Legislature(1997 - 1998)
03/25/1997 09:03 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
MINUTES SENATE FINANCE COMMITTEE March 25, 1997 9:03 A.M. TAPES SFC-97, # 69, Sides 1 & 2 (000-590, 590-234) CALL TO ORDER Senator Bert Sharp, Cochair, Senate Finance Committee, convened the meeting at approximately 9:03 A.M. PRESENT In addition to COCHAIR SHARP, SENATORS DONLEY, PHILLIPS, TORGERSON and ADAMS were present when the meeting was convened. COCHAIR PEARCE and SENATOR PARNELL arrived while the meeting was in progress. Also Attending: TOM WILLIAMS, Staff, Senate Finance Cochair Sharp; MARGOT KNUTH, Assistant Attorney General, Department of Law; NANCY SLAGLE, Director, Administrative Services, Department of Transportation and Public Facilities; FORREST BROWNE, Investment Officer, Department of Revenue; and aides to committee members. Also Attending Via Teleconference: CAPT. TED BACHMAN, Alaska State Trooper, Anchorage; KEN LANCASTER, Mayor, Soldotna. SUMMARY INFORMATION SB 126 STATE EMPLOYEES RIP AMENDMENTS TOM WILLIAMS explained changes in a proposed CS work draft. SENATOR PHILLIPS MOVED for adoption of the proposed CS. Without objection, CSSB 126(FIN) was ADOPTED. SENATOR PHILLIPS MOVED CSSB 126(FIN) from committee with individual recommendations and accompanying fiscal notes. There was no objection and CSSB 126(FIN) was REPORTED OUT of committee with an indeterminate fiscal note from Office of Management and Budget and a zero fiscal note from Department of Administration. SB 68 TASK FORCE ON PRIVATIZATION SENATOR DONLEY MOVED to RESCIND previous committee action of reporting out CSSB 68(FIN). Without objection, the action was rescinded. SENATOR DONLEY MOVED to ADOPT CSSB 68(FIN). It was ADOPTED without objection. SENATOR DONLEY MOVED Amendment #4. Without objection, Amendment #4 was ADOPTED. SENATOR DONLEY MOVED Amendment #3. Senators Torgerson and Adams objected. A vote was taken and the amendment failed by a 5 to 1 vote. SENATOR ADAMS MOVED CSSB 68(FIN) from committee with individual recommendations and an updated fiscal note, then WITHDREW his motion. SENATOR DONLEY MOVED to RESCIND previous action of failing to adopt Amendment #3. COCHAIR PEARCE objected. SENATOR DONLEY WITHDREW his motion to rescind. SENATOR ADAMS renewed his motion to move the bill from committee. Without further objection, CSSB 68(FIN) was REPORTED OUT with new fiscal notes from Legislative Affairs Agency (17.9), Office of Management and Budget (indeterminate) and Office of the Governor (indeterminate). SB 3 MINOR'S CURFEW VIOL. HEARD IN DIST. CT. COCHAIR PEARCE, Sponsor, testified on behalf of the bill. Testimony was also heard from CAPT. TED BACHMAN and MARGOT KNUTH. SENATOR ADAMS MOVED Amendment #1. A vote was taken and Amendment #1 FAILED by a vote of 4 to 2. COCHAIR PEARCE MOVED CSSB 3(JUD) from committee with individual recommendations and accompanying fiscal notes. Without objection, CSSB 3(JUD) was REPORTED OUT with a previous fiscal note from the Court System (24.3), previous fiscal notes from the Departments of Administration (indeterminate) and Health and Social Services (indeterminate), and a zero fiscal note from the Department of Public Safety. SB 136 BUDGET AND APPROPRIATION BILLS Amendments #1 and #4 had been previously adopted. Amendment #3, which had been held, was not offered. SENATOR PARNELL MOVED Amendment #5. COCHAIR SHARP objected, then withdrew his objection. There being no further objection, Amendment #5 was ADOPTED. SENATOR PARNELL MOVED CSSB 136(FIN) from committee with individual recommendations and a zero fiscal note. Without objection, CSSB 136(FIN) was REPORTED OUT with a zero fiscal note from the Office of Management and Budget. SB 34 DOT MAINTENANCE FACILITY AT SOLDOTNA SENATOR TORGERSON, Sponsor, testified on behalf of SB 34. Testimony was also heard from NANCY SLAGLE, MAYOR KEN LANCASTER and FORREST BROWNE. SENATOR ADAMS MOVED Amendment #1. Without objection, Amendment #1 was ADOPTED. SB 34, as amended, was HELD for further consideration. SENATE BILL NO. 126 "An Act relating to the retirement incentive program for state employees; and providing for an effective date." COCHAIR SHARP called attention to the proposed CS work draft before the committee and invited Mr. Williams to address it. TOM WILLIAMS, Staff, Senate Finance Cochair Sharp, referred to the work draft which incorporated amendments to Section 3, page 2, and Section 4, line 20, in Section 22 (f)(1), which had previously been Section 22 (f). The Division of Retirement and Benefits recommended the reference be changed and Legal Services concurred. SENATOR PHILLIPS inquired if the suggestion made by APEA and