civil division within
that Department.
Representative Parnell also MOVED to adopt the Department of
Law fiscal note. There being NO OBJECTION, the SFC and the
Department of Law fiscal notes were adopted as well as
reporting the bill from Committee.
Representative Navarre commented that the Department of
Health and Social Services will have fiscal impact also,
although he opted not move the fiscal note.
HCS CS SB 1 (FIN) was reported out of Committee with a "do
pass" recommendation and with fiscal notes by the Department
of Law and the Senate Finance Committee dated 3/2/95.
ADJOURNMENT
12
The meeting adjourned at 2:45 P.M.
13
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