Legislature(2013 - 2014)SENATE FINANCE 532

03/27/2014 09:00 AM FINANCE


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 140 AIDEA: ARCTIC DEVELOPMENT PROGRAM/FUND TELECONFERENCED
Heard & Held
+ SB 166 BOARD OF NURSING; NURSES TELECONFERENCED
Moved CSSB 166(FIN) Out of Committee
+ HB 199 VPSO FIREARMS TELECONFERENCED
Scheduled But Not Heard
+= HB 266 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Heard & Held
+= HB 267 APPROP: MENTAL HEALTH BUDGET TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
= SB 195 POSTSECONDARY EDUCATION LOANS/GRANTS
Moved CSSB 195(FIN) Out of Committee
                 SENATE FINANCE COMMITTEE                                                                                       
                      March 27, 2014                                                                                            
                         9:17 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:17:51 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Kelly  called the Senate Finance  Committee meeting                                                                    
to order at 9:17 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Pete Kelly, Co-Chair                                                                                                    
Senator Kevin Meyer, Co-Chair                                                                                                   
Senator Anna Fairclough, Vice-Chair                                                                                             
Senator Click Bishop                                                                                                            
Senator Mike Dunleavy                                                                                                           
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
James Armstrong,  Staff, Senator Pete Kelly;  Diane Barrans,                                                                    
Executive  Director,  Alaska   Commission  on  Postsecondary                                                                    
Education,  Department of  Education and  Early Development,                                                                    
and  Executive  Officer,  Alaska Student  Loan  Corporation,                                                                    
Department  of  Education  and  Early  Development;  Senator                                                                    
Lesil McGuire;  Jesse Logan,  Staff, Senator  Lesil McGuire;                                                                    
Paul  Fuhs, Former  Board Chairman,  AIDEA, Board  Chairman,                                                                    
Marine  of  Alaska,  Juneau; Sarah  Lukin,  Chief  Operating                                                                    
Officer, PT  Public Policy  LLC, Juneau;  Ron Long,  City of                                                                    
Seward, Juneau;  Senator Cathy  Geisel; Jane  Conway, Staff,                                                                    
Senator Cathy Geisel;                                                                                                           
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Mark  Davis,  Deputy   Director,  Alaska  Industrial  Export                                                                    
Authority  (AIDEA),  Anchorage;   Nancy  Sanders,  Executive                                                                    
Administrator,  Alaska  Board  of  Nursing;  Sara  Chambers,                                                                    
Administrative     Operations    Manager,     Division    of                                                                    
Corporations,   Businesses,   and  Professional   Licensing,                                                                    
Department of Commerce,  Community and Economic Development;                                                                    
Beth  Farnstrom,  Chair,  Alaska  State  Board  of  Nursing,                                                                    
Anchorage; Patricia Senner,  Professional Practice Director,                                                                    
Alaska   Nurses  Association,   Anchorage;  Jana   Shockman,                                                                    
President, Alaska Nurses Association, Anchorage;                                                                                
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 104    APPROPRIATIONS FROM THE DIVIDEND FUND                                                                                 
                                                                                                                                
          SB 104 was SCHEDULED but not HEARD.                                                                                   
                                                                                                                                
SB 140    AIDEA: ARCTIC DEVELOPMENT PROGRAM/FUND                                                                                
                                                                                                                                
          SB  140  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
SB 166    BOARD OF NURSING; NURSES                                                                                              
                                                                                                                                
          CSSB 166(FIN)  was REPORTED out of  committee with                                                                    
          a "do  pass" recommendation and with  a previously                                                                    
          published zero fiscal: FN2(CED).                                                                                      
                                                                                                                                
SB 195    POSTSECONDARY EDUCATION LOANS/GRANTS                                                                                  
                                                                                                                                
          CSSB 195(FIN)  was REPORTED out of  committee with                                                                    
          a "do  pass" recommendation and with  a new fiscal                                                                    
          impact note  from the Department of  Education and                                                                    
          Early Development.                                                                                                    
                                                                                                                                
HB 199    VPSO FIREARMS                                                                                                         
                                                                                                                                
          HB  199  was  HEARD  and  HELD  in  committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
CSHB 266(FIN)                                                                                                                   
          APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
                                                                                                                                
          CSHB 266(FIN) was HEARD and  HELD in committee for                                                                    
          further consideration.                                                                                                
                                                                                                                                
CSHB 267(FIN)                                                                                                                   
          APPROP: MENTAL HEALTH BUDGET                                                                                          
                                                                                                                                
          CSHB 267(FIN) was HEARD and  HELD in committee for                                                                    
          further consideration.                                                                                                
                                                                                                                                
CS FOR HOUSE BILL NO. 266(FIN)                                                                                                
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain  programs,   capitalizing  funds,   and  making                                                                    
     reappropriations;  and   providing  for   an  effective                                                                    
     date."                                                                                                                     
                                                                                                                                
CS FOR HOUSE BILL NO. 267(FIN)                                                                                                
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     capital    expenses   of    the   state's    integrated                                                                    
     comprehensive mental health  program; and providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
9:18:14 AM                                                                                                                    
                                                                                                                                
Co-Chair Kelly discussed housekeeping.                                                                                          
                                                                                                                                