AFT to go from three years to five years was considered. MR. WILLIAMS responded that those provisions change the way one would calculate who would be included in the pool. The intent of SB 126 was to encourage the administration to utilize the existing pool, not to change the nature of it. SENATOR PHILLIPS acknowledged it was a policy decision. COCHAIR SHARP called for a motion on the CS. SENATOR PHILLIPS MOVED for adoption of the proposed CS. COCHAIR SHARP referenced the technical amendment on page 2, line 20. He asked if there were further questions or testimony. There being none, CSSB 126(FIN) was ADOPTED without objection. SENATOR PHILLIPS MOVED CSSB 126(FIN) from committee with individual recommendations and accompanying fiscal notes. There was no objection and CSSB 126(FIN) was REPORTED OUT of committee with an indeterminate fiscal note from Office of Management and Budget and a zero fiscal note from Department of Administration. SENATE BILL NO. 68 "An Act relating to the Task Force on Privatization; and providing for an effective date." COCHAIR SHARP explained that the bill had been reported out of committee on 3-21-97 but there had been a difference between the actual amendment and what the drafter put in the CS, so he wanted to bring it back before committee for clarification. SENATOR DONLEY MOVED to RESCIND previous committee action of reporting out CSSB 68(FIN). Without objection, the action was rescinded. SENATOR DONLEY commented that he had spoken with SENATOR PARNELL about his concern. He explained that the specific amendment adopted previously dealt with modifying the number of members of the task force. The amendment draft sent over by Legal Services was different than what they intended to draft. The proposed CS before the committee reflects the actual motion to Section 2, page 2. COCHAIR SHARP stated for clarification that the confusion was over page 2, lines 6-7, and that the proposed CS was the correct version. SENATOR DONLEY concurred, adding that it was what had been discussed and voted on. SENATOR DONLEY MOVED to ADOPT CSSB 68(FIN). It was ADOPTED without objection. SENATOR DONLEY MOVED Amendment #4. He explained that he and SENATOR PARNELL developed the language. Under the CS, the task force selects a chair and vice-chair from among its members on page 2, line 14. That would be deleted and replaced with co-chairs, one of which would be selected by the Senate President and one by the House Speaker. They both thought that with past experience with the Long Range Financial Planning Commission it would be a good idea to keep the legislature more active in it and have more direct control. COCHAIR SHARP called for discussion or objection. There being none, Amendment #4 was ADOPTED. SENATOR DONLEY MOVED Amendment #3. It would adopt a new fiscal note to fund the additional public member proposed in the CS and a full-time staff person to carry out the duties of the task force from July 1, 1997 to December 1, 1998. Senators Torgerson and Adams objected. SENATOR ADAMS opposed the additional staff position, as did SENATOR TORGERSON, who added that he would rather hire a contractual facilitator rather than a staff person. A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Donley OPPOSED: Torgerson, Phillips, Adams, Pearce, Sharp And so, the MOTION FAILED (1-5). COCHAIR SHARP called attention to the $17.9 thousand fiscal note from Legislative Affairs Agency and noted it accommodated the additional member. He invited additional comments or amendments to SB 68 and there were none. SENATOR ADAMS MOVED CSSB 68(FIN) from committee with individual recommendations and an updated fiscal note. SENATOR DONLEY reiterated his position that for the task force to be effective it needed personnel. He referred to significant staff cuts taken by the legislature and appealed to the committee to rescind their action in failing to adopt Amendment #3. SENATOR ADAMS WITHDREW his motion at the request of the Cochair. SENATOR DONLEY MOVED to RESCIND previous action of failing to adopt Amendment #3. COCHAIR PEARCE objected and spoke to her objection. She appreciated the concerns and agreed that to be credible, complete and have integrity, the task force would need good staff with excellent writing and researching skills. It was her belief that there existed latitude within the legislative budget to provide staffing without the need to attach a fiscal note to the bill. She acknowledged inconsistencies in the past regarding fiscal notes attached to task force bills, but noted that in the past two years, the leadership of both houses stepped forward to provide adequate staffing. She believed