Legislature(2017 - 2018)SENATE FINANCE 532
05/07/2018 02:00 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB233 | |
| HB212 | |
| SB142 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 142 | TELECONFERENCED | |
| += | HB 212 | TELECONFERENCED | |
| += | HB 233 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
May 7, 2018
3:05 p.m.
3:05:14 PM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 3:05 p.m.
MEMBERS PRESENT
Senator Anna MacKinnon, Co-Chair
Senator Click Bishop, Vice-Chair
Senator Peter Micciche
Senator Donny Olson
Senator Gary Stevens
Senator Natasha von Imhof
MEMBERS ABSENT
Senator Lyman Hoffman, Co-Chair
ALSO PRESENT
Representative Chris Tuck, Sponsor; Ken Alper, Director,
Tax Division, Department of Revenue; Juli Lucky, Staff,
Senator Anna MacKinnon; Jane Pierson, Staff, Representative
Neal Foster; Tim Mearig, Facilities Manager, Department of
Education and Early Development; Laura Cramer, Staff,
Senator Anna MacKinnon.
SUMMARY
SB 142 APPROP: CAPITAL BUDGET
CSSB 142(FIN) was REPORTED out of committee with
a "do pass" recommendation.
CSHB 212(RLS)
REAA & SMALL MUNI SCHOOL DISTRICT FUND
CSHB 212(RLS) was HEARD and HELD in committee for
further consideration.
CSHB 233(FIN)am
EXTEND EDUCATION TAX CREDITS
SCS CSHB 233(FIN) was REPORTED out of committee
with a "do pass" recommendation and with one new
fiscal impact note from the Department of
Revenue.
CS FOR HOUSE BILL NO. 233(FIN) am
"An Act relating to the insurance tax education
credit, the income tax education credit, the oil or
gas producer education credit, the property tax
education credit, the mining business education
credit, the fisheries business education credit, and
the fisheries resource landing tax education credit;
providing for an effective date by repealing the
effective dates of secs. 3, 5, 7, 10, 14, 16, 18, 21,
23, 25, 28, 30, 32, 35, 37, 39, 42, 44, 46, 49, 51,
53, and 55, ch. 92, SLA 2010, sec. 14, ch. 7, FSSLA
2011, secs. 15, 17, 19, 21, 23, and 25, ch. 74, SLA
2012, sec. 49, ch. 14, SLA 2014, secs. 37, 40, 43, and
46, ch. 15, SLA 2014, and secs. 26 and 31, ch. 61, SLA
2014; providing for an effective date by amending the
effective date of secs. 1, 2, and 21, ch. 61, SLA
2014; and providing for an effective date."
3:06:49 PM
Co-Chair MacKinnon asked Vice-Chair Bishop to review the
fiscal note.
Vice-Chair Bishop complied. He reported that some
discussion had ensued about the $50,000 fiscal note for a
regulation package. The fiscal note before the committee
reflected that the $50,000 regulation package was not
included in the bill. The numbers in the outyears of the
fiscal note remained the same. He reiterated there was no
fee for a regulation package associated with the bill.
Co-Chair MacKinnon announced that the bill had originally
been heard as the companion bill SB 116 on March 26, 2018.
The current bill had been heard on April 26, 2018 where a
new committee substitute (CS) had been presented, the
sectional analysis had been reviewed, and public testimony
had been heard and closed. The fiscal notes had been
reviewed again. She asked to hear from the bill sponsor.
REPRESENTATIVE CHRIS TUCK, SPONSOR, detailed that the bill
would extend the education tax credits that had originated
in 1987 to January 1, 2025. He relayed the credits would
expire on December 31, 2018 without the legislation.
Vice-Chair Bishop MOVED to REPORT SCS CSHB 233(FIN) out of
committee with individual recommendations and accompanying
fiscal note. There being NO OBJECTION, it was so ordered.
SCS CSHB 233(FIN) was REPORTED out of committee with a "do
pass" recommendation and with one new fiscal impact note
from the Department of Revenue.
3:08:52 PM
AT EASE
3:11:00 PM
RECONVENED
Co-Chair MacKinnon relayed that the committee had reported
out SCS CSHB 233(FIN).
KEN ALPER, DIRECTOR, TAX DIVISION, DEPARTMENT OF REVENUE,
heard the committee had moved the bill before he had
arrived.