9:18:34 AM                                                                                                                    
                                                                                                                                
Co-Chair Meyer MOVED to ADOPT the proposed committee                                                                            
substitute for HB 266, Work Draft 28-GH2671\E (Wallace                                                                          
3/26/14) as a working document.                                                                                                 
                                                                                                                                
Co-Chair Kelly OBJECTED for the purpose of discussion.                                                                          
                                                                                                                                
Co-Chair Meyer MOVED to ADOPT the proposed committee                                                                            
substitute for HB 267, WORK DRAFT 28-GH2673\R (Wallace                                                                          
3/26/14) as a working document.                                                                                                 
                                                                                                                                
9:19:31 AM                                                                                                                    
                                                                                                                                
Co-Chair Kelly OBJECTED for the purpose of discussion.                                                                          
                                                                                                                                
9:20:27 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:21:56 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:22:05 AM                                                                                                                    
                                                                                                                                
Mr. Armstrong stated  that the 4 page  narrative in members'                                                                    
packets(copy  on file)  explained  the 19  changes that  had                                                                    
been  incorporated into  the new  committee substitute  (CS)                                                                    
for HB  266 and HB 267.  He noted that the  reports could be                                                                    
found on  the Legislative  Finance website. He  reviewed the                                                                    
changes:                                                                                                                        
                                                                                                                                
     Commerce, Community and Economic Development:                                                                              
     Community and Regional Affairs                                                                                             
     Community and Regional Affairs                                                                                             
     Page 5                                                                                                                     
     Lines 13-14                                                                                                                
     Increase  $50,000  (UGF)  -provides necessary  UGF  for                                                                    
     Kawarek  Inc.  to  provide  sufficient  match  for  the                                                                    
     Federal Aviation Administration funding                                                                                    
                                                                                                                              
     Commerce, Community and Economic Development:                                                                              
     Corporations, Business and Professional Licensing                                                                          
     Page 6                                                                                                                     
     Lines 4-7                                                                                                                  
     Intent   Language    -provides   direction    to   find                                                                    
     efficiencies  and  cost  savings  measures  while  also                                                                    
     limiting  the  burden  of   the  licensing  process  on                                                                    
     license holders                                                                                                            
                                                                                                                              
     Commerce, Community  and Economic  Development Economic                                                                    
     Development (Tourism Marketing):                                                                                           
     Page 6                                                                                                                     
     Line 10 & 19                                                                                                               
     Reduce $800,000 (UGF) -reduces program by 5%                                                                               
                                                                                                                              
     Education and Early Development:                                                                                           
     K-12 Support                                                                                                               
     Foundation Program                                                                                                         
     Page 10                                                                                                                    
     Lines 11-20                                                                                                                
     Intent  -provides policy  guidance to  school districts                                                                    
     utilizing K-12 support funding                                                                                             
                                                                                                                                
     Education and Early Development:                                                                                           
     Teaching and Learning Support                                                                                              
     Student and School Achievement                                                                                             
     Page 10                                                                                                                    
     Lines 31-32                                                                                                                
     Increase  $750,000  (UGF)  -provides  Innovative  Grant                                                                    
     funding                                                                                                                    
                                                                                                                                
     Environmental Conservation:                                                                                                
     Water                                                                                                                      
     Water Quality                                                                                                              
     Page 14                                                                                                                    
     Lines 3-4                                                                                                                  
     Increase  $400,000  (UGF) -partially  restores  funding                                                                    
     associated  with  State  Primacy for  Dredge  and  Fill                                                                    
     Activities                                                                                                                 
                                                                                                                                
     Health & Social Services:                                                                                                  
     Public Health                                                                                                              
     Health Planning and Systems Development                                                                                    
     Page 19                                                                                                                    
     Lines 17-30                                                                                                                
     Increase  $615,500  (UGF) -partially  restores  funding                                                                    
     for the  SHARP Program Intent language  added -provides                                                                    
     additional guidance to the program                                                                                         
                                                                                                                                
     Health & Social Services:                                                                                                  
     Senior Disability Services                                                                                                 
     Senior Community Based Grants                                                                                              
     Page 20 of HB 266 and Page 5 of HB 267                                                                                     
     Lines 15 & 20 of HB 266 and Lines 28 and 33 of HB 267                                                                      
     Increase $345,000  UGF -provides grant funding  for the                                                                    
     senior independent  living program ($200,000  GF/MH for                                                                    
     this program is included in HB 267)                                                                                        
     Increase $200,000  for a one-time  grant to  the Mat-Su                                                                    
     Aging and Disability Resource Center                                                                                       
                                                                                                                                
     Public Safety:                                                                                                             
     Alaska State Troopers                                                                                                      
     Page 29                                                                                                                    
     Lines 29-32                                                                                                                
     Intent  -provides  that  funding  may not  be  used  to                                                                    
     assist  federal  employees   in  enforcing  the  Marine                                                                    
     Mammal  Protection act  of 1972  as it  relates to  sea                                                                    
     otters in Southeast Alaska.                                                                                                
                                                                                                                                
     University of Alaska:                                                                                                      
     Fairbanks Campus                                                                                                           
     Page 38                                                                                                                    
     Lines 3 and 29                                                                                                             
     Increase  $500,000  -provides  funding  to  organize  a                                                                    
     fossil fuel integration program                                                                                            
                                                                                                                                