there were adequate funds in the budget to do so again, if needed. She added that Legislative Finance, Legislative Research, and Legal Services staff were underutilized during the interim, and the task force could benefit from some of their skills and availability. SENATOR ADAMS agreed and added that Legislative Council could also get someone on contract. SENATOR DONLEY WITHDREW his motion to rescind. SENATOR ADAMS renewed his motion to move the bill from committee. Without further objection, CSSB 68(FIN) was REPORTED OUT with new fiscal notes from Legislative Affairs Agency (17.9), Office of Management and Budget (indeterminate) and Office of the Governor (indeterminate). SENATE BILL NO. 3 "An Act authorizing prosecution and trial in the district court of municipal curfew violations." COCHAIR PEARCE, Sponsor, brought up a news item in Juneau last fall, in which the Assembly put a curfew aside because they found they had no avenue to prosecute offenders. She read the Sponsor Statement relating to SB 3 (copy on file). Following is an excerpt of the first and last paragraphs: "Currently, juvenile offenses other than traffic, tobacco, fish and game, parks and recreational facilities, or alcohol violations, are handled through municipal courts where these exist, or are not handled at all because of the Division of Family and Youth Services caseload. SB 3 will mandate that all juvenile curfew violations be handled in District Court. Alaska Delinquency Rules will not apply, and the minor accused of the offense will be charged, prosecuted, and sentenced in the District Court in the same manner as an adult. When a minor is charged, prosecuted and sentenced for an offense under this subsection, the minor's parent, guardian, or legal custodian will be present at all proceedings." COCHAIR PEARCE pointed out the Judiciary CS was before the committee. She stated there was a "quilt of ability" for juveniles to be handled in court in the state. Some judges take a more active interest at the juvenile level, one of whom was Judge Froehlich of Juneau, who sets aside Friday afternoons for juvenile cases. He was aggressive in prosecuting violations of alcohol and tobacco and informed her that the lion's share of people he has seen on those charges would also come before him on a curfew violation. Her intention was to give communities the tools they need to intervene in children's problems before they become large. If they can be stopped with a curfew violation, young people could be diverted from a life in the corrections system. COCHAIR PEARCE mentioned the Court System fiscal note of $24 thousand, stating they were not sure how many cases they might see. Anchorage might choose to go with an ordinance and start prosecuting their curfews at the district court level rather than at the municipal level. Section 2 was a suggestion from Anchorage Assemblyman Joe Murdy which would allow the option for community work in place of fines. The reason it was permissive was based on a recent case in which the judge decided if a youth was sentenced to community work, it was the sort of sentence that should have a jury trial. She wanted to make sure the cases didn't automatically go to a jury trial, so it was made permissive. In some Anchorage cases the parents of the offender were unwilling to pay the fine. She was hopeful that between parental and court pressure they could get young people to do community service to work off their fine. In response to a question from SENATOR PHILLIPS, COCHAIR PEARCE did not recall receiving a position paper from the Anchorage Municipality, but did receive one from Juneau. She acknowledged the idea came from the assembly. SENATOR ADAMS brought up a proposed amendment for the committee's consideration. His understanding was that SB 3 mandates that juvenile curfew violations be handled in district courts and the minor would be charged, prosecuted and sentenced in the same manner as an adult. It would shift the burden for municipal violations from municipal hearing officers to state district court. The juvenile would get a criminal record and potential jail time. He believed it was a municipal rather than a state problem. Criminal records should not belong to a youth that makes a mistake with curfew violations. His proposal came from the Governor's Youth and Justice working group as a recommendation. He reiterated that curfew violations should be a civil rather than a criminal issue, a policy issue they must decide at the table. He wanted to keep the fines to a maximum of $250. COCHAIR PEARCE responded to a question by SENATOR PHILLIPS by stating that SB 3 would not affect the Anchorage