Legislature(1995 - 1996)

02/07/1995 03:35 PM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
               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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