Legislature(1993 - 1994)
01/20/1994 09:00 AM Senate FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
January 20, 1994
9:00 a.m.
TAPES
SFC-94, #9, Side 1 (000-end)
SFC-94, #9, Side 2 (end-285)
CALL TO ORDER
Senator Steve Frank, Co-chair, convened the meeting at
approximately 9:00 a.m.
PRESENT
In addition to Co-chair Frank, Senators Rieger, Kerttula,
and Jacko were present. Co-chair Pearce, Senators Sharp and
Kelly did not attend.
ALSO ATTENDING: Charles Mohlen, Commissioner, Department of
Labor; David Teal, Director, Administration Services
Division, Department of Labor; John Abshire, Deputy
Commissioner, Department of Labor; Judy Knight, Director,
Division of Employment Security, Department of Labor; Paul
B. Arnoldt, Director, Division of Workers' Compensa-tion,
Department of Labor; Arthur Snowden, Administrative
Director, Administration, Alaska Court System; Robert
Fisher, Chief of Fiscal Operations, Alaska Court System;
Jerry Burnett, aide to Senator Phillips and aide to
Legislative Budget & Audit Committee; Welker, legislative
auditor, Legislative Audit Division; Mike Greany, Director,
Legislative Finance Division; Dana LaTour and Kathryn
Daughhetee, fiscal analysts, Legislative Finance Division;
aides to committee members and other members of the
legislature.
SUMMARY INFORMATION
HB 370 - APPROP: FY 95 OPERATING AND LOAN BUDGET
Presentations were made by Charles Mohlen,
Commissioner, Department of Labor; and David Teal,
Director, Administration Services Division, Department
of Labor.
Presentations were made by Arthur Snowden,
Administrative Director, Administration, Alaska Court
System; and Robert Fisher, Chief of Fiscal Operations,
Alaska Court System.
Log notes of the meeting, handouts distributed by the
departments, and tape recordings of the meeting are on file
in the office of the Senate Finance Committee Secretary,
Room 520, State Capitol Building, Juneau, Alaska (465-4935)
and may be obtained through that office or the Legislative
Finance Division, P.O. Box 113200, Juneau, Alaska 99811-3200
(465-3795).
The overview by the Department of Law was rescheduled
to January 27, 1994.
SB 247 - An Act relating to state leases and to state
lease-purchase and lease-financing agreements, and
repealing a legislative authorization previously
given for acquisition of a facility through a
lease-purchase agreement; and providing for an
effective date.
Testimony was heard in support of SB 247 by Jerry
Burnett, aide to Senator Phillips and aide to
Legislative Budget & Audit Committee, and Welker,
legislative auditor, Legislative Audit Division.
The bill was REPORTED OUT of committee as amended
with individual recommendations and a zero fiscal
note from the Department of Administration.
SB 247 - An Act relating to state leases and to state
lease-purchase and lease-financing agreements, and
repealing a legislative authorization previously
given for acquisition of a facility through a
lease-purchase agreement; and providing for an
effective date.
Co-chair Frank announced that SB 247 was before the
committee. He invited Jerry Burnett, aide to Senator
Phillips and aide to Legislative Budget & Audit Committee,
to join the members at the table and speak to the bill.
JERRY BURNETT said that on January 12, 1994, LB&A met and
voted unanimously to introduce SB 247. It fully implemented
a recommendation in a 1993 Office of Management & Budget
Audit that said that all real property financing should
require approval by the legislature. SB 129 was amended to
require all agencies to bring real property financing before
the legislature for approval but during the interim further
changes to the lease financing statute were needed to
provide prior legislative approval for lease financing of
real property. It specifically included the court system,
the legislature, and cleared up any ambiguity whether or not
the University was included in the statute.
Mr. Burnett went on to say that the Department of Natural
Resources would no longer be able to take title to
facilities and act as a nominal lessor as they had with the
Wildwood facility, and the Court Plaza Building. The audit
on the Wildwood facility contained a legal opinion from Jack
Chenoweth, legislative legal services, that questioned the
statutory authority of the Department of Natural Resources.
Currently in statute, authority existed for Alaska Housing
Finance Corp. to issue lease back revenue bonds.
Senator Kerttula said he would be delighted to sunset that
whole agency and he was not comfortable with leaving the
authority there. Co-chair Frank had been thinking the
Department of Transportation & Public Facilities could be
given the authority. Discussion continued regarding this
issue.
Mr. Burnett stated that one legal opinion included in the
Wildwood audit said that if a state agency took title to a
public facility, it could create a debt for the state and
may be unconstitutional. A quasi-public corporation such as
Alaska Housing had the ability to contract debt. Mr.
Burnett said that AHFC was not specifically mentioned in the
bill.
Discussion was had by Senator Kerttula and Co-chair Frank
regarding this issue. Co-chair Frank said he wanted to
answer the question of who should own these buildings. He
felt SB 247 was adequate but he proposed a letter of intent
that said DNR was an inappropriate agency for the lessor and
if legislation were to authorize in the future, the
Department of Transportation & Public Facilities would be
the owner/manager agency.
RANDY WELKER, legislative auditor, Legislative Audit
Division, agreed that a letter of intent such as outlined by
Co-chair Frank would be acceptable. In the audit, the
concern was over financing and DNR was not authorized to do
this type of financing. In statute, AHFC would have that
authority.
Senator Rieger noted that on page 5, where it stated an
appropriation would constitute approval, it seemed that an
appropriation could be approved and if it was a lump sum,
the legislature could inadvertently approve something they
did not wish to approve. He wanted the wording to be more
specific.
Mr. Welker said that the section Senator Rieger was
referring to dealt only with leasing. This meant that the
appropriation it referred to dealt only with the lease for
the first year. Senator Rieger withdrew his objection.
Mr. Welker brought up to minor modifications to the bill on
page 6, line 16, and again on page 7, line 9. He asked that
the word "real" be inserted before "property" to make it
clear that it referred to real property.
Senator Kerttula MOVED an amendment to make the change
proposed by Mr. Welker. No objection being heard, it was
ADOPTED.
Senator Kerttula MOVED for passage of SB 247 from committee
with individual recommendations. No objection being heard,
it was REPORTED OUT with individual recommendations. Co-
chair Frank, Senators Rieger and Jacko signed a "do pass."
Senator Kerttula signed "no recommendation."
Note that on January 26, 1994, SB 247 was returned to
committee. CSSB 274(2d FIN) was REPORTED OUT again on
February 1, 1994.
ADJOURNMENT
The meeting was adjourned at approximately 11:00 a.m.
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