Legislature(1997 - 1998)
02/10/1997 01:40 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
FEBRUARY 10, 1997
1:40 P.M.
TAPE HFC 97 - 21, Side 1, #000 - #630.
CALL TO ORDER
Co-Chair Gene Therriault called the House Finance Committee
meeting to order at 1:40 P.M.
PRESENT
Co-Chair Hanley Representative Kelly
Co-Chair Therriault Representative Kohring
Representative Davies Representative Martin
Representative Davis Representative Grussendorf
Representative Foster Representative Mulder
Representative Moses was not present for the meeting.
ALSO PRESENT
Dan Spencer, Budget Analyst, Budget Review, Office of
Management and Budget, Office of the Governor; Ken Bischoff,
Director, Division of Administrative Services, Department of
Public Safety; Keith Kelton, Director, Division of Facility
Construction & Operation, Department of Environmental
Conservation; Garrey Peska, Alaska State Hospital and
Nursing Home Association (ASHNHA), Juneau; Betty Martin,
Comptroller, Treasury Division, Department of Revenue.
SUMMARY
HB 102 An Act abolishing the Alaska Medical Facility
Authority; and providing for an effective date.
HB 102 was HELD in Committee for further
discussion.
HB 103 An Act repealing certain state funds and accounts
and boards, limitations, and programs related to
those funds and accounts; and providing for an
effective date.
HB 103 was HELD in Committee for further
discussion.
HB 104 An Act repealing the search and rescue fund;
relating to expenditures for search and rescue
activities; and providing for an effective date.
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HB 104 was HELD in Committee for further
discussion.
HB 105 An Act relating to the unorganized borough
national forest receipts program; and providing
for an effective date.
HB 105 was reported out of Committee with a "do
pass" recommendation and with a zero fiscal note
by the Department of Community and Regional
Affairs.
HB 106 An Act relating to the municipal assistance
program and the organization grant program; and
providing for an effective date.
HB 106 was reported out of Committee with a "do
pass" recommendation and with a zero fiscal note
by the Department of Community and Regional
Affairs.
HB 107 An Act relating to water quality enhancement and
water supply, wastewater, and solid waste systems
grants; and providing for an effective date.
HB 107 was reported out of Committee with a "do
pass" recommendation and with a zero fiscal note
by the Department of Environmental Conservation.
HB 108 An Act relating to the crime victim compensation
program; and providing for an effective date.
HB 108 was reported out of Committee with a "do
pass" recommendation and with two zero fiscal
notes by the Department of Public Safety.
CO-CHAIR GENE THERRIAULT explained that the packet of bills
before the Committee had been consolidated as a result of
work provided by Representative Martin as Chair of the
Legislative Budget and Audit Committee (LBA).
DAN SPENCER, BUDGET ANALYST, BUDGET REVIEW, OFFICE OF
MANAGEMENT AND BUDGET (OMB), OFFICE OF THE GOVERNOR, advised
that OMB foresaw only one problem with the proposed
legislation, Section #1 of HB 104.
Mr. Spencer added, OMB has spoken with each department
regarding the legislation's impact. Also, the Department of
Administration, Division of Finance has been consulted.
Representative John Davies commented that he had written a
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letter to each departmental commissioner regarding the
legislative impacts. He indicated that a number of affected
divisions had not been consulted. HB 104 had not been
included on the original list and he requested that it be
held in Committee until response was received from that
Department. Co-Chair Therriault noted that it was his
intent to report the bills out of Committee, although, if
the Committee needed additional time to consider some of the
legislation, action could be postponed until the following
meeting. #HB104
HOUSE BILL 104
"An Act repealing the search and rescue fund; relating
to expenditures for search and rescue activities; and
providing for an effective date."
Co-Chair Therriault stated that search and rescue activities
are appropriated directly from the General Fund and not
through the Search and Rescue Fund. That fund has remained
empty and inactive. The legislation would remove the fund
from statutes, as well as reference to the fund.
KEN BISCHOFF, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF PUBLIC SAFETY, encouraged the deletion of
Section #1, which would make the legislation apply to all
funding sources. In the Search and Rescue BRU component,
there remains $280 thousand General Fund dollars, which
would be subject to the limit imposed through the
legislation. Many search and rescues exceed $2500 dollars.
The Department's manual has established that individual
personal in the field are authorized to spend up to $2500
dollars and then would be responsible to contact the person
next in command to make additional spending decisions.