Co-Chair MacKinnon offered Mr. Alper an opportunity to
share anything related to the fiscal note for SCS CSHB
233(FIN).
Mr. Alper discussed that the fiscal note discussed during
the morning meeting had contemplated revenue to cover some
of the Department of Revenue's (DOR) administrative costs.
The department had removed the associated costs from the
fiscal note; the costs would be absorbed by the department.
He supported the bill and believed the education tax credit
was an important program. He added it was merely a matter
of downsizing the program to Alaska's fiscal reality.
Co-Chair MacKinnon apologized that the meeting time had
moved. She understood DOR was following the committee's
activities and was working hard to be available.
Mr. Alper replied the department would be presenting to the
committee the following morning on a different piece of
legislation.
CS FOR HOUSE BILL NO. 212(RLS)
"An Act relating to funding for school construction
and major maintenance; relating to the regional
educational attendance area and small municipal school
district fund; and providing for an effective date."
3:12:46 PM
Co-Chair MacKinnon reported the bill had been heard on
April 23, 2018 when the public hearing had been heard and
closed and the fiscal notes had been reviewed.
Vice-Chair Bishop MOVED to ADOPT the committee substitute
for CSHB 212(RLS), Work Draft 30-LS0741\M (Laffen, 5/4/18).
Co-Chair MacKinnon OBJECTED for discussion.
JULI LUCKY, STAFF, SENATOR ANNA MACKINNON, reviewed the two
changes in the CS. She referenced previous bill hearing
where there had been discussion on the effective date. The
effective date had been changed to immediate in the CS.
Additionally, the previous version of the bill had
specified 20 percent for major maintenance. The new CS
removed the 20 percent specification, but noted on page 1,
lines 10 through 11 that the fund's primary function was to
fund school construction projects.
3:14:09 PM
JANE PIERSON, STAFF, REPRESENTATIVE NEAL FOSTER, discussed
the bill. She explained the bill would allow more major
maintenance in Regional Educational Attendance Area (REAA)
and small municipal school districts. The bill did not add
more money to increase the size of the pie. She detailed
the bill would reallocate how the pie was cut. Currently
the REAA and Small Municipal School District Fund could
only be used for new school construction. The bill would
allow the fund to be used for major maintenance in addition
to new school construction in REAA and small municipal
school district areas, with construction taking precedence.
The bill would help reduce the deterioration of schools,
which would save millions of dollars in the long run. For
example, it was preferable to be proactive and replace a
roof than to be reactive and replace an entire school. The
sponsor had reviewed the CS and was amenable to the
changes.
Co-Chair MacKinnon WITHDREW her OBJECTION. There being NO
further OBJECTION, Work Draft 30-LS0741\M was ADOPTED.
Co-Chair MacKinnon MOVED to ADOPT Amendment 1, 30-LS0741\M
(Laffen, 5/4/18) (copy on file):
Page 1, following line 4:
Insert new bill sections to read:
"* Section 1. AS 14.11.013(a) is amended to read:
(a) With regard to projects for which grants are
requested under AS 14.11.011, the department shall
(1) annually review the six-year plans submitted by
each district under AS 14.11.011(b) and recommend to
the board a revised and updated six-year capital
improvement project grant schedule that serves the
best interests of the state and each district; in
recommending projects for this schedule, the
department shall verify that each proposed project
meets the criteria established under AS 14.11.014(b)
and qualifies as a project required to
(A) avert imminent danger or correct life-threatening
situations;
(B) house students who would otherwise be unhoused;
for purposes of this subparagraph, students are
considered unhoused if the students attend school in
temporary facilities;
(C) protect the structure of existing school
facilities;
(D) correct building code deficiencies that require
major repair or rehabilitation in order for the
facility to continue to be used for the educational
program;
(E) achieve an operating cost savings;
(F) modify or rehabilitate facilities for the purpose
of improving the instructional program;
(G) meet an educational 1 need not specified in (A) -
(F) of this paragraph, identified by the department;
(2) prepare an estimate of the amount of money needed
to finance each project;
(3) provide to the governor, by November 1, and to the
legislature within the first 10 days of each regular
legislative session, a revised and updated six-year
capital improvement project grant schedule, together
with a proposed schedule of appropriations;
(4) encourage each school district to use previously
approved school construction design plans and building
systems if the use will result in cost savings for the
project;
(5) consider the regionally based model school
standards developed under AS 14.11.017(d).