ordinance. They could choose to change it and use the district court system, but they presently have their own system. The main problem is in Juneau and other communities without their own court system and ability to prosecute curfew offenders. She acknowledged that the Department of Health and Social Services approached her about the amendment proposed by SENATOR ADAMS. She believed the department did not have the manpower to handle all the young people and questioned the fiscal impact of the amendment. The presence of SENATOR PARNELL was noted. SENATOR PHILLIPS questioned if the legislation was assuming responsibility for local government and adding more to the state budget. He also inquired why it was different from other ordinances around the state. He then agreed with SENATOR ADAMS' point that it had a different attitude, that of a criminal record versus a fine. COCHAIR SHARP called for testimony from those on teleconference. CAPT. TED BACHMAN, Alaska State Trooper, deferred to Ms. Knuth, and asked to testify after her. MARGOT KNUTH, Assistant Attorney General, Department of Law, approached the committee. She outlined two special projects she had been working on this year. One had to do with the need for more prison beds and the other was trying to work on juvenile justice issues and keep facilities from being filled up. The governor recently sponsored a conference on youth and justice and asked a group of ninety citizens and experts around the state to look at the growing problem of juvenile crime and make recommendations on what could be done both at the local level and the state level. One of the most significant findings was that there was a gap in the system between doing almost nothing for minor offenses and "then landing with both feet" on juveniles who are committing the most serious offenses. A need for consistent, swift and certain consequences has been identified for the low level offenses. The problem with utilizing the statewide DHSS system is a growing population and decreasing budget, and they have been unable to do all and be all. The department has had to focus their energy on the serious offenders because of finite resources. MS. KNUTH testified that there were a number of communities who have identified their juveniles at risk of becoming criminal offenders and they wish to do something. The desire to work with low level offenders was taking different forms throughout the state depending on the nature of the community. She briefly described the Anchorage Court system in which they use a hearing officer, similar to a judge. The juvenile is cited and required to go before the hearing officer and be held accountable. In the small communities of Elim and Koyuk, they started a pilot project that enabled them to use a village court system, which was different than the hearing officer, but it focused on the same group of at- risk kids and created an authority figure who meted out appropriate consequences for juveniles. MS. KNUTH continued by stating the problem with SB 3 was fairly typical of the way the state has been trying to deal with those at risk of becoming offenders, which was to put it back on the state. It can be appropriate, but at the same time, a community response would be more appropriate and more likely to result in swift, certain and consistent consequences. She felt there was a need for systems that could be utilized. SENATOR ADAMS' amendment would increase the tools that could be used by communities, which was in the spirit of the need identified by COCHAIR PEARCE. MS. KNUTH described the proposed amendment. First, it created a possibility of civil penalties instead of criminal penalties for kids who are not criminals yet but are at risk. Rather than use the criminal system for them, it made more sense to use civil penalties. She noted "We've run into this problem of if the fine is too big or community work service is ordered, then it is treated like a criminal case and there is the right to a jury trial." The amendment reduces the fine from $1,000 to $250, which is something the Court of Appeals has identified as the cut-off level for a civil penalty. Section 2 would require that DHSS was notified of juveniles who are racking up civil penalties because they are the youth at risk of becoming serious offenders and they need some way to make sure there is a whole profile so they cannot escape. A significant problem now is there is no accountability or documentation to identify those at risk. Section 3, the civil penalties section, is what Anchorage is currently utilizing and wants to keep using. The municipal prosecutor had expressed concern that