MINUTES  SENATE FINANCE COMMITTEE  April 13, 2000  6:08 PM TAPES SFC-00 # 87, Side A and Side B CALL TO ORDER Co-Chair John Torgerson convened the meeting at approximately 6:08 PM PRESENT Co-Chair John Torgerson, Co-Chair Sean Parnell, Senator Al Adams, Senator Pete Kelly, Senator Randy Phillips and Senator Gary Wilken were present when the meeting convened. Senator Leman, Senator Donley, Senator Green arrived later. Also Attending: REPRESENTATIVE ANDREW HALCRO; KEN BISCHOFF, Director, Division of Administrative Services, Department of Public Safety; ANNALEE MCCONNELL, Director, Office of Management and Budget, Office of the Governor; CONOR SULLIVAN, staff to Representative Cowdery; DARWIN PETERSON, Aide to Co-Chair Torgerson and the Senate Finance Committee; JONATHAN LACK, Staff to Representative Halcro; DENISE HENDERSON, staff to Representative Pete Kott; BILL LAWRENCE, staff to Representative Carl Morgan Attending via Teleconference: From Anchorage: BLAIR MCCUNE, Deputy Director, Public Defenders Agency, Department of Administration; WILEY BROOKS; ERIC DYRUD, Real Estate Broker, Member, Anchorage Board of Realtors Legislative Committee, and Alaska Board of Realtors Legislative Committee; JEROME PAPE; DAVID GARRISON, Associate Broker SUMMARY INFORMATION SB 192-APPPROPRIATIONS; CAPITAL BUDGET/REAPPROPS Amendments were considered and the bill moved from Committee. SB 261-PREVENTION OF NEEDLE & SHARPS INJURIES This bill was scheduled but not heard. HB 180-DRUGS WHERE MINORS ARE PRESENT The Committee heard from the sponsor and the Public Defenders Agency. The bill moved from Committee. HB 272-MUNICIPAL TAX: LOW INCOME HOUSING The Committee heard testimony from the sponsor and members of the public. A committee substitute was considered but not adopted. The bill was held. HB 288-CHILDREN WITNESSING DOMESTIC VIOLENCE The Committee heard from the sponsor. An amendment was adopted and the bill moved from Committee. HB 437-REINSTATEMENT OF NATIVE CORPORATIONS The Committee heard from the sponsor. The bill moved from Committee. SENATE BILL NO. 192 "An Act making and amending capital appropriations and reappropriations and capitalizing funds; and providing for an effective date." The Committee resumed consideration of amendments to the CS SB 192 1-GS2043\H. DEPARTMENT OF ADMINISTRATION ADM #1: This amendment makes the following changes to the committee substitute. Appropriation General Other Allocation Items Funds Funds Page 2, line 26 Insert: Alaska Public Broadcasting Grants (AS 44.21.268) KAKM Construction 300,000 300,000 of Digital Television Facilities (ED 10-25) Explanation: Addition of $300,000 in general funds Co-Chair Parnell moved for adoption and told the Committee that the U.S. Congress and the Federal Communications Commission (FCC) have mandated that all television stations convert to digital television or lose their license to broadcast. He noted that the deadline for public stations is the year 2003, and is 2002 for commercial stations. He stated that KAKM is collaborating on this conversion effort with local commercial stations, thus necessitating the earlier completion. By sharing a single communications tower, he explained, each station would save approximately $1 million. Without this funding, he warned, KAKM cannot partner with the other stations and subsequently incur the additional expense. He pointed out additional savings this amendment provides, as the $300,000 appropriation secures $600,000 federal funds, plus another $600,000 from other sources. There was no objection and the amendment was ADOPTED. DEPARTMENT OF ENVIRONMENTAL CONSERVATION DEC #1: This amendment makes the following changes to the committee substitute. Appropriation General Other Allocation Items Funds Funds Page 9, following line 29 Insert: Municipal Grants (AS37.05.315) City of Fairbanks 405,000 405,000 Parking Garage Page 9, line 30 Delete: Municipal Water, 19,599,650 19,599,650 Sewer & Solid Insert: Municipal Water, 19,194,650 19,194,650 Sewer & Solid Page 10, lines 5-7 Delete: Fairbanks 405,000 Slaterville Storm Water Improvement Phase I (ED 29-34) Explanation: This amendment moves $405,000 of AHFC Dividend funding from the Fairbanks Slatterville Storm Water Improvement Phase I project within the Department of Environmental Conservation to the Department of Administration for payment of a municipal grant to the City of Fairbanks for construction of a parking garage. This