Legislature(2015 - 2016)HOUSE FINANCE 519
04/18/2015 08:30 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB46 | |
| HB44 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 46 | TELECONFERENCED | |
| + | HB 44 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
April 18, 2015
9:04 a.m.
9:04:02 AM
CALL TO ORDER
Co-Chair Thompson called the House Finance Committee
meeting to order at 9:04 a.m.
MEMBERS PRESENT
Representative Mark Neuman, Co-Chair
Representative Steve Thompson, Co-Chair
Representative Dan Saddler, Vice-Chair
Representative Bryce Edgmon
Representative Les Gara
Representative Lynn Gattis
Representative David Guttenberg
Representative Scott Kawasaki
Representative Cathy Munoz
Representative Lance Pruitt
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Tim Grussendorf, Staff, Senator Lyman Hoffman; Deven
Mitchell, Executive Director, Alaska Municipal Bond Bank
Authority, Department of Revenue; Jane Pierson, Staff,
Representative Steve Thompson; Representative Charisse
Millett, Sponsor; Michael Hanley, Commissioner, Department
of Education and Early Development; Grace Abbott, Staff,
Representative Charisse Millett; Representative Geran Tarr.
PRESENT VIA TELECONFERENCE
Cindy Moore, Self, Anchorage; Butch Moore, Self, Anchorage.
SUMMARY
HB 44 SEXUAL ABUSE/ASSAULT PREVENTION PROGRAMS
There being NO further OBJECTION, CSHB 44(FIN)
was REPORTED out of committee with a "do pass"
recommendation and with one new zero fiscal note
from the Department of Education and Early
Development.
SB 46 MUNI BOND BK;REG HEALTH ORGS;JT ACT AGNCY
CSSB 46(FIN) was REPORTED out of committee with a
"do pass" recommendation and with one previously
published indeterminate fiscal note: FN1 (DHS);
and one previously published fiscal impact note:
FN2 (DHS).
CS FOR SENATE BILL NO. 46(FIN)
"An Act relating to the Alaska Municipal Bond Bank
Authority; authorizing the Alaska Municipal Bond Bank
Authority to issue bonds or notes for a regional
health organization or joint action agency; and
providing for an effective date."
9:04:57 AM
TIM GRUSSENDORF, STAFF, SENATOR LYMAN HOFFMAN, noted that
the bill had been previously before the committee on March
26, 2015. He spoke to the changes in the bill that were
made by the senate, and shared that they were identical to
changes made in HB 101. He walked through the explanation
of changes:
The CS for Senate Bill 46(FIN) makes the following
changes form the Senate Bill 46:
Bill Language Changes
1. The CS lowers the total amount form $250 million to
$205 million that the bond bank can finance for
Regional Health organization.
2. The CS only allows for the bond bank to finance no
more than 49 percent of any one project in the state.
3. The CS states that the 49 percent bond bank
financing is contingent on the balance (51 percent) of
the total project cost being secured/delivered prior
to bonding.
4. The CS states that no single Regional Health
Organization borrower can be access more than 50
percent of the $205,000,000 bonding authority.
5. The CS allows for Joint Action Agencies to utilize
the bond bank.
Co-Chair Thompson noted that Representative Gara had joined
the meeting.
Representative Wilson could not find language pertaining to
the 50 percent bonding authority on page 6.
Mr. Grussendorf replied that $102.5 million was 50 percent
of the $205,000,000 bonding authority.
Representative Wilson assumed that the fund would never
exceed $205 million.
Mr. Grussendorf concurred with the assumption.
Co-Chair Thompson noted that Representative Kawasaki had
joined the meeting.
Vice-Chair Saddler asked whether the $102.5 million was per
project, or for all Regional Health Corporations.
DEVEN MITCHELL, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL BOND
BANK AUTHORITY, DEPARTMENT OF REVENUE, replied that the
$102.5 million would be the limit per project.
9:09:15 AM
Co-Chair Thompson queried the definition of a "joint action
agency" as it was written in the legislation.