Seldom do approvals go through to the Commissioner. Mr.
Bischoff reiterated that the Department would prefer not to
have the Commissioner in the loop of approval.
Co-Chair Therriault asked if the Department was operating
"around" the Search and Rescue Fund in order to avoid a
limitation being imposed. Mr. Bischoff explained that the
way a limitation was constructed, it would have applied to
appropriations from the Search and Rescue Funds. The
Department did not apply the limitation to straight general
fund appropriations that were outside the realm of the fund.
That action would be controlled through Department policy.
The Department requests that all the language in Section #1
be deleted.
Representative J. Davies MOVED to insert language on Page 1,
Line 11, Section #2, "and AS 18.60.140". That language
would delete Section #1. There being NO OBJECTION, it was
adopted.
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Co-Chair Therriault noted that if Section AS 18.60.140 and
145 were combined, HB 104 could be rolled over into HB 103.
He recommended that Legal Services be consulted on that
matter.
Representative Grussendorf pointed out that the intent of
the original language, allowed contributions and donations
to the fund. Mr. Bischoff responded that a contribution
would be distributed to a legislative revised program
through action of the Legislative Budget and Audit
Committee.
Representative J. Davies requested the bill be held for
additional clarification.
HB 104 was HELD in Committee for further discussion.
HOUSE BILL 108
"An Act relating to the crime victim compensation
program; and providing for an effective date."
Co-Chair Therriault stated that the Crime Victim
Compensation Program had not received allocations from the
fund established by statute. The inactive account was
cleared by changing reference from "fund" to "program".
Representative J. Davies added that both the Department and
Division which the proposed legislation would affect agreed
that passage of the legislation would not adversely affect
them.
Mr. Bischoff interjected that the Department was supportive
of passage of HB 108.
Representative Mulder MOVED to report HB 108 out of
Committee with individual recommendations and with the
accompanying fiscal note.
HB 108 was reported out of Committee with a "do pass"
recommendation and with two zero fiscal notes by the
Department of Public Safety.
HOUSE BILL 107
"An Act relating to water quality enhancement and water
supply, wastewater, and solid waste systems grants; and
providing for an effective date."
Co-Chair Therriault explained that the proposed legislation
would remove from statutes the Water Quality Enhancement and
Water Supply, Wastewater, and Solid Waste Systems Fund. The
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fund is empty and has not been used to make appropriations
to the program.
KEITH KELTON, DIRECTOR, DIVISION OF FACILITY CONSTRUCTION &
OPERATION, DEPARTMENT OF ENVIRONMENTAL CONSERVATION, noted
that the Department would not object to passage of the
proposed legislation. The Department initially thought
there could be a conflict in receiving federal authority to
establish an Alaska Safe Water Drinking Fund. Upon further
investigation, there would be no conflict to create that
fund with passage of this legislation.
Representative J. Davies asked how the fund would be
established. Mr. Kelton replied, another statute created
two years ago, AS 46.03.036, specifically authorizes the
Department to administer that program.
Representative Mulder MOVED to report HB 107 out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
HB 107 was reported out of Committee with a "do pass"
recommendation and with a zero fiscal note by the Department
of Environmental Conservation (DEC).
HOUSE BILL 105
"An Act relating to the unorganized borough national
forest receipts program; and providing for an effective
date."
Co-Chair Therriault stated that there is no anticipated use
for the Unorganized Borough National Forest Receipts Fund.
Federal appropriations for the program go directly into the
General Fund, leaving the special account inactive and
empty. Passage of this legislation would clear the unused
account from Statutes, by changing the reference from "fund"
to "program".
Mr. Spencer advised that the Department of Community and
Regional Affairs (DCRA) was in support of HB 105.
Representative Martin MOVED to report HB 105 out of
Committee with individual recommendations and with the
accompanying fiscal note.
HB 105 was reported out of Committee with a "do pass"
recommendation and with a zero fiscal noted by the
Department of Community and Regional Affairs.
HOUSE BILL 106
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"An Act relating to the municipal assistance program
and the organization grant program; and providing for
an effective date."
Co-Chair Therriault noted that although these programs
remain operative, the Municipal Assistance and Organization
Grant Funds are inactive and empty. Legislation would clear
the "fund"(s) from statutes, and refer only to the
"program"(s).
