Legislature(1993 - 1994)
04/20/1993 08:50 AM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
April 20, 1993
8:50 a.m.
TAPES
SFC-93, #64, Side 1 (350-end)
SFC-93, #64, Side 2 (end-000)
SFC-93, #66, Side 1 (000-end)
CALL TO ORDER
Senator Drue Pearce, Co-chair, convened the meeting at
approximately 8:50 a.m.
PRESENT
In addition to Co-chairs Frank and Pearce, Senators Kelly,
Kerttula, Rieger, Sharp and Jacko were present.
ALSO ATTENDING: Commissioner Bruce Campbell, Department of
Transportation & Public Facilities; Ron Lind, Director,
Plans, Programs & Budget, DOT/PF; Gary Bader, Director,
Administrative Services, Department of Education; Bob Poe,
staff for Senator Pearce; Rick Soley, staff for Senator
Frank; Mike Greany, Director, Dave Tonkovich, and Jeff
Hoover, Fiscal Analysts, Legislative Finance Division; and
aides to committee members.
ALSO PARTICIPATING BY TELECONFERENCE: Judith M. Brady,
Executive Director, Alaska Municipal Bond Bank Authority
from Anchorage.
SUMMARY INFORMATION
SB 50 - An Act making appropriations for capital
projects; and providing for an effective
date.
By request of the Senate Finance Committee,
Commissioner Bruce Campbell and Ron Lind,
Director, Plans, Programs & Budgets, DOT/PF
explained the basic federal highway funding
approval process and requirements, and why
some projects appear in the capital budget.
Discussion was held by Senators Kelly,
Pearce, and Kerttula regarding the new ferry
vessel. SB 50 was held in committee.
SB 7 - An Act relating to reimbursement of school
construction debt; and providing for an
effective date.
Bob Poe, staff for Senator Pearce, explained
the sectional analysis for CSSB 7(FIN). CSSB
7(FIN) was ADOPTED and held in committee.
CSSB 60 - An Act making appropriations to the school
(HES) construction grant fund for school projects;
and providing for an effective date.
CSSB 60(FIN) work draft "M" was handed to the
committee but not adopted. The bill was held
in committee.
CSHB 66 - An Act relating to an exemption from and
deferral
(FIN) am of municipal property taxes for certain
primary residences, to property tax
equivalency payments for certain residents,
to the determination of full and true value
of taxable property in a municipality; and
providing for an effective date.
Co-chair Frank MOVED to ADOPT CSCSHB 66(FIN).
Senator Kelly OBJECTED. Discussion followed
regarding the disabled veterans exemption.
The committee requested legal counsel to
speak to the CS. The bill was held in
committee.
CSSB 145 - An Act establishing the position of state
medical
(STA) examiner; and relating to preparation of
death certificates.
CSSB 145(STA) was REPORTED OUT of committee
with a new fiscal note from DH&SS of $89.0,
and zero fiscal notes from Alaska Court
System and the Department of Public Safety.
CSSB 88 - An Act relating to grants to municipalities,
named
(CRA) recipients, and unincorporated communities;
establishing capital project matching grant
programs for municipalities and
unincorporated communities; establishing a
local share requirement for capital project
grants to municipalities, named recipients,
and unincorporated communities; and providing
for an effective date.
CSSB 88(FIN) work draft "J" was ADOPTED for
discussion purposes. The bill was held in
committee.
SENATE BILL NO. 50:
An Act making appropriations for capital projects; and
providing for an effective date.
Co-chair Pearce invited Commissioner Bruce Campbell,
Department of Transportation & Public Facilities to join the
members at the table Mr Campbell.
COMMISSIONER BRUCE CAMPBELL provided the committee with a
handout (copy on file) and said that the department had been
asked to explain how state and federal funds are handled to
complete projects in Alaska. He introduced Ron Lind,
Director, Plans, Programs & Budget, the Department of
Transportation & Public Facilities, to the committee. RON
LIND said that he would provide definitions for some
commonly used terms. He said "apportionment" meant Alaska's
upper limit for a category of work available for federal
funds usually over multiple years. "Authorization" meant
spending approval given by the legislature for use of either
state or federal funds. "Obligation" is a key issue and the
reason authorization is needed by the legislature. An
"obligation" is a federal government commitment to pay based
on eligible work that is performed by DOT/PF. A document is
signed for each project phase with the federal agency in
Juneau. If a project is not committed or signed up for the
year that it is available, those funds are lost. It is a
use it or lose it process. Usually the amount of money
available for obligation is less than the upper limit or
apportionment available. At the end year, if DOT/PF has
obligated or signed documents with the federal government
and Alaska cannot use the obligated dollars available, the
excess goes to other states. To date this has not occurred.