Mr. Mitchell replied that joint action agencies were
entities created by state law that required utilities to
come together and form an agency in instances where
facilities were being acquired from the state
Vice-Chair Saddler noted that the bonds bank had recently
expanded to cover the University. He wondered which entity
the bank would expand to next.
Mr. Mitchell thought that the university had synergy with
the bond bank that had worked well, the Regional Health
Organizations had similar synergy of goals. He said that a
future synergy between the state and a capital need could
result in another expansion. He asserted that there were no
plans for future expansion on the horizon.
9:11:04 AM
Vice-Chair Saddler asked how Mr. Mitchell would respond to
a legislative request to extend the bond bank to tribal
organizations.
Mr. Mitchell replied that is was hard to project what an
extension would entail. He said that tribal organizations
had issues specific to tribal finance. He understood that
there could be challenges associated with dealing with
sovereign entities.
Vice-Chair Saddler asked whether there were limits to bond
authority expansion.
Mr. Mitchell replied that there would be limits on what
could bonded for on a tax exempt basis.
Vice-Chair Saddler asked how the department evaluated,
balanced, compared, and prioritized bonding requests.
Mr. Mitchell answered that the willingness of the bond bank
to consider partnering with regional health organizations
had developed during collaborative talks between the Board
of Directors of the bond bank and the department. He
believed that the partnership would benefit the quality of
care in rural part of the state and ensure that services
were delivered in a financially minimized fashion.
Vice-Chair Saddler asked again how the bond bank
prioritized the bonding capacity for different users.
Mr. Mitchell replied that the financing requests that would
come before the bond bank were prioritized in statute and
in department regulation. He offered to provide further
information.
Co-Chair Thompson noted that Representative Munoz and
Representative Pruitt had joined the meeting.
9:13:55 AM
Representative Edgmon spoke in strong support of the
project. He categorized the project as an innovative and a
responsible financing mechanism. He spoke to the stellar
credit rating of the bond bank. He requested clarification
on Page 6 of the document, and pointed out that the bill
would transfer more risk to the investor, or builder of the
project, and contained additional sideboards.
Mr. Mitchell answered that the bill protected the state's
participation in the proposed financings by requiring
partners in the financing. He explained that the state
would be financing a minority interest of the total funding
and the partner would be expected to provide an additional
51 percent of the project costs. He noted that the
structure would prove to create greater financial security
for the state.
Representative Edgmon observed that the project had been
carefully crafted.
Representative Kawasaki noted that the bill would add non-
profit regional health organizations. He asked whether
joint-action agencies could be for-profit entities, and
whether those agencies were rate regulated.
Mr. Mitchell answered that the entities were non-profit and
were not rate regulated. He added that joint-action
agencies set their power rate based on a break-even
proposition and had no profit motive.
Representative Kawasaki wondered whether the bill should
recommend that someone outside of the municipal bond bank
review requests by examining the need of the requesting
region.
Representative Gara believed the bill was strong and hoped
that it would receive committee support. He queried the
bank's opinion of the policy change found on Line 21 of the
bill; the bond bank would no longer finance more than 49
percent of a project.
Mr. Mitchell asserted that the change made it easier for
the bond bank to support the bill because it mitigated
risk. The change would require the partner to provide
either equity, or alternative funding sources, to share in
the risk.
9:20:36 AM
Mr. Mitchell followed up on an earlier question by Vice-
Chair Saddler. He read from AS 44.85.180:
(d) In deciding to purchase municipal bonds of a
municipality, the bond bank authority shall give
preference to the municipalities referred to in AS
44.85.005. In addition, the following, listed in order
of preference, are preferred purposes of the municipal
bonds that may be considered by the bond bank
authority for purchase: schools, waste water treatment
facilities, fire protection and public safety
facilities, public health facilities, and public
transportation facilities.
Vice-Chair Saddler pointed to Page 3, lines 18 to 19, which
added conditions to the issuance of bonds for regional
health corporations. He asked what form documentation of an
anticipated need the bond bank would require from the
Department of Health and Social Services.
Mr. Mitchell replied that a letter from the commissioner or
a certificate of need analysis would suffice.
Representative Pruitt wondered what the benefit of
increasing the regional quality of care actually meant, and
did it include cost savings.
