Legislature(1995 - 1996)
02/07/1995 03:35 PM Senate STA
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= bill was previously heard/scheduled
SENATE STATE AFFAIRS COMMITTEE
February 7, 1995
3:35 p.m.
MEMBERS PRESENT
Senator Bert Sharp, Chairman
Senator Randy Phillips, Vice-Chairman
Senator Jim Duncan
Senator Dave Donley
MEMBERS ABSENT
Senator Loren Leman
COMMITTEE CALENDAR
SENATE BILL NO. 40
"An Act making appropriations from the Alaska Housing Finance
Corporation revolving fund to the general fund; and providing for
an effective date."
SENATE BILL NO. 1
"An Act relating to state implementation of federal statutes."
CS FOR HOUSE CONCURRENT RESOLUTION NO. 1(FIN)
Creating the Long Range Financial Planning Commission.
PREVIOUS SENATE COMMITTEE ACTION
SB 40 - No previous senate committee action.
SB 1 - No previous senate committee action.
HCR 1 - No previous senate committee action.
WITNESS REGISTER
Randy Welker, Auditor
Legislative Audit Division
P.O. Box 113300, Juneau, AK 99811-3300¶465-3830
POSITION STATEMENT: testified on SB 40
Joe Ambrose, Aide to Senator Taylor
State Capitol, Juneau, Alaska, 99801-1182¶465-3873
POSITION STATEMENT: prime sponsor of SB 1
Bill Miles, Aide To Senator Pearce
State Capitol, Juneau, Alaska, 99801-1182¶465-4993
POSITION STATEMENT: in favor of HCR 1
Jack Fargnoli, Office of Management & Budget
P.O. Box 110001, Juneau, AK 99811-0001¶465-4678
POSITION STATEMENT: in favor of HCR 1
Kevin Ritchie, Alaska Municipal League
217 Second Street, #200, Juneau, AK 99801¶586-1325
POSITION STATEMENT: in favor of HCR 1
ACTION NARRATIVE
SSTA - 2/7/95
SB 40 APPROP: AHFC TO GENERAL FUND
TAPE 95-3, SIDE A
Number 001
CHAIRMAN SHARP calls the Senate State Affairs Committee to order at
3:35 p.m. and brings up SB 40 as the first order of business before
the committee.
Number 025
CHAIRMAN SHARP, the prime sponsor of SB 40, reads the sponsor
statement for the bill.
Number 085
CHAIRMAN SHARP asks Mr. Welker to testify.
Number 090
RANDY WELKER, Legislative Auditor, states the Division of
Legislative Audit performed an audit of AHFC in February, 1994.
One of the concerns that initiated the audit was that when AHFC has
been asked in the past whether there is any excess cash in the
corporation to which the legislature could have access, the
corporation always responds that all assets are tied up, and that
the bond covenants and the restrictions imposed by the bonds
preclude any extraction of cash. Last session the Legislative
Budget & Audit Committee authorized the Division of Legislative
Audit to perform an audit. The focus of the audit was to identify
any and all surplus cash that may be available to the legislature.
The conclusion of the audit was that 535 million dollars could be
extracted over FY 94, 95, and 96 without impairing AHFC's ability
to continue the programs in place at the time. There was some
concern on the part of Legislative Audit and AHFC that the
extraction of surplus cash might affect the bond rating of the
corporation. However, since the extraction of 200 million dollars
last session, there has been no negative impact on the
corporation's bond ratings. One of the bond rating agencies did
put AHFC on an alert, but AHFC's bond rating did not drop.
Number 130
MR. WELKER states the legislature did extract less than the amount
available for extraction last year. So there are excess funds
still available. Legislative Audit is updating last years analysis
at the request of the Budget & Audit Committee. We intend to have
a report at Thursday's Budget & Audit Committee meeting providing
updated numbers.
Number 165
MR. WELKER states that the Legislative Budget & Audit Committee
conducted an oversight hearing on AHFC on Thursday, February 2,
1995. The primary topic of that hearing was the recent 5% mortgage
program. That topic will be continued at this week's Legislative
Budget & Audit Committee hearing on Thursday, February 9, 1995.
Legislative Audit has been asked to research the use of arbitrage
earnings of the corporation. We have also been asked to look at
some aspects of the proposed consolidated office building that AHFC
is in the process of constructing in Anchorage. Thursday's hearing
will deal exclusively with AHFC matters.