     Commerce, Community and Economic Development:                                                                              
     Alaska Seafood Marketing Institute                                                                                         
     Alaska Seafood Marketing Institute  Page 60 Lines 11-13                                                                    
     Increase   $388,600   (UGF)   -restores   Y2   of   the                                                                    
     subcommittee's reduction                                                                                                   
                                                                                                                                
     Department of Natural Resources New Language Section:                                                                      
     Page 63                                                                                                                    
     Lines 4-8                                                                                                                  
     Limits the replacement of federal  funding with UGF for                                                                    
     declining federal grants for  the Hot Shot firefighting                                                                    
     crews                                                                                                                      
                                                                                                                                
     University of Alaska:                                                                                                      
     New Language Section                                                                                                       
     Page 63                                                                                                                    
     Lines 19-22                                                                                                                
     $12,500,000  -Contingent  Appropriation -this  language                                                                    
     only takes  effect if the  existing power plant  at the                                                                    
     Fairbanks Campus  utilizes diesel  as its  primary fuel                                                                    
     source for 60 consecutive days                                                                                             
                                                                                                                                
     Office of the Governor:                                                                                                    
     Statewide Fuel Trigger                                                                                                     
     Page 65                                                                                                                    
     Lines 15-16                                                                                                                
     This  amends  the  University  of  Alaska's  allocation                                                                    
     formula  from 10  percent of  the total  plus or  minus                                                                    
     three percent to 15 percent  of the total plus or minus                                                                    
     five  percent. This  change reflects  recent allocation                                                                    
     disbursement within the fuel trigger formula.                                                                              
                                                                                                                                
     Agency-Wide   Technical   Additions  to   the   Numbers                                                                    
     Section:                                                                                                                   
     In-State Natural Gas Pipeline Fund                                                                                         
     Technical  Legislative  Finance   fund  code  amendment                                                                    
     designed   to   meet    accounting   requirements   for                                                                    
     separation   of   the    Alaska   Gasline   Development                                                                    
     Corporation budget  from money spent by  other agencies                                                                    
     at the request of AGDC.                                                                                                    
                                                                                                                                
9:27:57 AM                                                                                                                    
                                                                                                                                
                    Changes incorporated into                                                                               
     Senate CS for CS for House Bill 267 (FIN) 28-GH2673\R:                                                                 
                                                                                                                                
     Health & Social Services:                                                                                                  
     Behavioral Health                                                                                                          
     Services to the Seriously Mentally III                                                                                     
     Page 3 Line 27                                                                                                             
     Increase $75,000 UGF -replaces MHTAAR funding with UGF                                                                     
     Health & Social Services:                                                                                                  
     Behavioral Health                                                                                                          
     Suicide Prevention Council                                                                                                 
     Page 4                                                                                                                     
     Line 21 Increase $60,000 -provides additional funds                                                                        
     for the suicide prevention program needs                                                                                   
                                                                                                                                
     Health & Social Services:                                                                                                  
     Senior Disability Services Senior Community Based                                                                          
     Grants Page 5                                                                                                              
     Lines 28 and 33                                                                                                            
     Increase $200,000 UGF -provides grant funding for the                                                                      
     Aging and Disability Resource Center                                                                                       
                                                                                                                                
     Revenue:                                                                                                                   
     Alaska Mental Health Trust Authority                                                                                       
     Mental Health Trust Operations                                                                                             
     Page 7                                                                                                                     
     Lines 15-16                                                                                                                
     Increase $500,000 -provides funding for a Fetal                                                                            
     Alcohol Spectrum Disorders Media Campaign                                                                                  
                                                                                                                                
9:28:51 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:33:12 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:33:26 AM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer pointed  out to  the committee  that the  CS                                                                    
reduced the  tourism marketing money by  $800,000, but noted                                                                    
that the money for  the Alaska Seafood Marketing Institute's                                                                    
marketing program  was increased on  page 2 of the  bill; he                                                                    
assumed that this change put the two on equal footing.                                                                          
                                                                                                                                
Co-Chair Kelly  replied that in  the spirit of  balance both                                                                    
programs  had been  reduced the  same amount.  Mr. Armstrong                                                                    
added that  both programs  had taken  a 5  percent reduction                                                                    
within the CS.                                                                                                                  
                                                                                                                                
9:34:07 AM                                                                                                                    
                                                                                                                                
Co-Chair  Kelly  WITHDDREW  his OBJECTION.  There  being  NO                                                                    
further OBJECTION, Work  Draft 28-GH2671\E (Wallace 3/26/14)                                                                    
and WORK  DRAFT 28-GH2673\R  (Wallace 3/26/14)  were ADOPTED                                                                    
as a working documents for HB 266 and HB 267.                                                                                   
                                                                                                                                
Co-Chair  Kelly noted  that amendments  to the  CS would  be                                                                    
taken up the following day.                                                                                                     
                                                                                                                                
Mr. Armstrong stated  that there would be  an amendment that                                                                    
dealt with the 4 contracts  that had been settled, which was                                                                    
not contained within the current CS.                                                                                            
                                                                                                                                