At the same time, if other states have not used all their
funds, Alaska could ask for an increase in its federal
share. In order to take advantage of those extra dollars,
DOT/PF must have work ready to go with authorizations
signed. He said that the rest of the handout explained the
typical funding process and why state authorizations are
needed. He explained that if the legislature limited DOT/PF
by making obligations project specific and if there was any
failure or delay with that specific project, there would be
no assurance that the federal obligation could be used in
that single year and the state could possibly lose federal
funds.
Mr. Lind went on to explain how DOT/PF decides which
projects are put in the capital budget each year, and how
much money is requested for match appropriations. First,
DOT/PF evaluates apportionments available by federal
category for the budget year, estimates the total obligation
(federal commitments available), projects the match
available from other remaining years of appropriation and
decides how much match is required for the budget year. The
six year plan process prioritizes projects to insure that
the funds available are used and allows for increase of
funds or projects that can be substituted if a delay should
occur in a project. All projects must be identified as
already authorized, needing initial authorization or an
increase of authorization.
End SFC-93 #64, Side 1
Begin SFC-93 #64, Side 2
Mr. Lind went on to explain DOT/PF's expenditures over the
past years and the need for additional authorizations in the
next few years. In answer to Senator Rieger, Mr. Lind said
that DOT/PF has enough projects ready to go to construction
(which have already gone through the steps of location,
design, right-of-way) that the state could take advantage of
additional federal funds if available. Mr. Campbell said
that a step-by-step process was definitely followed to
insure federal funding. In answer to Senator Rieger, Mr.
Lind said that he felt the state legislature could add any
project that it desired, but before any actual work could be
done, AMATS would have to amend its plan, decide to adopt
the project into their plan, and make it part of the work.
Outside of the AMATS area, the legislature can add any
federal authorization for any eligible work in a borough or
an unorganized borough realizing that the maximum level of
activity must be governed by location, environment issues,
and design. Another possible delay could be the required
public input process.
In discussing construction of the new marine highway vessel,
Senator Kelly said that DOT/PF is using an $80 million
figure, while a consultant who had come before the committee
and said that the project would total $89 million. He asked
how DOT/PF would acquire the total $89 million before
smaller obligations were approved. Co-chair Pearce said
there were various plans to finance the new ferry vessel,
including the Exxon settlement bill for $5 million. She
said that the House would rather take $7 million out of the
mitigation account this year for the ferry because at the
end of the year, the remainder of the mitigation account
will go into the 470 fund. Mr. Lind said that DOT/PF was
requesting an authorization for $60 million for the ferry.
Discussion was had by Senators Kelly, Kerttula and Co-chair
Pearce regarding the total cost of the new ferry.
Recess 9:20am
Reconvene 9:50am
CS FOR SENATE BILL NO. 145(STA):
An Act establishing the position of state medical
examiner; and relating to preparation of death
certificates.
Co-chair Pearce announced that CSSB 145(STA) was before the
committee with a new fiscal note for the Department of
Health & Social Services in the amount of $89.0.
Senator Rieger MOVED for passage of CSSB 145(STA) from
committee with the accompanying fiscal notes. No objections
being heard, CSSB 145(STA) was REPORTED OUT of committee
with zero fiscal notes for the Department of Public Safety
and the Alaska Court System and a new fiscal note for the
Department of Health & Social Services in the amount of
$89.0. Co-chairs Pearce and Frank, Senators Rieger,
Kerttula and Sharp signed "do pass." Senator Kelly signed
"no recommendation."
SENATE BILL NO. 7:
An Act relating to reimbursement of school construction
debt; and providing for an effective date.
Co-chair Pearce announced that SB 7 was before the committee
and that Judith M. Brady, Executive Director, Alaska
Municipal Bond Bank Authority, was joining the meeting via
teleconference from Anchorage. She also invited Robert Poe,
staff for Senator Pearce, to join the committee at the
table.
Co-chair Frank MOVED for adoption of SB 7(FIN) work draft
"E". Hearing no objections, IT WAS SO ORDERED.
ROBERT POE reviewed the sectional analysis (copy on file)
that outlined SB 7 including grants for school construction,
the review of the grant applications by school districts,
reimbursement of school debt, and the authorization of the
Alaska Municipal Bond Bank to facilitate the reimbursement
of that school debt.
Co-chair Pearce pointed out that Senator Kerttula had
introduced SB 7 as a school construction reimbursement plan,
and although there were some changes to CSSB 7(FIN) she
asked him to speak to it. Senator Kerttula said that years
had been spent on the issue of school reimbursement. He
said that this legislation would provide local decision
making with the state supporting the decision with 70
percent funding. He felt this bill was conservative but
would help service the rural areas.
Senator Kelly spoke in support of SB 7 but had a concern
with the state supporting 70 percent of all swimming pools.
He also had concern with new programs and said he would
prefer that traditional programs be funded. His last
concern was a $50,000 amount which he considered an
operational expenditure and not suitable for this bill. Co-
chair Frank voiced his support regarding Senator Kelly's
remarks and said he would consider amendments to that
affect.