Mr. Mitchell answered that it was a two-pronged test; the
first would be a recognition that there would be an
improvement of the quality of care in the region, and that
the state expected that the facility would result in a
financial benefit to the state through reduced costs.
Representative Pruitt asked about the moral obligation to
the state.
Mr. Mitchell answered that the bill did not require a full-
faith credit pledge of the state. He listed the tiers of
credit to which an entity could obligate itself. He
believed that if the state saw an opportunity to increase
the quality of healthcare in the state, which would also
benefit the state financially, the benefits were worth the
risk. He relayed that the risk would be minimized to the
extent that the bond bank would be obtaining an
authorization, not a requirement, to lend money. He
stressed that the bank intended to be repaid 100 percent of
the time, questions about an organizations financial
viability could result in impairment of their ability to
access the program.
9:26:43 AM
Representative Kawasaki spoke to the add-on for joint-
action agencies. He understood that the commissioner of
DHSS would detail a significant financial benefit to the
state, but that joint-action agencies would not bear that
burden of proof. He appreciated the sideboards that had
been crafted into the legislation, but expressed concern
that the joint-action agencies could place the bond bank at
risk.
Mr. Mitchell answered that the difference was warranted due
to the different nature of the organizations. He said that
a municipality that owned a utility would not be subject to
the Regulatory Commission of Alaska (RCA) setting its
rates; rates could be adjusted at the city council level
based on need, their loans would be evaluated based on the
merits of the enterprise activity. The joint-action agency,
as was currently provided for in statute, would be similar
in nature.
Vice-Chair Saddler reiterated his concern about the
expansion of the bond bank's authority. He thought that the
bond bank should provide a guideline as to the limitations
of the bank's financing authority expansion.
Mr. Mitchell restated the question for clarification. He
contended that the question was a difficult one because the
state's interest would be the basis of why the bond bank
program would be taking action in the first place. The
bank would be providing an opportunity to borrow at lesser
cost than would otherwise be available.
Vice-Chair Saddler asked if there was a standard for the
state's interests.
9:31:21 AM
Mr. Mitchell replied that the parameters for the standard
were broad.
Vice-Chair Saddler asked whether the Municipal League had
offered a position on the legislation.
Mr. Mitchell replied that he had not heard any concerns
from the Municipal League.
Representative Wilson asked about the difference between
using Alaska Industrial Development and Export Authority
(AIDEA) versus the Alaska Municipal Bond Bank Authority
(AMBBA) to fund projects.
Mr. Mitchell believed that the AMBBA program was more
streamlined than AIDEA, which resulted in a more efficient
program. He added that the bank had a program that was set
up strictly as a credit enhancing program, which allowed
the bank to provide lower costs and better execution. He
thought that having several funding options for projects
was beneficial to local municipalities.
9:35:10 AM
Representative Wilson wondered whether a program could be
funded by both the bond bank at 50 percent, and another
agency in the state for the other 50 percent.
Mr. Mitchell replied it was possible. He said that the
organizations involved would need to be in good
communication with each other.
Representative Wilson thought that it would be good for the
committee to have a better understanding of underutilized
state agencies. She voiced support for the project.
Representative Munoz whether the joint-action agency
language spoke to only municipally owned utilities, or
could it be a combination of a non-profit and a
municipality.
Mr. Mitchell understood that the statute offered a small
window of potential joint-action agencies because they were
required to consist of several utilities that were coming
together to purchase a facility previously owned by a state
agency.
9:38:35 AM
Representative Munoz understood that that joint-agency was
directed specifically to the Southeast Alaska Power Agency
(SEPA) and would not include other organizations, such as
the Inside Passage Electric Cooperative (IPEC).
Mr. Mitchell answered that IPEC would not qualify unless
they were purchasing utilities formerly owned by the state.
Representative Munoz understood that a joint-agency could
apply for up to 100 percent of its financing for a project.
Mr. Mitchell replied in the affirmative.
Representative Pruitt wondered at what point the bank would
reach the limit in its ability to expand bonding capacity.