9:35:14 AM                                                                                                                    
                                                                                                                                
Mr.  Armstrong expressed  appreciation to  Amanda Ryder  and                                                                    
David Teal for their help on the two budget bills.                                                                              
                                                                                                                                
9:35:54 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
10:09:21 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Kelly  announced an amendment by  Senators Hoffmann                                                                    
Olson and  Bishop. Co-Chair Kelly  requested to be  added as                                                                    
sponsors to Amendment 1.                                                                                                        
                                                                                                                                
10:09:58 AM                                                                                                                   
                                                                                                                                
Senator Hoffman MOVED to ADOPT Amendment 1:                                                                                     
                                                                                                                                
     OFFERED IN: The Senate Finance Committee                                                                                   
     TO: HB 266 / HB 267                                                                                                        
     OFFERED BY:  Senator Hoffman, Senator Bishop, Senator                                                                      
     Olson                                                                                                                      
                                                                                                                                
     DEPARTMENT: Fund Capitalization                                                                                            
     APPROPRIATION: Fund Capitalization (no approps out)                                                                        
     ALLOCATION: Community Revenue Sharing Fund                                                                               
                                                                                                                                
     AMEND LANGUAGE SECTION 25(b) AS FOLLOWS:                                                                                   
                                                                                                                                
     Sec. 25(b):                                                                                                                
     (b)  An  amount equal  to  20  percent of  the  revenue                                                                    
     collected   under  AS   43.20.030(c),  not   to  exceed                                                                    
     $53,000,000  [50,000,000],  is  appropriated  from  the                                                                  
     general fund to the community revenue sharing fund (AS                                                                     
     29.60.850).                                                                                                                
                                                                                                                                
     EXPLANATION: This amendment adds  $3 million UGF to the                                                                    
     Community  Revenue Sharing  Fund (from  $50 million  to                                                                    
     $53 million).  This amendment is  $3 million  above the                                                                    
     Senate's  budget and  $7 million  below the  Governor's                                                                    
     request.                                                                                                                   
                                                                                                                                
10:10:07 AM                                                                                                                   
                                                                                                                                
Co-Chair Meyer OBJECTED for the purpose of discussion.                                                                          
                                                                                                                                
Senator Hoffman  explained that the amendment  increased the                                                                    
revenue sharing by  $3 million. The original  request by the                                                                    
governor  had been  for $60  million,  the subcommittee  had                                                                    
recommended a  funding level of  $50 million;  the amendment                                                                    
would  add $3  million and  would  result in  a number  that                                                                    
would be $7 million below the governor's budget.                                                                                
                                                                                                                                
10:10:37 AM                                                                                                                   
                                                                                                                                
Mr.  Armstrong explained  that the  reduction in  2014 would                                                                    
have no effect on FY15 revenue  shares. He said that the $53                                                                    
million would take  effect in the next  cycle; $57.6 million                                                                    
would be distributed  in FY16, $56.1 in FY17,  $55.1 in FY18                                                                    
and $54.4 in FY19.                                                                                                              
                                                                                                                                
10:11:29 AM                                                                                                                   
                                                                                                                                
Co-Chair  Kelly  explained  that  the  amendment  considered                                                                    
public  testimony  on  the legislation  regarding  municipal                                                                    
assistance  and the  concern for  life,  health, and  safety                                                                    
issues.                                                                                                                         
                                                                                                                                
10:12:04 AM                                                                                                                   
                                                                                                                                
Co-Chair  Meyer  WHITHDREW  his OBJECTION.  There  being  NO                                                                    
further OBJECTION, Amendment 1 was ADOPTED.                                                                                     
                                                                                                                                
CSHB 266(FIN)  was HEARD and  HELD in committee  for further                                                                    
consideration.                                                                                                                  
                                                                                                                                
CSHB 267(FIN)  was HEARD and  HELD in committee  for further                                                                    
consideration.                                                                                                                  
                                                                                                                                
10:12:21 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:14:31 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Kelly handed the gavel over to Co-Chair Meyer.                                                                         
                                                                                                                                
SENATE BILL NO. 195                                                                                                           
                                                                                                                                
     "An  Act relating  to the  membership and  authority of                                                                    
     the  Alaska  Commission   on  Postsecondary  Education;                                                                    
     relating  to  the   Alaska  Student  Loan  Corporation;                                                                    
     relating  to  teacher   education  loans;  relating  to                                                                    
     interest   on   and  consolidation   of   postsecondary                                                                    
     education  loans;   relating  to   Alaska  supplemental                                                                    
     education  loans;  relating to  AlaskAdvantage  grants;                                                                    
     relating to  the Alaska family education  loan program;                                                                    
     relating  to  postsecondary  educational  institutions;                                                                    
     and providing for an effective date."                                                                                      
                                                                                                                                
10:15:42 AM                                                                                                                   
                                                                                                                                
DIANE  BARRANS,  EXECUTIVE  DIRECTOR, ALASKA  COMMISSION  ON                                                                    
POSTSECONDARY EDUCATION,  DEPARTMENT OF EDUCATION  AND EARLY                                                                    
DEVELOPMENT,  AND  EXECUTIVE  OFFICER, ALASKA  STUDENT  LOAN                                                                    
CORPORATION, DEPARTMENT OF  EDUCATION AND EARLY DEVELOPMENT,                                                                    
expressed appreciation for the  legislation. She opined that                                                                    
it had been  two decades since a substantive  review of loan                                                                    
limits and  the policies  that guided the  state's financial                                                                    
aid administration.                                                                                                             
                                                                                                                                