his workload would not allow more cases which would happen if they prosecuted in district court. The remaining sections of the amendment allow the department to delegate to communities the ability to respond to these low level offenses. That is what would create a formal system for the Elim and Koyuk agreement, the Mat-Su diversion panel, and some other systems used statewide. It would create a reporting mechanism so that DHSS doesn't lose track of those at risk of becoming chronic offenders. She believed that state government needed to be doing less and communities were asking to be empowered to do this work, so it seemed appropriate to create a new response level for kids at risk. CAPTAIN TED BACHMAN, Alaska State Trooper, testified next via teleconference from Anchorage. He added to Ms. Knuth's comments regarding the proposed amendment. One of his concerns was creating another subset of people who are prosecuted in adult court. He reiterated one of the findings of the governor's conference on juveniles that spoke against creating any more laws that would bring juveniles into adult court. He supported the accountability the amendment would create at the local level for the lower offenses. It provides another avenue that would help steer young people in the right direction. SENATOR ADAMS commented that he offered the amendment as a proposal to work with the sponsor. He felt it was good legislation but needed more work, communities need to be involved, and there was a middle ground that could be considered. COCHAIR PEARCE explained that the Judiciary Committee did look at the same idea, which had been offered by the HESS Committee. It was her feeling that a young person who faced a DHSS procedure is less likely to have an epiphany and decide they didn't want to be in that situation again than a person who had to face a judge. End SFC-97 # 69, Side 1 Begin SFC-97 # 69, Side 2 COCHAIR PEARCE continued with a discussion about unpaid fines resulting in court contempt problems and incarceration in a youth facility. That was the reason for adding the option of community service. She questioned whether DHSS could handle the workload that would be required by the amendment. After thinking through the proposal, she saw there were two directions to go, and she was more comfortable with the Judiciary CS version of the legislation. SENATOR ADAMS MOVED Amendment #1. COCHAIR PEARCE objected. A roll call vote was taken on the MOTION to adopt Amendment IN FAVOR: Phillips, Adams OPPOSED: Parnell, Torgerson, Pearce, Sharp And so, the MOTION FAILED (2-4). COCHAIR PEARCE MOVED CSSB 3(JUD) from committee with individual recommendations and accompanying fiscal notes. Without objection, CSSB 3(JUD) was REPORTED OUT with a previous fiscal note from the Court System (24.3), previous fiscal notes from the Departments of Administration (indeterminate) and Health and Social Services (indeterminate), and a zero fiscal note from the Department of Public Safety. SENATE BILL NO. 136 "An Act relating to the state budget and to appropriation bills." COCHAIR SHARP explained that the bill had been heard previously (3-21-97). Amendments #1 and #4 had been adopted and there was an additional amendment before the committee. SENATOR PARNELL informed the committee he would not offer Amendment #3. SENATOR PARNELL MOVED Amendment #5. COCHAIR SHARP objected for the purpose of explanation. SENATOR PARNELL explained that it would require a report from OMB detailing what funds and how much was expected to lapse in the fiscal year to be submitted to the legislature by the 45th legislative day. He justified that "we're gonna know what they need to make up in their budget through the supplemental process, we ought to also know how much money's left over in the budget to work with." SENATOR ADAMS asked to hear from the administration concerning the amendment. COCHAIR SHARP noted there was no one present to testify on behalf of the administration. He then withdrew his objection. There being no further objection, Amendment #5 was ADOPTED. SENATOR PARNELL MOVED CSSB 136(FIN) from committee with individual recommendations and a zero fiscal note. Without objection, CSSB 136(FIN) was REPORTED OUT with a zero fiscal note from the Office of Management and Budget. SENATE BILL NO. 34 "An Act giving notice of and approving a lease-purchase agreement with the City of Soldotna for a maintenance facility of the Department of Transportation and Public Facilities." SENATOR TORGERSON, Sponsor, explained SB 34 was a straightforward lease-purchase agreement with the City of Soldotna to finance and construct a Department of Transportation and Public