Number 185
CHAIRMAN SHARP states that the intent of SB 40 is to keep AHFC in
the forefront. The next referral of SB 40 is to the Senate Finance
Committee. Senator Sharp would just as soon move SB 40 up to the
Finance Committee, so that it would be available for consideration
in that committee.
Number 200
SENATOR RANDY PHILLIPS makes a motion to discharge SB 40 from the
Senate State Affairs Committee with individual recommendations.
Number 202
CHAIRMAN SHARP, hearing no objection, orders SB 40 released from
committee with individual recommendations.
SSTA - 2/7/95
SB 1 REVIEW OF FEDERALLY MANDATED PROGRAMS
SENATOR SHARP brings up SB 1 as the next order of business before
the Senate State Affairs Committee and calls the first witness.
Number 210
JOE AMBROSE, Aide to Senator Taylor, prime sponsor of SB 1, reads
the sponsor's statement. Mr. Ambrose adds that Senator Taylor does
not think the fiscal notes are very believable and thinks they
should be reviewed.
Number 265
SENATOR RANDY PHILLIPS asks Mr. Ambrose if the departments are
supportive of SB 1 and if there is an official position paper from
the Governor's Office.
Number 268
MR. AMBROSE responds there is no position paper from the
administration. Mr. Ambrose confirms that Senator Taylor would
definitely like the Finance Committee to investigate the fiscal
notes.
Number 300
SENATOR RANDY PHILLIPS makes a motion to discharge SB 1 from the
Senate State Affairs Committee with individual recommendations,
with the understanding that the bill will get an additional
referral to the Finance Committee.
Number 301
CHAIRMAN SHARP states he will talk to President Pearce regarding
the additional referral. Hearing no objection, the chairman orders
SB 1 released from committee with individual recommendations.
SSTA - 2/7/95
HCR 1 LONG RANGE FINANCIAL PLANNING COMMISSION
Number 305
SENATOR SHARP brings up HCR 1 as the next order of business before
the Senate State Affairs Committee and calls the first witness.
Number 310
BILL MILES, Aide to Senate President Pearce, prime sponsor of SCR
3, the companion bill to HCR 1, informs the committee that a lot of
work was done by the House Finance Committee on HCR 1. The House
Finance Committee considered any number of majority and minority
amendments and suggestions, and most of the suggestions made by the
Governor's Office. HCR 1 passed the house by a 37-1 vote. The
proposed SCS (senate committee substitute) is identical to the
version passed by the house with one exception.
Number 325
MR. MILES lists the changes made by the house:
1) page 1, line 7, the words "and expenditure" were added;
2) the whereas clause on page 1, line 9 is an entirely new clause;
3) page 1, lines 11 and 12 adds language specifying public
participation;
4) page 1, line 14, adds the language "promote economic stability
by diversifying the state's economy and lessening the
dependence on oil revenues";
5) page 2, line 3, the reference to a ten-year plan was replaced
with a reference to a long-range financial plan;
6) a separate resolve clause was added referring to three, five,
and ten-year plans;
7) page 3 of the proposed SCS (SCS CSHCR 1[STA]), paragraphs 8, 9,
and 10 are new mandates;
8) three deadlines have been added: a March 15, 1995 start-up
deadline, a July 15, 1995 preliminary report deadline, and a
final report deadline of October 1, 1995.
Number 355
MR. MILES informs the committee that Senator Pearce endorses the
changes made by the house, and urges consideration of the committee
substitute.
MR. MILES states the final outstanding issue is the composition of
the commission. Currently, the legislation passed by the House
stipulates that all nine members be appointed jointly by the House
Speaker, the Senate President, and the Governor. Senator Pearce
feels that getting three people to agree on any nine appointees
will be virtually impossible. That is why she suggets in the
senate committee substitute that, of the nine public members, three
members be appointed by the House Speaker, three by the Senate
President, and three by the Governor.
Number 380
SENATOR RANDY PHILLIPS asks what would force the legislature to
implement the suggestions of the commission.
MR. MILES responds there is nothing to force the legislature to
follow the recommendations of the commission.