* Sec. 2. AS 14.11.013(b) is amended to read:
(b) In preparing the construction grant schedule, the
department shall establish priorities among projects
for which grants are requested and shall award school
construction grants in the order of priority
established. In establishing priorities the department
shall evaluate at least the following factors, without
establishing an absolute priority for any one factor:
(1) emergency requirements;
(2) priorities assigned by the district to the
projects requested;
(3) new local elementary and secondary programs;
(4) existing regional, community, and school
facilities, and their condition; this paragraph does
not include administrative facilities;
(5) the amount of district operating funds expended
for maintenance; [AND]
(6) other options that would reduce or eliminate the
need for the request;
(7) the district's use of previously approved school
construction design plans and building systems if the
use will result in cost savings for the project; and
(8) consideration of regionally 1 based model school
standards under AS 14.11.017(d).
* Sec. 3. AS 14.11.013(c) is amended to read:
(c) The department may
(1) modify a project request when necessary to achieve
cost-effective school construction;
(2) require that a school construction project be
phased for purposes of planning, design, and
construction; [AND] (3) reject project requests and
omit them from the six-year schedule due to
(A) incomplete information or documentation provided
by the
district;
(B) a determination by the department that existing
facilities can adequately serve the program
requirements, or that alternative projects are in the
best interests of the state;
(C) a determination that the project is not in the
best interest of the state; and
(4) require that a school construction project include
all or part of the regionally based model school
standards developed under AS 14.11.017(d) or reuse
previously approved design plans and building systems
that would result in capital or operating cost savings
for the project.
* Sec. 4. AS 14.11.017 is amended by adding a new
subsection to read:
(d) The department shall develop and periodically
update regionally based model school construction
standards that describe acceptable building systems
and anticipated costs and establish school design
ratios to achieve efficient and cost-effective school
construction. In developing the standards, the
department shall consider the standards and criteria
developed under AS 14.11.014(b)."
Page 1, line 5:
Delete "Section 1"
Insert "Sec. 5"
Renumber the following bill sections accordingly.
Vice-Chair Bishop OBJECTED for discussion.
Co-Chair MacKinnon explained the amendment. She detailed
the legislature had been going through a process for over a
decade looking at schools and how schools were built across
Alaska. The research had been to determine whether there
was a different way the state could do business that would
allow designs to be reused and building components to be
standardized. A study had been done by the department
[Department of Education and Early Development] that
specified the changes would not bring a cost savings unless
multiple schools were being built. There were three schools
on the REAA list in the same district that were all being
built and had developed designs independent of each other
that were costing the state $30 million, $35 million, and
$40 million-plus schools. The amendment established a
guideline - if districts allowed and under the direction of
the department - to organize and try to save the state some
money in design development and building construction. She
relayed a process had been conducted and the review
committee had rejected the process with cost savings. She
asked the department to address the committee.
3:17:26 PM
TIM MEARIG, FACILITIES MANAGER, DEPARTMENT OF EDUCATION AND
EARLY DEVELOPMENT (DEED), relayed the amendment introduced
a couple of provisions not currently in statute. The
amendment allowed the opportunity to develop the criteria
for regionally based model school construction standards in
a new paragraph under AS 14.11.017(d), Section 4. He
believed the opportunity to develop the standards and
describe acceptable building systems to be used in Alaska
schools was positive and would allow the state, districts,
and department to work collaboratively. He detailed the
provision impacted other areas of the bill as the
department analyzed school construction grant applications.
The other provision was based around considering previous
school designs and when they could appropriately be used in
establishing a design for another school. There were some
additional provisions in the amendment that would allow the
department to encourage, measure, and enforce the
consideration of when previous school designs could be used
when designing other schools.
Co-Chair MacKinnon asked whether her staff had been working
with Mr. Mearig on the amendment. Mr. Merrick replied in
the affirmative.
3:19:27 PM
Co-Chair MacKinnon WITHDREW the OBJECTION. There being NO
further OBJECTION, Amendment 1 was ADOPTED.
Co-Chair MacKinnon asked if Ms. Pierson had any comments on
Amendment 1. Ms. Pierson reported that Representative
Foster was amenable to the amendment.
Senator Micciche spoke about the materials components,
construction experience, and transportation of goods
related to school construction. He asked if the items were
something DEED would look at in the future to reduce costs.
Mr. Mearig answered that the provision to develop
regionally based model school standards would help to
identify best practices in the areas mentioned by Senator
Micciche as well, including logistics and systems.