Facilities maintenance facility. The current facility would be moved off the present location on the Kenai River. It has been a top priority for the city for a number of years. The bill originally started out with $6 million for the cost of the facility. Amendments in the Transportation Committee reduced the amount to $4.5 million with the lease payment obligation at $620 thousand per year. SENATOR ADAMS inquired where the project was on the DOTPF capital budget priority list. NANCY SLAGLE, Director, Administrative Services, DOTPF, testified in support of SB 34. She explained that the department had requested direct funding for the facility for the past 2-3 years. Some appropriations were provided for remediation, design and preliminary work. It was felt SB 34 was the most appropriate method to obtain funding for construction of the facility at this time. The project, as well as the removal and clean-up of the old site, was supported by the governor, but there was limited money available because of budget constraints. She noted that representatives from the Department of Revenue were present to explain that they have been assured by the state's bond counsel that the clean-up portion can be included in the financing package, as long as there is a tie to the exchange of the new land expected from the borough. SENATOR TORGERSON elaborated on the land issue. In 1964, when the borough was created, they selected a piece of DOTPF land for the borough building. It has been on the books since then, to be traded back to DOTPF when requested. It surfaced as part of the agreement to move the site. The borough has made land available to the state for the facility just outside Soldotna and are prepared to deed the land over to the state. There had been some discussion about whether or not to include approximately $1.5 million for clean-up of the contaminated maintenance yard site. The City of Soldotna has indicated they would go either way, but preferred not to sell revenue bonds to finance the clean-up. MAYOR KEN LANCASTER, City of Soldotna, testified via teleconference. He stated that it has been the city's number one priority to move the facility off the banks of the Kenai River. They are prepared to go to bond to build the new facility. It had been their prior understanding that the clean-up would be a separate item but they could go either way. They just want the facility moved as expeditiously as possible to protect the river. SENATOR TORGERSON brought up a previous appropriation of $600 thousand for clean-up, $400 thousand of which has been spent. He noted it was an ongoing process. It was difficult to tell how much it would cost and what the definition of clean was. He stated the department estimated a lower figure of $250 thousand, but no upper limit had been established. It was dependent on what they might find. He was uncertain if the clean-up should be included, possibly clouding the title, particularly with the City of Soldotna being the lead agency. He referred to a budgetary item included by the governor last year of $1 million, one-fifth of the project, and it was traded off for $600 thousand for additional clean-up. MAYOR LANCASTER added that it seemed strange to try to inflate the cost of a new facility by $1.5 million, when it (the clean-up) was actually occurring on another site. So instead of the facility only costing $4.5 million, it makes it worth $6 million. It did not make economic sense to him. COCHAIR SHARP invited Mr. Browne to discuss the nature of the fiscal note and proposed lease. FORREST BROWNE, Investment Officer, Department of Revenue, addressed the committee. The administration had suggested several technical changes to the proposed legislation that would minimize the cost of issuance of the financing. It would also give more flexibility in terms of refinancing. Their experience has been that typically, over the term of the lease, it gets refinanced two to three times when interest rates dip. So they have aggressively pursued refinancing any time they can save money on the lease payments. They had recommendations in three areas. The first area would clarify that the state bond committee would coordinate the financing. It is state debt, it will affect the state debt capacity, it will be rated as a state debt by the national bond rating services and it would be appropriate to be involved in that process. A second suggestion was to eliminate the requirement that the City of Soldotna be the nominal issuer of the debt. If there is flexibility in that regard, it could be structured that way, but in the event it could be combined with another financing coming along