SENATOR RANDY PHILLIPS states the vast majority of his constituents
are opposed to the concept of a long-range planning commission;
they think it will do no good. They also oppose the funding of
such a panel. They think private groups should pick up the funding
for this. The legislature should already be doing long-range
planning. It would be a good concept if there was something to
compel the legislature to follow the recommendations of the
commission. But it is a non-binding resolution, and one
legislature cannot bind another. Senator Phillips states he will
not impede the forward motion of the resolution from committee, but
he does not plan to vote for it when it reaches the floor of the
Senate.
Number 408
SENATOR DONLEY also thinks it is the job of the legislature and the
governor's office to do long-range fiscal planning.
SENATOR RANDY PHILLIPS thinks HCR 1 will have a difficult time
passing the Senate.
Number 450
MR. MILES states he cannot respond to Senator Phillips' and Senator
Donley's concerns, but he will convey them to Senator Pearce.
Number 456
JACK FARGNOLI, Office of Management & Budget, Governor's Office,
states he is conveying testimony for Pat Pourchot. While the
Governor supports HCR 1, the main concern is that in the proposed
SCS, changing how the nine public members are appointed will alter
the balance of power away from equality.
Number 475
SENATOR RANDY PHILLIPS adds that two years ago, it was difficult to
appoint members to the Legislative Ethics Committee due to a
consensus clause. He thinks a consensus arrangement for appointing
members to a long-range planning commission would cause similar
problems.
Number 480
MR. FARGNOLI responds it was felt that it would be easier to get
unanimity than to deal with the minority issue.
Number 485
SENATOR DONLEY suggests dealing with the problem by changing the
number of public members the governor could appoint.
Number 500
MR. FARGNOLI thinks the administration would be open to any
approach that resulted in an equal balance.
Number 505
KEVIN RITCHIE, Alaska Municipal League, states that state-wide,
long-range financial planning is a priority of the municipal
league. Many municipalities have completed long-range financial
plans and would like to be involved in a state-wide effort. Mr.
Ritchie thinks municipalities could provide technical and
logistical support in creating a state-wide, long-range financial
plan.
Number 515
SENATOR RANDY PHILLIPS asks Mr. Ritchie how local governments
funded their task forces.
MR. RITCHIE replies some municipalities funded their task forces,
while others simply did it internally.
SENATOR RANDY PHILLIPS thinks the legislature and governor should
do it internally.
Number 525
CHAIRMAN SHARP says it is good to include the public, because the
public then learns the ramifications of budget making.
TAPE 95-3, SIDE B
Number 580
SENATOR DONLEY offers an amendment to the proposed committee
substitute for HCR 1.
Amendment #1: page 3, line 3, after "programs", insert "of at least
as much as the current fiscal gap between reoccurring revenues and
current expenditures".
CHAIRMAN SHARP objects to amendment #1.
Number 574
SENATOR DUNCAN thinks it would be good to pass this amendment and
HCR 1, if for no other reason than to show people how difficult it
is to cut the budget.
CHAIRMAN SHARP agrees with Senator Duncan. Balancing the budget is
not going to occur simply by cutting the budget.
Number 555
A vote is called on amendment # 1 to HCR 1.
The amendment is adopted by 3 yeas, 1 nay, 1 absent. Voting for
the amendment are Senators Phillips, Duncan, and Donley. Voting
against the amendment is Chairman Sharp. Senator Leman is not
present.
Number 540
SENATOR DUNCAN offers amendment # 2 to the proposed committee
substitute to HCR 1.
Amendment # 2: page 2, paragraph 1, after the word "appoint" it
will read, "the Speaker of the House of Representatives and the
President of the Senate shall appoint two each, and the Governor
shall appoint five of these members; page 2, paragraphs 2 and 3
shall stipulate that of the Senators and Representatives appointed,
one of each shall be a member of the majority and one shall be a
member of the minority.
CHAIRMAN SHARP objects to amendment # 2.
A vote is called on amendment # 2 to HCR 1.
The amendment fails to be adopted by 2 yeas, 2 nays, and 1 absent.
Voting for the amendment are Senators Duncan and Donley. Voting
against the amendment are Senators Sharp and Phillips. Senator
Leman is not present.
Number 485
SENATOR DUNCAN offers amendment # 3 to the proposed committee
substitute to HCR 1.