amendment was NOT OFFERED. AT EASE 6:11 PM / 6:12 PM DEPARTMENT OF ADMINISTRATION (cont.) ADM #4: This amendment makes the following changes to the committee substitute. Appropriation General Other Allocation Items Funds Funds Page 2, lines 13-16 Delete: Information Service 3,141,000 3,141,000 Fund Equipment Replacement (ED 99) Land Mobile Radio 1,200,000 850,000 350,000 Migration (ED 99) Insert: Information Service 4,341,000 4,341,000 Fund Equipment 3,141,000 Replacement (ED 99) Land Mobile 1,200,000 Radio Migration (ED 99) Explanation: This amendment changes the funding source for $850,000 of the Land Mobile Radio Migration project from general funds to Information Service Funds (ISF). The Department of Administration, Information Technology Group (ITG) staffs and manages a large part of the technology and communications activity for all departments. The funding source for ITG's personnel, equipment, etc. comes from "charge-backs" that all departments pay into the ISF, which is a general fund internal service fund (a subfund of the general fund). ITG sets out support charges and depreciation schedules for its personnel and equipment to determine how much each department will pay for the services it receives. Because the departments co-mingle fund sources in their payments for ITG services, the Department of Administration estimates that the ISF may be made up from as much as 60 percent federal money (this is an estimate because there has never been a financial analysis of the fed's contribution.) The Land Mobile Radio Migration request comes from the Department of Administration, the same department that manages the ISF. The department agrees with the sponsor that the radio project qualifies as a type of service that the ISF could pay for under the statutes. Funding sources by project: Equipment Replacement $3,141,000 ISF Land Mobile Radio 850,000 ISF Migration 350,000 Federal Funds Co-Chair Parnell moved for adoption. Co-Chair Torgerson spoke to the funding source changes made in this amendment noting that the federal funding is not jeopardized. Without objection, the amendment was ADOPTED. DEPARTMENT OF MILITARY AND VETERANS AFFAIRS M&VA #1: This amendment makes the following changes to the committee substitute. Appropriation General Other Allocation Items Funds Funds Page 14, following line 29 Insert: Grants to Named Recipients (AS.37.05.316) Anchorage Economic 200,000 200,000 Development Corporation: Feasibility study for a Department of Defense Global Logistics /Forward Mobility Hub in Anchorage (ED 10-25) Explanation: This amendment provides for an independent consultant's analysis of the feasibility of establishing a military logistics center in Anchorage. This amendment was NOT OFFERED to defer to M&VA #3. M&VA #2: This amendment makes the following changes to the committee substitute. Appropriation General Other Allocation Items Funds Funds Page 14, following line 29 Insert: Grants to Named Recipients (AS.37.05.316) Military Global 200,000 200,000 Logistics/Forward Mobility Hub Economic Development Opportunity Study (ED 10-25) This amendment was NOT OFFERED to defer to M&VA #3. M&VA #3: This amendment makes the following changes to the committee substitute. Appropriation General Other Allocation Items Funds Funds Page 14, following line 29 Insert: Grants to Named Recipients (AS.37.05.316) Anchorage Economic 150,000 150,000 Development Corporation: Feasibility study for a Department of Defense Global Logistics /Forward Mobility Hub in Anchorage (ED 10-25) Insert a new bill section to read: Sec.__. AIR SHOW. The sum of $10,000 is appropriated from the general fund to the Department of Military and Veterans Affairs for payment as a grant under AS 37.05.316 to the Air Force Association for fuel at the Elmendorf Air Force Base in June, 2000, for the 80th anniversary of the Third Wing. Explanation: This amendment provides for an independent consultant's analysis of the feasibility of establishing a military logistics center in Anchorage and grants to the Air Force Association funds to pay fuel costs for the air show at the Elmendorf Air Force Base in June 2000. Senator Adams moved for adoption on behalf of Senator Leman. Co-Chair Torgerson spoke to the amendment, listing the amounts appropriated to the two items. Senator Phillips objected. A roll call was taken on the motion. IN FAVOR: Senator Wilken, Senator P. Kelly, Senator Donley, Senator Leman, Senator