10:16:21 AM                                                                                                                   
                                                                                                                                
Senator  Dunleavy queried  that  language in  the bill  that                                                                    
stated that  a person representing private  higher education                                                                    
had to be non-profit.                                                                                                           
                                                                                                                                
Ms. Barrans  replied that the  membership of  the commission                                                                    
was  comprised of  representative from  both the  for-profit                                                                    
and non-profit  sectors. She said that  the language allowed                                                                    
the governor the latitude to  choose any of the institutions                                                                    
in the sector, rather than being  limited to a member of the                                                                    
board of trustees.                                                                                                              
                                                                                                                                
10:17:31 AM                                                                                                                   
                                                                                                                                
Senator Dunleavy wondered  if there was a  seat reserved for                                                                    
for-profit educational entities.                                                                                                
                                                                                                                                
Ms. Barrans replied in the affirmative.                                                                                         
                                                                                                                                
10:17:38 AM                                                                                                                   
                                                                                                                                
Senator  Dunleavy  inquired  if  there  was  a  practice  of                                                                    
loaning   more   willingly   for   certain   categories   of                                                                    
educational entities.                                                                                                           
                                                                                                                                
Ms. Barrans  responded that  that there  was not  an express                                                                    
policy relative to  the question. She said  that loan limits                                                                    
were    divided    between   collegiate    and    vocational                                                                    
institutions,    without   speaking    to   whether    those                                                                    
institutions  were non-profit  or for-profit.  She explained                                                                    
that rating agencies requested a  break out of the portfolio                                                                    
of lenders who financed their  loans in the financial market                                                                    
in order  to determine, by educational  sector, what portion                                                                    
of  the loans  when  to one  or the  other.  If a  portfolio                                                                    
reflected  a  high  proportion of  proprietary  lending,  it                                                                    
could  result in  higher overcollateralization  requirements                                                                    
because  of the  historical  trend of  higher default  rates                                                                    
associated  with  vocational  schools, particularly  in  the                                                                    
for-profit sector.                                                                                                              
                                                                                                                                
10:20:45 AM                                                                                                                   
                                                                                                                                
Vice-Chair  Fairclough requested  that  Ms. Barrans  discuss                                                                    
the 15  credit per semester  requirement in order  to access                                                                    
funds.                                                                                                                          
                                                                                                                                
Ms. Barrans  said that  the reason the  15 credits  per term                                                                    
had  been proposed,  rather than  30 credits  per year,  was                                                                    
because it  was a  student's enrollment  level on  each term                                                                    
that determined the amount of  loan that they could receive.                                                                    
She  stated  that  there  was   flexibility;  if  a  student                                                                    
enrolled  and met  the full-time  requirement of  12 credits                                                                    
for  fall,  but  then  increased their  credits  to  15  for                                                                    
spring, they  could qualify  for the  higher amount  for the                                                                    
spring term. She noted that  if a student enrolled for full-                                                                    
time of 12  credits, and did not complete the  12 credits in                                                                    
the term, the  student could make up the  credits during the                                                                    
academic year for the purpose  of continuing eligibility for                                                                    
the next year's loan. She  stated that the department worked                                                                    
to  ensure  that  students were  completing  the  number  of                                                                    
credits  that their  loan was  awarded  for without  risking                                                                    
over-awarding students,  which could be  a risk if  the loan                                                                    
were  awarded at  the beginning  of  the year  for a  higher                                                                    
amount based on the student's best intentions.                                                                                  
10:22:53 AM                                                                                                                   
                                                                                                                                
Co-Chair Meyer  queried the default rate  for Alaska student                                                                    
loans.                                                                                                                          
                                                                                                                                
Ms. Barrans replied that the  most recent published rate was                                                                    
slightly higher than  6 percent. She said  that looking back                                                                    
over the  last 10  years, the  rate had been  as low  as 3.8                                                                    
percent, peaking in 2008 and  2009 at about 7.5 percent, but                                                                    
gradually rising as the economy has recovered.                                                                                  
                                                                                                                                
10:23:28 AM                                                                                                                   
                                                                                                                                
Co-Chair  Meyer understood  that Alaska's  default rate  was                                                                    
lower than the national average.                                                                                                
                                                                                                                                
Ms. Barrans  replied that the  default rate for  the federal                                                                    
loan  program  was  substantially higher  than  Alaska.  She                                                                    
noted  that the  federal  loans had  no credit  underwriting                                                                    
criteria;  taxpayers  underwrite   the  credit  for  federal                                                                    
loans.                                                                                                                          
                                                                                                                                
Co-Chair Meyer probed the difference between the two loans.                                                                     
                                                                                                                                
Ms. Barrans  responded that if  the barrower did not  have a                                                                    
credit  score of  at least  680,  they would  need a  credit                                                                    
worthy co-signer.                                                                                                               
                                                                                                                                