Amendment # 3: page 2, paragraph 1, of the nine public members,
five shall be appointed by the Governor, two by the Speaker of the
House, and two by the President of the Senate.
CHAIRMAN SHARP objects to amendment # 3.
A vote is called on amendment # 3 to HCR 1.
The amendment fails to be adopted by 2 yeas, 2 nays, and 1 absent.
Voting for the amendment are Senators Duncan and Donley. Voting
against the amendment are Senators Sharp and Phillips. Senator
Leman is not present.
Number 445
SENATOR DONLEY offers amendment # 4 to the proposed committee
substitute to HCR 1.
Amendment # 4: page 2, paragraphs 1-4: of the public members, two
shall be appointed by the Speaker of the House, two by the
President of the Senate, and three by the Governor. Of the non-
public members, there shall be one Senate majority member, one
Senate minority member, one House majority member, one House
minority member, and two officials from the Executive Branch.
Number 416
CHAIRMAN SHARP notes that the proposed committee substitute has not
yet been adopted.
SENATOR RANDY PHILLIPS makes a motion to adopt the proposed
committee substitute.
Number 412
CHAIRMAN SHARP, hearing no objection, states that SCS CSHCR 1(STA)
has been adopted. The chairman notes that amendment # 1, which has
been adopted applies to the SCS.
Number 407
SENATOR DONLEY repeats amendment # 4 and moves the amendment.
CHAIRMAN SHARP objects to amendment # 4.
A vote is called on amendment # 4 to HCR 1.
The amendment fails to be adopted by 2 yeas, 2 nays, and 1 absent.
Voting for the amendment are Senators Duncan and Donley. Voting
against the amendment are Senators Sharp and Phillips. Senator
Leman is not present.
Number 350
SENATOR DONLEY offers amendment # 5 to HCR 1.
Amendment # 5: page 2, paragraphs 1-4: of the public members, two
shall be appointed by the Speaker of the House, two by the
President of the Senate, and three by the Governor. Of the non-
public members, there shall be one Senate majority member, one
Senate minority member, one House majority member, one House
minority member, and one official from the Executive Branch.
CHAIRMAN SHARP objects to amendment # 5.
A vote is called on amendment # 5 to HCR 1.
The amendment fails to be adopted by 1 yea, 3 nays, and 1 absent.
Voting for the amendment is Senator Donley. Voting against the
amendment are Senators Sharp, Phillips, and Duncan. Senator Leman
is not present.
Number 320
SENATOR DONLEY offers amendment # 6 to HCR 1.
Amendment # 6: page 2, paragraphs 2 and 3, shall specify that there
will be a majority member and a minority member from each house of
the legislature.
Number 313
CHAIRMAN SHARP objects to amendment # 6.
A vote is called on amendment # 6 to HCR 1.
The amendment fails to be adopted by 2 yeas, 2 nays, and 1 absent.
Voting for the amendment are Senators Duncan and Donley. Voting
against the amendment are Senators Sharp and Phillips. Senator
Leman is not present.
Number 243
SENATOR RANDY PHILLIPS makes a motion to discharge HCR 1 from the
Senate State Affairs Committee with individual recommendations.
SENATOR DUNCAN objects to releasing HCR 1 from the State Affairs
Committee.
A vote is called on releasing HCR 1 from committee.
The motion fails, 2 yeas, 2 nays, and 1 absent. Voting in favor of
the motion are Senators Sharp and Phillips. Voting against the
motion are Senators Duncan and Donley. Senator Leman is not
present.
SENATOR DONLEY asks for reconsideration of amendment # 6.
SENATOR RANDY PHILLIPS withdraws his motion to discharge HCR 1 from
the Senate State Affairs Committee.
SENATOR DONLEY moves amendment # 6 for reconsideration.
Amendment # 6 is adopted by a vote of 4 yeas, 1 absent. Voting in
favor of the amendment are Senators Sharp, Phillips, Duncan, and
Donley. Senator Leman is not present.
Number 208
SENATOR RANDY PHILLIPS makes a motion to discharge HCR 1 from the
Senate State Affairs Committee with individual recommendations.
Number 206
CHAIRMAN SHARP, hearing no objection, orders HCR 1 released from
committee with individual recommendations.
Number 199
CHAIRMAN SHARP adjourns the Senate State Affairs Committee meeting
at 4:55 p.m.
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