GARY BADER, Director, Administrative Services, Department of
Education, said that there were statutes that limit the size
of a swimming pool or excluded them from programs that can
be funded. He agreed to get back to the committee with more
information.
JUDITH BRADY, via teleconference, said that in the short
time she had to review SB 7, she felt that it would not
cause any problems for the bond bank. The main concern was
that the bank would not lose its rating. She asked if the
municipalities and the bond bank would be doing financing
before a constitutional amendment took effect. When the
committee answered affirmatively, she asked how the bond
would be paid back. Co-chair Frank asked her and the bond
council to look at the bill more extensively. He hoped that
the constitutional amendment would be passed next year but
in the meantime, several school districts would issue debt
and wanted to know if that would cause problems for the bond
bank. Ms. Brady said that the bond bank's financial advisor
would forward his ideas about this issue to the committee.
End SFC-93 #64, Side 2
Begin SFC-93 #66, Side 1
Senator Kerttula said that the state had a 25 year history
of repayment of school construction funds that technically
were not obligations of the state. Senator Sharp asked if
convertible bonds could be used to lock in a percentage
difference once those funds were assured to be dedicated by
the voters. Ms. Brady said that was possible. She
concurred that the state had a good rating and had never had
a default. Discussion was had by Senators Kelly, Frank and
Ms. Brady regarding who was responsible for scrutinizing the
municipality regarding their ability to pay. The Department
of Education would be involved in the grant and design
criteria. Mr. Brady suggested that an amendment be added to
the bill making the community's ability to pay as a criteria
for project approval. Mr. Poe and Ms. Brady agreed to
prepare an amendment to CSSB 7(FIN).
Discussion was had by Senator Rieger, Co-chairs Pearce and
Frank regarding an amendment to determine a threshold for
project costs. Discussion was also had on the words
"alternative education project" on page 3, lines 13 and 14.
Co-chair Pearce asked the committee to bring amendments to
CSSB 7(FIN) as soon as possible. She announced the end of
the teleconference part of the meeting and that CSSB 7(FIN)
would be HELD in committee until April 21, 1993.
Recess 10:45am
Reconvene 10:50am
CS FOR SENATE BILL NO. 60(HES):
An Act making appropriations to the school construction
grant fund for school projects; and providing for an
effective date.
Co-chair Pearce announced that CSSB 60(FIN) work draft "M"
was passed out to the committee. She proposed various
appropriations per district as outlined in the CS. Senator
Kerttula voiced his opinion that highway schools were going
to have to begin to make a contribution to their projects.
CSSB 60(FIN) work draft was HELD in committee until April
21, 1993.
CS FOR HOUSE BILL NO. 66(FIN) am:
An Act relating to an exemption from and deferral of
municipal property taxes for certain primary
residences, to property tax equivalency payments for
certain residents, to the determination of full and
true value of taxable property in a municipality; and
providing for an effective date.
Co-chair Frank outlined the changes in CSHB 66(FIN). He
said that it would grant the authority to the municipalities
to remove this exemption from the municipality taxes. Co-
chair Frank MOVED for adoption of work draft "I" dated April
20, 1993. Senator Kelly OBJECTED. In answer to Senator
Kelly, Co-chair Frank said that the municipality would have
the option of giving disabled veterans an exemption.
Senator Kelly voiced his support of the state funding the
exemption for disabled veterans.
Senator Sharp said that the amount on page 3, line 20,
should read "up to $150,000." RICK SOLEY, staff for Senator
Frank, said that it was his understanding from legal
services that the municipalities would have the ability to
modify the exempted amount by ordinance. Co-chair Frank
asked for a memo from legal services explaining this
section.
Co-chair Pearce announced that CSHB 66(FIN) would be HELD in
committee until April 21, 1993.
Recess 10:59am
Reconvene 11:00am
CS FOR SENATE BILL NO. 88(CRA):
An Act relating to grants to municipalities, named
recipients, and unincorporated communities;
establishing capital project matching grant programs
for municipalities and unincorporated communities;
establishing a local share requirement for capital
project grants to municipalities, named recipients, and
unincorporated communities; and providing for an
effective date.
Co-chair Frank MOVED for adoption of CSSB 88(FIN) work draft
"J". Hearing no objections, IT WAS SO ORDERED.
Mr. Soley outlined the changes made in CSSB 88(FIN). He
said that Senator Taylor's amendments were included in this
version of the bill. He said also that administrative costs
had been limited. Discussion was had by Senator Kerttula,
Co-chair Pearce and Mr. Soley regarding these changes. Mr.
Soley pointed out that there were new fiscal notes for the
Department of Community & Regional Affairs and for the
Department of Administration.
Co-chair Pearce announced that CSSB 88(FIN) work draft "J"
would be HELD in committee until April 21, 1993.
ADJOURNMENT
The meeting was adjourned at approximately 11:15 a.m.
| Document Name | Date/Time | Subjects |
|---|