Specifically, the department was looking at standards of
acceptable building systems and associated costs as well as
design ratios that would achieve efficiency. The department
would measure things like the exterior envelope square
footage for the building volume to identify an appropriate
building efficiency. For example, the process would ensure
a building did not end up with 100 corners. Many of the
costs mentioned by Senator Micciche were not necessarily
things that were easy for DEED to develop in standards. He
explained that mobilization and shipping costs would be
difficult for DEED to control. However, the department
understood that the heavier the material, the more
expensive the school would be to construct.
Vice-Chair Bishop appreciated the amendment. He asked if
DEED worked with the Cold Climate Housing Research Center
(CCHRC) at the University of Alaska and whether that work
would be incorporated into actions directed under the
amendment.
Mr. Mearig responded that DEED had not had significant
interaction with CCHRC with regard to commercial building
and schools. He followed CCHRC's work and believed there
was good opportunity for collaboration between the two
entities in regard to actions under the amendment.
Co-Chair MacKinnon suggested that the Alaska Energy
Authority (AEA) may be another natural partner to help with
weatherization of the commercial buildings. She noted that
sometimes there was a substantial amount of glass used in
the buildings. Part of the problem she had with the current
design process was that the architect chose what the
building would look like and sometimes beautiful entrances
were created that were not functionally compatible with the
climate. She hoped the amendment would enable DEED to work
with districts to obtain a beautiful and functional school
design.
Co-Chair MacKinnon communicated the committee did not yet
have the fiscal note for the bill, which she believed would
be around $300,000. She believed the bill would report out
the following day.
CSHB 212(RLS) was HEARD and HELD in committee for further
consideration.
3:24:34 PM
AT EASE
3:25:37 PM
RECONVENED
SENATE BILL NO. 142
"An Act making appropriations, including capital
appropriations, supplemental appropriations,
reappropriations, and other appropriations; making
appropriations to capitalize funds; and providing for
an effective date."
3:26:15 PM
Co-Chair MacKinnon reported the bill had been heard on
April 26, 2018 when the public hearing had been opened and
closed.
Vice-Chair Bishop MOVED to ADOPT the committee substitute
for SB 142, Work Draft 30-GS2565\R (Martin, 5/7/18).
Co-Chair MacKinnon OBJECTED for discussion.
3:26:30 PM
AT EASE
3:27:51 PM
RECONVENED
LAURA CRAMER, STAFF, SENATOR ANNA MACKINNON, highlighted
the changes in the CS. Page 3, line 18 included $2 million
for the Alaska Travel Industry Association for tourism
marketing and development. Page 4, line 31 included $2.5
million for the Wrangell junkyard contaminated site
cleanup. Page 5, line 19 included $300,000 for vessels and
aircraft maintenance, repair, and upgrades for the
Department of Fish and Game (DFG). She detailed originally
the item had been in the bill's language section and due to
incorrect information from DFG the lapsing funds were no
longer available; therefore, the item had been moved to the
numbers section of the bill. Page 7, line 33 through page
8, line 4 included $750,000 for the Department of Natural
Resources for legal and financial due diligence associated
with the AKLNG project. Page 8, lines 29 through 31
included $750,000 for the Department of Revenue for legal
and financial due diligence associated with the AKLNG
project. Page 9, line 23 pertained to the Alaska Housing
Finance Corporation (AHFC) Weatherization Program. She
elaborated the previous bill version had erroneously left
the increment out of the bill's language section; the
numbers had been correct, but the increment had not been
listed in the bill.
Ms. Cramer continued to outline the changes in the CS. She
moved to page 10, line 18 that included other federal
program match for the Department of Transportation and
Public Facilities (DOT). The item had been added to the
numbers section due to a reduction in lapsing funds from
AHFC in the Home Energy Rebate Program. Originally the item
had been located in the language section - a reduction had
caused the change in the numbers section of the current CS.
Page 10, line 20 included an adjustment to the federal aid
highway state match due to some reappropriations that were
no longer available. Page 17, lines 10 through 13 included
$75,000 for community and neighborhood watch programs to be
distributed as grants through the Department of Commerce,
Community and Economic Development (DCCED). Page 17, line
14 included $60,000 for the City of Nenana for the
financial review and analysis of its city financials.