10:24:14 AM                                                                                                                   
                                                                                                                                
Co-Chair Meyer discussed the new  fiscal note. He understood                                                                    
that  with  the  purchase  of  new  software  with  $460,000                                                                    
capital  dollars the  state  would see  a  savings of  $82.8                                                                    
thousand.                                                                                                                       
                                                                                                                                
Ms. Barrans replied that the  savings would be approximately                                                                    
$30,000 per  year due to  reduced software  maintenance. She                                                                    
relayed that  the current system  was inadequate  to support                                                                    
the number of student receiving student loans.                                                                                  
                                                                                                                                
10:25:40 AM                                                                                                                   
                                                                                                                                
Co-Chair Meyer inquired if the  expense was reflected in the                                                                    
governor's FY15 capital budget.                                                                                                 
                                                                                                                                
Ms. Barrans replied that it was not.                                                                                            
                                                                                                                                
10:25:51 AM                                                                                                                   
                                                                                                                                
Vice-Chair  Fairclough   offered  that  the   investment  of                                                                    
capital  would save  the state  money  in the  long run  and                                                                    
provided  a smoother  streamlined process  for the  students                                                                    
that were accessing student loans.                                                                                              
                                                                                                                                
10:26:25 AM                                                                                                                   
                                                                                                                                
Co-Chair  Kelly  MOVED  to  REPORT   CSSB  195(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CSSB  195(FIN) was  REPORTED  out of  committee  with a  "do                                                                    
pass" recommendation and with a  new fiscal impact note from                                                                    
the Department of Education and Early Development.                                                                              
                                                                                                                                
10:26:49 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
10:30:05 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 140                                                                                                           
                                                                                                                                
     "An Act creating the Arctic infrastructure development                                                                     
     program and fund in the Alaska Industrial Development                                                                      
     and Export Authority."                                                                                                     
                                                                                                                                
10:30:53 AM                                                                                                                   
                                                                                                                                
SENATOR LESIL  MCGUIRE, introduced  SB 140 and  related that                                                                    
the bill  was a  result of  work that had  been done  by the                                                                    
Alaska   Arctic   Policy   Commission.  She   relayed   some                                                                    
background on the make-up and  duties of the commission. She                                                                    
shared that over  the course of one year  the commission had                                                                    
compiled  a  preliminary report,  which  could  be found  at                                                                    
akarctic.com. The bill would develop  and contrive a funding                                                                    
and   implementation   mechanism    for   constructing   and                                                                    
maintaining Arctic infrastructure  and economic development.                                                                    
She asserted  that the Alaskan  Arctic was one of  the least                                                                    
developed areas of  the state, yet one of the  most open and                                                                    
ready for opportunity. The intent  of the legislation was to                                                                    
develop   the  vision   statements,  policy   statement  and                                                                    
strategic  recommendations  of   the  Alaska  Arctic  Policy                                                                    
Commission. She contended  that Arctic policy was  part of a                                                                    
global discussion  and that the  state was behind  the other                                                                    
seven  Arctic   Nations  when  it  came   to  infrastructure                                                                    
development.  She  relayed  that   Alaska  has  the  longest                                                                    
coastline in  the United  States; Alaska's  Arctic coastline                                                                    
extends from  the Northeastern Canadian border,  west across                                                                    
the Arctic  Ocean, and south  covering western  Alaska, then                                                                    
1500  miles down  to  the Aleutian  Chain.  She stated  that                                                                    
within the entire coastline the  only deep draft port was in                                                                    
Dutch Harbor.  She lamented that the  lack of infrastructure                                                                    
in Unalaska limited any support  for new traffic coming from                                                                    
the  Northwest Passage.  She added  that telecommunications,                                                                    
emergency and  spill response,  search and  rescue, national                                                                    
defense and  other critical needs were  all addressed within                                                                    
the legislation.                                                                                                                
                                                                                                                                
Senator  McGuire proclaimed  that  Alaska  was blessed  with                                                                    
untold  natural resource  wealth  in the  Arctic that  would                                                                    
provide  opportunity  for  future generations,  but  nothing                                                                    
could be done without  sufficient infrastructure. She shared                                                                    
that there was an estimated  $100 billion in private funding                                                                    
that was  waiting to  be invested in  the Arctic,  which was                                                                    
considered  to be  one  of the  last  great economic  global                                                                    
opportunities.                                                                                                                  
                                                                                                                                
                                                                                                                                
10:38:07 AM                                                                                                                   
                                                                                                                                
Senator McGuire provided a further sponsor statement:                                                                           
                                                                                                                                
     Globally, all eyes are on the Arctic. The World                                                                            
     Economic Forum has recently identified Arctic                                                                              
     Infrastructure development as one of the top Four (4)                                                                      
     challenges facing the regions. Alaska's future is in                                                                       
     the Arctic, and in order for Alaskans to capitalize on                                                                     
     the incredible opportunities and overcome the                                                                              
     significant challenges that this region presents, we                                                                       
     must begin to build infrastructure now.                                                                                    
                                                                                                                                