Mr. Mitchell answered that it would be a moving target. He
likened the bond bank's credit to a form of cosigning
indirectly by the state. He relayed that the state would
have a lesser rating than the current AAplus if the
authority were based on the borrowers in the current pool;
the pool size was limited because the state was small. He
believed that the state's financial strength would inform
the bond bank's expansion limit.
9:42:32 AM
Co-Chair Thompson OPENED public testimony
Co-Chair Thompson CLOSED public testimony.
Vice-Chair Saddler MOVED to REPORT CSSB 46(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes.
There being NO OBJECTION, CSSB 46(FIN) was REPORTED out of
committee with a "do pass" recommendation and with one
previously published indeterminate fiscal note: FN1 (DHS);
and one previously published fiscal impact note: FN2 (DHS).
9:43:26 AM
AT EASE
9:45:37 AM
RECONVEYNED
HOUSE BILL NO. 44
"An Act relating to sexual abuse and sexual assault
awareness and prevention efforts in public schools."
9:45:37 AM
Co-Chair Neuman MOVED to ADOPT the proposed committee
substitute for HB 44, Work Draft 29-LS0258\P (Glover,
4/17/15). There being NO OBJECTION, it was so ordered.
JANE PIERSON, STAFF, REPRESENTATIVE STEVE THOMPSON,
explained the changes in the legislation. She shared that a
section had been added to address dating violence and abuse
awareness and prevention efforts in public school. She
noted that the changes could be found on Page 2, line 15.
REPRESENTATIVE CHARISSE MILLETT, SPONSOR, testified that
the legislation had been crafted closely to Erin's Law,
with the addition of the dating violence curriculum. She
reminded the committee that the state face an epidemic in
the area of child abuse and child sexual assault. She
believed that the legislation was important to address the
plight of sexual assault, and the subsequent social issues
that stemmed from abuse.
9:48:58 AM
Co-Chair Neuman shared a constituent story pertaining to
dating violence.
9:50:24 AM
CINDY MOORE, SELF, ANCHORAGE (via teleconference), urged
the committee to support the legislation. She revealed that
21 other states currently mandated schools to address
dating violence. She furthered that patterns of dating
violence staring in the teen years carried over into adult
relationships as domestic violence. She shared that her
daughter, Breanna, had been shot and killed by her abusive
boyfriend. She lamented that she and her husband had not
been aware of the abuse. She asserted that ignoring the
vastness of dating violence and its devastating
consequences sent the message to young people that dating
violence was a legitimate behavior. She hoped that
lawmakers would use their power to fight for the lives of
young people. She offered national statistics related to
teen dating violence. She contended that, statistically,
Alaska was the most dangerous state in the nation based on
the Federal Bureau of Investigations (FBI) four major
violent crime categories of murder, aggravated assault,
robbery, and forcible rape. She added that Anchorage and
Fairbanks were on the Forbes 2015 list of the nation's most
dangerous cities for women. Alaska leads the nation in
rapes per capital at three times the national average.
Alaska has the nation's highest rate of women murdered by
men at two and a half times the national average. She
believed that teen dating violence awareness curriculum
could have saved her daughter's life.
BUTCH MOORE, SELF, ANCHORAGE (via teleconference),
testified that 81 percent of parents were unaware of teen
dating violence. He spoke to a proposed amendment to the
legislation that would help educate peers about what to do
if they suspected a friend was being abused. He noted that
his daughter's friends had been aware of the abuse, but had
not known how to reach out for help. He believed that the
education and tools contained in the legislation would
immediately save lives. He likened the dating violence
prevention to seat belts being installed in cars to prevent
fatal accidents. He spoke to a national study performed by
the National Conference of State Legislators that found
that 75 percent of all youth grades 7 through 12, were
dating; in the prior 12 months of the survey, 10 percent of
those people experienced teen dating violence and another
10 percent experience some sort of sexual assault or rape.
The numbers in Alaska were much higher.
9:59:23 AM
Co-Chair Neuman shared that families had approached him
before concerning the issue of sexual abuse. He asserted
that the problem needed to be addressed.
Co-Chair Thompson CLOSED public testimony.
Representative Wilson thought that there was already
someone within the Department of Education that was
assisting on the development of curriculum related to
Erin's Law.