at the same time, they might wish to do that. As written, the bill specifies they must use the City of Soldotna, and having the flexibility could save over the long term. The third suggestion was to clarify that both the facility and land will be owned by the state at the end of the lease term. It was suggested in discussion earlier, however the bill speaks only to the facility being owned. They had found in previous situations that it became a controversy as to who actually owns the land. Summarizing, MR. BROWNE believed the changes would minimize the cost of issuance by eliminating duplicate costs at the city and state level for things such as bond counsel, financial consultants and advisors, etc. The changes will also allow the state flexibility to package the debt issuance with any others they might have. The financial markets respond well to the larger packages, enabling more competitive bids and lower interest rates. The changes would also allow the state to expeditiously refinance when interest rates dip. He cited a $1.5 million potential interest savings on refinancing of the Spring Creek Correctional facility. SENATOR PHILLIPS inquired if the three suggestions outlined were made in the Transportation Committee. MR. BROWNE responded that they had discussed them but the feeling was that because they were financially oriented, they would be best discussed in the Finance Committee. SENATOR ADAMS noted that lines 11-12 stated the state would own the facility and questioned Mr. Browne's concern. MR. BROWNE explained that his suggestion was to insert the words "and the land" after "facility." He added, "There has been confusion in lease-purchase transactions in the future where a city has claimed ownership of the land at the end of the term and then the state has to either buy it or renegotiate a lease." He believed it was the intent of the sponsor that the state would own the land when the debt was paid off. SENATOR TORGERSON had no problem with the proposal to include land. He had additional comments about the clean- up. The land transfer that the borough owes the DOTPF for the borough building land is supposed to be an appraisal saying they owe x number of dollars, then divide it by the assessed valuation of other acreage. What the borough is proposing for the clean-up is to increase the amount of acreage on the trade to give the bond counsel the feeling that they will secure the additional money with the land and tie it all into one facility. It went from early discussion of about fifteen acres for a DOTPF site to forty-eight acres. When the appraised value and number of acres are divided out by $6 million, "it doesn't pencil anywhere." He believed that was what the mayor was referring to. With respect to the state bond counsel, SENATOR TORGERSON stated that every purchase agreement he'd been involved in, the cities have always wanted to have this authority and not turn it over to the state. He referred to Palmer, Seward and Kenai as lead agencies. He objected to adding the state bond counsel and removing the city as the lead agency. SENATOR ADAMS MOVED Amendment #1, to insert "and land" after "facility" on page 1, line 11. SENATOR PARNELL stated for clarification that by adopting the amendment the state would take responsibility for environmental clean-up. SENATOR TORGERSON had no objection to adding the language, but was uncertain what the amount of acreage would be. He opposed adding the clean-up to the bond proposition because it was a state responsibility and may end up as a super clean-up site. To request the city to bond for clean-up is "above and beyond the call of duty of this municipality." SENATOR PHILLIPS asked if the state was refusing to pay for the clean-up. SENATOR TORGERSON said they didn't know a number either, it just happened to be a convenient way to finance the entire thing. COCHAIR SHARP asked if the city had the capability to issue tax-exempt bonds, or would the state's bonds qualify as tax- exempt. MR. BROWNE responded that they both have the ability. The city would not be on the debt, their credit would not carry the debt. It is clearly state debt, which was why they recommended the state be involved in the process. COCHAIR SHARP asked if there was any objection to Amendment COCHAIR SHARP stated his intention to hold SB 34 along with the Public Health Lab bill (SB 51), see where the capital budget figure was in a couple weeks and what options would be available at that time. And so, SB 34, as amended, was HELD for further consideration. COCHAIR SHARP announced upcoming bill hearings. ADJOURNMENT The meeting was adjourned at approximately 10:30 A.M.