Currently the city was unable to receive some community
assistance due to some issues with its financials; the
increment would enable DCCED to work with Nenana to ensure
financials were in order prior to distributing community
assistance funds.
Ms. Cramer moved to the next change on page 17, lines 20
through 22 included $250,000 for a study for the Health
Care Transformation Project - the next step in the health
care authority feasibility study, which would bring along
patients, providers, and policy makers. Page 17, line 25
included $500,000 for the Hillcrest subdivision clean water
improvement district to help with contaminated water
systems. Page 17, line 28 included $2 million to the
Anchorage Police Department for crime prevention, response,
and equipment. Page 18 included $2 million to the
Department of Public Safety for crime prevention, response,
and equipment. Page 35 included backstop language for DOT
reappropriations for federal aid highway match. The
language had been included in the capital budget the last
year as well. The language designated that general funds
would be used to match federal funds if any project
reappropriation balances fell short.
3:33:12 PM
Co-Chair MacKinnon asked for the page number. Ms. Cramer
replied the change appeared on page 35, lines 10 through
14.
Ms. Cramer continued to address changes in the CS. She
turned to page 36, lines 3 through 19 that included the
reappropriation of funds that had been reappropriated in
the previous year to the greater Lynn Canal area. The
balance of $21.2 million was reappropriated back to the
Juneau Access project. The final change was located on page
37, line 3 through 9, where the remaining balance for the
Friends of the Jesse Lee Home to the City of Seward for
site remediation.
Co-Chair MacKinnon WITHDREW her OBJECTION. There being NO
further OBJECTION, Work Draft 30-GS2565\R was ADOPTED.
3:34:42 PM
Co-Chair MacKinnon shared that it was difficult to be the
committee chair when there was no money for communities
around the state. She had tried to help the limited
requests where possible in the CS. She remarked that the
bill contained no personal discretionary spending. She
reported the budget prioritized public safety and health in
some communities. She noted that the Wrangell [junkyard
contamination cleanup] project was $5 million, not $2.5
million. She explained that if the House added the other
$2.5 million, the project would move forward. She continued
that the budget was funded with Alaska's savings account to
provide for the people of Alaska in broad ways. The budget
went a long way in using the limited funds to create a
budget of over $1 billion in combination with federal and
other funds. She would provide the difference to committee
members and believed it was substantially lower than the
administration's request. She reported there was no joy in
passing a budget that was smaller than the administration's
request, but it reflected the practical fact that the
legislature was having to draw every dollar from savings
accounts; there were some things absent from the budget
that were important to many people.
3:36:41 PM
Vice-Chair Bishop thanked Co-Chair MacKinnon and her staff
for bringing the CS forward. He believed the committee had
been responsive to public testimony; it had done what it
could with the means available.
Senator Micciche agreed with Vice-Chair Bishop's comments.
He thanked Co-Chair MacKinnon and her staff for their hard
work.
Co-Chair MacKinnon thanked her chief of staff, Laura
Cramer. She felt that Ms. Cramer had succinctly and
accurately represented the changes requested in the bill.
She acknowledged there were many things requested by the
committee that were not included in the bill. She
reiterated that the bill did not contain personal
recommendations or discretionary money. The bill reflected
a fairly straight forward and back to the basics budget.
She thanked Legislative Legal Services and the Legislative
Finance Division for their work.
3:39:05 PM
Vice-Chair Bishop remarked that it was a $1 billion budget,
but when accounting for the multiplier effect that went out
through the economy and construction projects, it got to be
a good-sized number.
Co-Chair MacKinnon reported that the budget invested
$148,642,900 in projects throughout Alaska and leveraged
for a total budget of $1,461,960,200. The budget was $265
million less than the governor's request.
Vice-Chair Bishop MOVED to REPORT CSSB 142(FIN) out of
committee with individual recommendations. There being NO
OBJECTION, it was so ordered.
CSSB 142(FIN) was REPORTED out of committee with a "do
pass" recommendation.
3:40:28 PM
AT EASE
3:42:24 PM
RECONVENED
Co-Chair MacKinnon reviewed the schedule for the following
day.
ADJOURNMENT
3:42:58 PM
The meeting was adjourned at 3:42 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 212 SCS FIN work draft version M.pdf |
SFIN 5/7/2018 2:00:00 PM |
HB 212 |
| HB 212 SCS FIN v. M Explanation.pdf |
SFIN 5/7/2018 2:00:00 PM |
HB 212 |