     Aside from a few areas in Norway and the Russian                                                                           
     Federation the Arctic as a whole remains vastly                                                                            
     underserved by transportation, ports, communication,                                                                       
     emergency response, defense and other critical                                                                             
     infrastructure. For further development to occur,                                                                          
     which Alaskans deserve, both public and private                                                                            
     interests must come together to boost the investment                                                                       
     in the Arctic.                                                                                                             
     For these reasons I have introduced Senate Bill 140,                                                                       
     Arctic Infrastructure Development Fund ("AIDF"). The                                                                       
     CS SB 140 (L&C) expands AIDEA's tool bag by extending                                                                      
     the same authority for loans, loan guarantees, bonds                                                                       
     and bond guarantees that it currently utilizes in the                                                                      
     energy sector via the SETS fund (AS 44.88.650- 690) in                                                                     
     order to develop Infrastructure in the Arctic. AIDEA                                                                       
     used SETS to facilitate the financing of the Interior                                                                      
     Energy Project. This tool helps to create the public-                                                                      
     private partnerships that are needed to encourage                                                                          
     large investment in capital intensive infrastructure.                                                                      
     CS SB 140 (L&C) extends AIDEA's existing power to                                                                          
    finance, or facilitate the financing of projects to                                                                         
    the realm of Arctic Infrastructure by granting the                                                                          
     Authority the ability to:                                                                                                  
                                                                                                                                
     1. Insure project obligations and guarantee loans or                                                                       
     bonds for projects.                                                                                                        
     2. Defer principle payments and capitalize interest.                                                                       
     3. Offer financing terms of up to 40 years.                                                                                
     4. Enter into lease agreements, sales-lease-back                                                                           
     agreements, build-operate-transfer agreements and                                                                          
     other agreements to finance Arctic infrastructure                                                                          
     projects.                                                                                                                  
     5. Finance certain aspects of Fisheries in the Arctic.                                                                     
                                                                                                                                
    Many of these powers already provide flexible terms                                                                         
     that can reduce the ultimate cost of energy (via the                                                                       
     SETS program) to consumers, and if it can work in the                                                                      
     energy realm, it can work for infrastructure. However,                                                                     
     CSSB 140 (L&C) also requires legislative approval for                                                                      
     investments that are more than one-third of a                                                                              
     project's capital costs or if a loan guarantee exceeds                                                                     
     $20 Million. By subjecting certain investments to                                                                          
     legislative approval, CSSB 140 (L&C) maintains an                                                                          
     appropriate level of due diligence for projects.                                                                           
     By making financing available we can empower                                                                               
    communities and attract a global pool of investment                                                                         
     that is an alternative to the traditional grant model                                                                      
     that too often underfunds projects and leads to                                                                            
     delays. Relying on credit also ensures that sponsors                                                                       
     have some skin in the game and a stake in the                                                                              
    project's success. Most importantly, we expand the                                                                          
     arena of where Alaskan assets are working in order to                                                                      
     grow our own economy. Currently, many of Alaska's                                                                          
     savings accounts are invested in stocks and bonds that                                                                     
     drive economic activity outside of Alaska. CSSB                                                                            
     140(L&C) suggests instead that some of those savings                                                                       
     be invested here in Alaska through AIDEA, not as blank                                                                     
    checks for development, but as investments for our                                                                          
     future in Arctic Infrastructure.                                                                                           
                                                                                                                                
     For the purposes of this Act, I propose that this                                                                          
     program and fund focus infrastructure development in                                                                       
     the geographical definition of the Arctic as laid out                                                                      
     in Arctic Research and Policy Act (amended 1990). That                                                                     
    definition includes the area of the State of Alaska                                                                         
     north of the Arctic Circle, north and west of the                                                                          
     boundary formed by the Porcupine, Yukon, and Kuskokwim                                                                     
     Rivers, all contiguous seas, including the Arctic                                                                          
     Ocean, and the Beaufort, Bering, and Chukchi Seas, and                                                                     
     the Aleutian chain.                                                                                                        
                                                                                                                                
     With AIDF I am proposing that the State expand AIDEA's                                                                     
     existing authority to finance, or facilitate the                                                                           
     financing of, Arctic Infrastructure.                                                                                       
                                                                                                                                
10:43:01 AM                                                                                                                   
                                                                                                                                
Senator McGuire asserted that it would be irresponsible to                                                                      
ignore   the   obligation   of    the   state   to   develop                                                                    
infrastructure in the Arctic.                                                                                                   
                                                                                                                                
10:43:41 AM                                                                                                                   
                                                                                                                                
Co-Chair Meyer requested that the sponsor list any                                                                              
sideboards that had been written into the bill.                                                                                 
                                                                                                                                
10:44:02 AM                                                                                                                   
                                                                                                                                
JESSE LOGAN, STAFF, SENATOR LESIL MCGUIRE, offered a                                                                            
sectional analysis (copy on file):                                                                                              
                                                                                                                                
     Section 1. AS 44.88.088(a) is amended                                                                                      
                                                                                                                                
          o  This   section  establishes  that   the  Alaska                                                                    
          Industrial   Development   and  Export   Authority                                                                    
          (AIDEA)  shall adopt  a policy  for  payment of  a                                                                    
          dividend    from    the   Arctic    infrastructure                                                                    
          development fund (AS 44.88.810)  to the state each                                                                    
          fiscal year.                                                                                                          
          o The dividend may not be less than 25% nor more                                                                      
          than 50% of the net income of the fund.                                                                               
          o  This   puts  the  AIDF  in-line   with  AIDEA's                                                                    
          sustainable   energy   transmission   and   supply                                                                    
          development fund (SETS) (AS 44.88.660).                                                                               
                                                                                                                                