MICHAEL HANLEY, COMMISSIONER, DEPARTMENT OF EDUCATION AND
EARLY DEVELOPMENT, relayed that the department had one
staff member that focused on health in Alaska's schools
through the previous administration's Choose Respect
campaign. He added healthy relationships had been added
into a small percentage of the state's high school and
middle school curriculum. He said that the program was
optional for districts and, while making a difference where
offered, was not reaching all schools or elementary
schools. He said that the currently optional programs were
not comprehensively reaching all of the schools in the
state in the way that was suggested in the legislation.
Representative Wilson wondered how much the curriculum in
the bill would cost. She asked why oversight of the program
by the department had not been written into the bill.
Commissioner Hanley responded that the question would be
more appropriately addressed to the bill sponsor. He said
that he had seen examples of curriculum that could be
available at little, to no, cost. He understood that
several school districts had K-12 sexual abuse prevention
programs already in place. He conceded that some districts
had testified that there would be additional cost to
implement the legislation.
10:05:26 AM
Representative Wilson expressed discomfort with the sexual
abuse prevention part of the legislation. She asserted that
teachers were not social workers; she believed that the
committee needed to hear from the Office of Children's
Services (OCS) concerning mandatory reporting.
Representative Pruitt asked how the bill would change
current policies.
Commissioner Hanley replied that it would solidify and
quantify what was expected from each of the school
districts so that all students, across the state, had
access to the education.
Representative Pruitt understood that teachers were already
mandatory reporters of sexual abuse.
Commissioner Hanley replied in the affirmative.
Representative Pruitt queried whether teachers were already
required to undergo training specific to recognizing signs
of sexual assault or dating violence.
Commissioner Hanley replied that mandatory reporters:
certificated staff, administrators, athletic coaches, went
through training to recognize signs of potential abuse and
neglect, and to know when they were obligated to report
instances. He said that the bill spoke to training for
teachers, which could overlap with training they had
already received, but also highlighted the teacher's
responsibility to educate students on the issues of sexual
abuse and dating violence.
Representative Pruitt noted that the Erin's Law portion of
the bill pertained to grades K-12. He expressed concern for
exposing children to issues surrounding sexual abuse. He
worried about the age appropriateness of the material for
certain children.
10:09:32 AM
Commissioner Hanley replied that children should be
informed but not exposed to inappropriate material. He
stated that the language in the bill directed local school
boards to determine the best way to move forward for the
students under their per view. He relayed that he had
experienced healthy, age appropriate materials with
programs already in schools. He noted that parents already
had the choice to option out of the current offerings. He
pointed out to the committee that the current legislation
also maintained the parent's choice to option out of the
proposed programs. He asserted that the bill did not
mandate inappropriate curriculum, but rather required
school districts understand their responsibility in meeting
the needs of their students in regard to health education
and sexual abuse.
Representative Gara asserted that under the legislation the
training would be under local control and age appropriate.
He asked whether that language covered the issue of
teaching children things beyond the scope of their years.
Commissioner Hanley answered in the affirmative.
Vice-Chair Saddler noted a provision on Page 2, line 10,
which offered parents the choice to option out of school
sexual awareness training for their children. He called on
parents to be active in the lives of their children.
Representative Wilson felt that the bill was moving too
quickly through committee. She argued that the bill could
have negative repercussions.
Representative Wilson MOVED to ADOPT conceptual Amendment
1:
Page 1, line 11
Delete "shall"
Insert "may"
Page 2, line 16
Delete "shall"
Insert "may"
Representative Gara OBJECTED for the purpose of discussion.
Representative Wilson believed that the proposed
legislation would burden school districts with a program
that would have no oversight by the state.
10:15:29 AM
Co-Chair Thompson clarified where the amendment would
affect the bill.
Co-Chair Neuman believed the amendment would be considered
friendly by the bill sponsor.
Representative Edgmon wondered whether the amendment would
negate the intent of the bill.
GRACE ABBOTT, STAFF, REPRESENTATIVE CHARISSE MILLETT,
believed that the amendment would make the bill
unnecessary. She asserted that school districts already had
the capacity to implement the programs laid out in the
bill; 50 percent of the state's districts already had
active programs.