Mr. Spencer noted that the Department of Community and
Regional Affairs (DCRA) was in support of passage of HB 106.
Representative Martin MOVED to report HB 106 out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
HB 106 was reported out of Committee with a "do pass"
recommendation and with a zero fiscal note by the Department
of Community and Regional Affairs.
HOUSE BILL 103
"An Act repealing certain state funds and accounts and
boards, limitations, and programs related to those
funds and accounts; and providing for an effective
date."
Mr. Spencer acknowledged that the proposed committee
substitute (CS) had addressed the concerns of the
Administration.
Co-Chair Hanley MOVED that the work draft, CS HB 103 (FIN),
Committee. There being NO OBJECTION, it was adopted.
Co-Chair Therriault noted that the Administration's concern
was to language on Page #5, Line #5, repealing AS 47.37.045.
The Department recommended deleting the fund and leaving
grant authority in the bill. The remaining section
addresses grants to the juvenile justice package.
Representative J. Davies requested that the legislation be
held in order to determine the impact of rolling HB 104 into
it.
CS HB 103 (FIN) was HELD in Committee for further
discussion.
HOUSE BILL 102
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"An Act abolishing the Alaska Medical Facility
Authority; and providing for an effective date."
Co-Chair Therriault noted that the legislation would follow
up with last year's SB 136, which transferred the balance
remaining in the Alaska Medical Facilities Authority Fund to
the General Fund, thus, closing out all accounts pertaining
to the Authority. By repealing AS 18.26, the obsolete
Alaska Medical Facility Authority would be cleared from the
Statutes.
Mr. Spencer stated that the Department of Revenue (DOR) did
not oppose the proposed legislation.
GARREY PESKA, ALASKA STATE HOSPITAL AND NURSING HOME
ASSOCIATION (ASHNHA), JUNEAU, noted that ASHNHA members
request that HB 102 not be passed from Committee and that
the Alaska Medical Facilities Authority not be abolished.
The Authority was established in 1978 for the purpose of
selling tax exempt revenue bonds with the proceeds being
used for medical facility construction and improvements.
Mr. Peska stated that in the past, the Authority had
provided financing for two projects through bond sales. One
was for the purchase of Careage North and the other was for
remodeling Fairbanks Memorial Hospital; since then, there
has been no activity in the Authority. Leaving the
Authority on the "books" would provide a mechanism for
selling tax exempt revenue bonds to finance medical facility
construction and improvements in the future. Some
facilities are municipally owned and they can sell revenue
bonds through the municipalities and the State Municipal
Bond Bank. Other non profit facilities that are not
municipally owned could use this Authority for that purpose.
He emphasized, there is no compelling reason to abolish the
Authority.
He continued, the Department of Revenue has stated that if
bonds are sold by the Authority, they are not general or
moral obligations of the State. They are secured by lease
payments on medical facilities mortgaged to the Authority
which would not impact the State's bond rating.
Representative Mulder asked what communities might take
advantage of the services offered. Mr. Peska replied that
one good example would be St. Ann's Care Center in Juneau, a
private, non profit care center, not affiliated with the
municipality. The Authority would be the only mechanism
available to sell tax exempt bonds to keep their costs down.
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Co-Chair Therriault suggested that the municipality could
loan out their bonding authority. Mr. Peska stated that
would not be possible for any private, non profit medical
facility. Co-Chair Therriault asked if there would be costs
associated to the State for the Authority.
BETTY MARTIN, COMPTROLLER, TREASURY DIVISION, DEPARTMENT OF
REVENUE, advised that there would be no costs incurred until
there was money in the fund. A one percent (1%) charge of
the outstanding bonds would be collected each year for the
medical facility.
Co-Chair Therriault acknowledged that unless Committee
members were compelled to move the legislation, he did not
think it was essential to move HB 102 forward with the
remaining legislation, given the possibility that the
medical community could need that privilege in the future.
Co-Chair Hanley requested that research be provided to
determine if other avenues exist for the tax exempt
financing.
HB 102 was HELD in Committee for further discussion.
Co-Chair Therriault distributed a work draft handout, #0-
LS042\E, Chenoweth, 2/03/97, and memo from the University of
Alaska with the suggested language on the management of UA
Endowment Trust Funds. [Copy on file].
ADJOURNMENT
The meeting adjourned at 2:20 P.M.
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