     Section 2. AS 44.88.088(b)(2) is amended                                                                                   
                                                                                                                                
          o  This  section  defines  "net  income"  for  the                                                                    
          purposes of this chapter.                                                                                             
          o The definition now includes the AIDF.                                                                               
                                                                                                                                
     Section 3. AS 44.88.088(b)(3) is amended                                                                                   
                                                                                                                                

Document Name Date/Time Subjects
CS SB 140 (LC) letter of Support_North Slope Borough.pdf SFIN 3/27/2014 9:00:00 AM
SB 140
CSSB 140 (CL) ARPA_Polar map.pdf SFIN 3/27/2014 9:00:00 AM
SB 140
CSSB 140 (CL) Letter of Support- City of Seward.pdf SFIN 3/27/2014 9:00:00 AM
SB 140
CSSB 140 (CL) Letter of Support- NANA.pdf SFIN 3/27/2014 9:00:00 AM
SB 140
CSSB 140 (CL) Letter of Support- Stephen Trimble.pdf SFIN 3/27/2014 9:00:00 AM
SB 140
CSSB 140 (CL) Sponsor Statement.pdf SFIN 3/27/2014 9:00:00 AM
SB 140
CSSB 140 (LC) Sectional Analysis.pdf SFIN 3/27/2014 9:00:00 AM
SB 140
CSSB 140 (SL) Supporting Document-Planning and Infrastructure Section of AAPC Preliminary Report.pdf SFIN 3/27/2014 9:00:00 AM
SB 140
CSSB 140(LC) Explanation of Changes.pdf SFIN 3/27/2014 9:00:00 AM
SB 140
CSSB166 Sectional Analysis vsn R.pdf SFIN 3/27/2014 9:00:00 AM
SB 166
SB 166 Backup re backgrnd checks.pdf SFIN 3/27/2014 9:00:00 AM
SB 166
SB 166 changes from O to R.pdf SFIN 3/27/2014 9:00:00 AM
SB 166
SB 166 Comments DeLapp.pdf SFIN 3/27/2014 9:00:00 AM
SB 166
SB 166 Nursing 2014 Stats.pdf SFIN 3/27/2014 9:00:00 AM
SB 166
SB 166 Support Evans.pdf SFIN 3/27/2014 9:00:00 AM
SB 166
SB 166 Support Farnstrom.pdf SFIN 3/27/2014 9:00:00 AM
SB 166
SB 166 Support Sanders.pdf SFIN 3/27/2014 9:00:00 AM
SB 166
SB166 Sponsor Statement.pdf SFIN 3/27/2014 9:00:00 AM
SB 166
SB166 Support APNO.pdf SFIN 3/27/2014 9:00:00 AM
SB 166
SB166 Support Gillette.pdf SFIN 3/27/2014 9:00:00 AM
SB 166
HB 199 2014 Sponsor Statement.pdf SFIN 3/27/2014 9:00:00 AM
HB 199
HB 199 ADPS Draft Regulation Change to 13 AAC 96.pdf SFIN 3/27/2014 9:00:00 AM
HB 199
HB 199 Information Hearing BBNA Testimony and Resolutions CEO Ralph Anderson.pdf SFIN 3/27/2014 9:00:00 AM
HB 199
HB 199 Informational Meeting Summary 9 26 2013.pdf SFIN 3/27/2014 9:00:00 AM
HB 199
HB 199 Letters--Informational Hearing--9 26 2013.pdf SFIN 3/27/2014 9:00:00 AM
HB 199
HB 199 Media-Resolutions-Letters.pdf SFIN 3/27/2014 9:00:00 AM
HB 199
SB 140 Letter of Support_ PT Public Policy.pdf SFIN 3/27/2014 9:00:00 AM
SB 140
SB 140 Senate Resources mar 27.pdf SFIN 3/27/2014 9:00:00 AM
SB 140
SB 166 Blank CS for FIN.pdf SFIN 3/27/2014 9:00:00 AM
SB 166
SB 166 SEctional vsn G.pdf SFIN 3/27/2014 9:00:00 AM
SB 166
SB195 work draft version N.pdf SFIN 3/27/2014 9:00:00 AM
SB 195
SB195CS(FIN)-EED-ACPE-3-26-14.pdf SFIN 3/27/2014 9:00:00 AM
SB 195
HB266 Summary of Changes for HB266 version E and HB267 version R.pdf SFIN 3/27/2014 9:00:00 AM
HB 266
HB 267
HB266 work draft version E.pdf SFIN 3/27/2014 9:00:00 AM
HB 266
HB267 work draft version R.pdf SFIN 3/27/2014 9:00:00 AM
HB 267
HB266 Amendment #1 - Hoffman-Olson-Bishop-Kelly.pdf SFIN 3/27/2014 9:00:00 AM
HB 266
SB140 LUKIN_SarahTestimony 3-27-14.pdf SFIN 3/27/2014 9:00:00 AM
SB 140