Representative Wilson did not believe it took away the
effectiveness of the bill. She contended that the
Department of Education would not be monitoring the
implementation of the program throughout the state. She
wondered whether schools could lose funding if parents
complained to the department about the program.
Ms. Abbott replied that the teeth of the bill lay in the
word "shall" and requiring that school districts implement
the curriculum.
Representative Wilson disagreed. She feared that there
would be negative repercussions for schools that did not
adopt the curriculum laid out in the bill. She believed
that the language was inconsequential if there was no one
from the department that would be monitoring the bill.
10:18:20 AM
Co-Chair Neuman noted the zero fiscal note and agreed that
the conceptual amendment was unnecessary.
Representative Wilson maintained her argument.
Commissioner Hanley replied that the department worked with
districts to build the capacity to implement programs and
maintain compliance with state statute.
Representative Wilson understood that if a district was out
of compliance the department would withhold funding.
Commissioner Hanley reiterated that the department would
work with the district in order to bring that district into
compliance. He asserted that one tool available to the
department was the ability to withhold funding;
Commissioner Hanley stressed that the tool was not favored,
and had never been applied. He recognized that when
districts were intentionally out of compliance with state
law the department had the responsibility to respond.
10:20:34 AM
Representative Wilson felt that the fiscal note was not
really zero because the department would have to provide
oversight for the legislation. She opined that the bill
created an unfunded mandate that could lead to the
potential withholding of funds to districts.
Representative Pruitt wondered whether the department had
information on the proposed programs that could be provided
to the various districts in order for them to determine
whether they wanted to facilitate the programs.
Commissioner Hanley replied that it would be up to local
districts whether or not to implement the programs, but
that the department would work alongside each district to
work through challenges.
Representative Kawasaki reiterated concerns that the
amendment would weaken the intent of the bill.
Vice-Chair Saddler requested further clarity in the
department's answer.
Commissioner Hanley reiterated that the department had
never withheld funding from a school district, but retained
the capability to do so if districts were out of compliance
with the law.
Vice-Chair Saddler demanded a yes or no answer to the
question of whether the department would withhold funding
from schools that did not implement the programs laid out
in the bill.
Commissioner Hanley replied that the question begged
something more than a yes or no answer.
Co-Chair Neuman wondered whether school would be considered
in compliance by simply providing to students documents on
the subject matter.
Ms. Abbott replied in the affirmative.
Representative Munoz wondered whether there were provisions
in state law that would allow a community to opt out of the
policy.
Commissioner Hanley replied that statute would have to be
changes to reflect the possibility of schools to opt out of
a state law.
10:25:03 AM
Representative Wilson wondered whether a school would be in
compliance by sending home age appropriate materials to be
discussed at home.
Ms. Abbott believed that if the materials were sent home
without any classroom discussion time the school would not
be in compliance.
Representative Wilson understood that classroom time would
be necessary for both the dating violence and the sexual
assault pieces of the bill.
Ms. Abbott clarified a teacher hanging out documents during
class would qualify as class time. If the materials were
placed in a mailbox or back pack without any discussion,
the school would be out of compliance.
A roll call vote was taken on the motion to adopt
conceptual Amendment 1.
IN FAVOR: Wilson, Gattis, Pruitt
OPPOSED: Edgmon, Gara, Guttenberg, Kawasaki, Munoz,
Saddler, Neuman, Thompson
The MOTION FAILED (3/8).
Co-Chair Neuman noted that the Rasmuson Foundation had
committed funds to help support the legislation.
Co-Chair Neuman MOVED to REPORT CSHB 44(FIN) out of
committee with individual recommendations and the
accompanying fiscal note.
Representative Wilson OBJECTED. She spoke to her objection.
She WITHDREW her OBJECTION.
There being NO further OBJECTION, CSHB 44(FIN) was REPORTED
out of committee with a "do pass" recommendation and with
one new zero fiscal note from the Department of Education
and Early Development.
ADJOURNMENT
10:29:40 AM
The meeting was adjourned at 10:29 a.m.