Adams, Co-Chair Parnell and Co-Chair Torgerson OPPOSED: Senator Phillips ABSENT: Senator Green The motion PASSED (7-1-1) The amendment was ADOPTED. DEPARTMENT OF PUBLIC SAFETY DPS #2: This amendment makes the following changes to the committee substitute. Appropriation General Other Allocation Items Funds Funds Page 16, line 20 Delete: Aircraft & Vessel 838,780 838,780 Repair & Maintenance (ED 99) Insert: Aircraft & Vessel 1,121,600 1,121,600 Repair & Maintenance (ED 99) Senator Adams spoke to the importance of funding for these deferred maintenance needs and moved for adoption. Without objection, Senator Adams WITHDREW his motion and the amendment was NOT OFFERED to defer to DPS #3. DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES DOT #3: This amendment makes the following changes to the committee substitute. Appropriation General Other Allocation Items Funds Funds Page 25, line 3 Delete: Anchorage 34,305,265 2,646,265 31,659,000 Metropolitan Area Transportation Study Insert: Anchorage 40,005,265 3,159,265 36,846,000 Metropolitan Area Transportation Study Page 25, following line 6 Insert: Anchorage: 5,700,000 C Street Construction- Phase #3 Explanation: Includes funding for the construction of C Street Phase 3, which was deleted in the Governor's amendment to SB 192. Senator Donley noted this amendment would be NOT OFFERED due to action taken on DOT #2 at the previous hearing. DOT #4: This amendment makes the following changes to the committee substitute. Appropriation General Other Allocation Items Funds Funds Page 18, following line 26 Insert: Anchorage: Willow 110,000 110,000 Crest Elementary School Pedestrian Overpass Improvements Explanation: Includes design funding to improve access to existing pedestrian overpass in compliance with ADA requirements. Senator Donley moved for adoption. Without debate or objection the amendment was ADOPTED. LANGUAGE SECTION LANG #3: This amendment makes the following changes to the committee substitute. Page 60, following line 5 Insert a new bill section to read: Sec. 12. AIR SHOW. The sum of $10,000 is appropriated from the general fund to the Department of Military and Veterans Affairs for payment as a grant under AS 37.05.316 to the Air Force Association for fuel for an air show at the Elmendorf Air Force Base in June 2000, for the 80th anniversary of the Third Wing. The amendment also provides an immediate effective date for the new bill section. This amendment was NOT OFFERED. AT EASE 6:18 PM / 6:19 PM MUNICIPAL / UNINCORPORATED MUNICIPALITIES GRANTS MUNI & UNICORP #1: This amendment makes the following changes to the committee substitute. Appropriation General Other Allocation Items Funds Funds Page 39, lines 24-26 Delete: Aleknagik Foxville 25,019 25,019 Roadway Extension & Seaplane Base (ED 39) Page 39, line 27 Delete: Aleknagik North Shore 25,369 25,369 Sludge Lagoon & Landfill Relocation & Road (ED 39) Insert: Aleknagik North Shore 25,019 25,019 Sludge Lagoon & Landfill Relocation & Road (ED 39) Page 43, line 9 Delete: Fairbanks North Star 126,817 126,817 Borough Animal Shelter - Remodel & Expansion of Kennels (ED 29-34) Insert: Fairbanks North Star 125,982 125,982 Borough Animal Shelter - Remodel & Expansion of Kennels (ED 29-34) Page 49, following line 21 Insert: Scammon Bay Sewage 26,738 26,738 Lines & Manhole Repairs Page 50, following line 21 Insert: Teller Cable TV 25,000 25,000 Buyout, Phase II/ Expansion Page 59, following line 28 Insert: Upper Kalskag 25,000 25,000 Community Restoration & Graveyard Restoration Page 50, following line 32 Insert: Wasilla Iditapark 107,487 107,487 Site Improvements & Utilities Page 51, following line 16 Insert: Beaver Community 25,000 25,000 Restoration & Graveyard Restoration Senator Adams moved for adoption and explained the amendment makes technical language and dollar amount changes to the committee substitute. Co-Chair Torgerson explained the reason this amendment was not taken up during the first hearing was to first verify the information with the Division of Legislative Finance. He stated that this practice is standard in the budget process. He expressed that he had no objection to the amendment. Senator P. Kelly asked the effect of this amendment on general fund. Co-Chair Torgerson responded the impact is "net zero". The amendment was ADOPTED without objection. DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES (cont.) DOT #7: This amendment adds $764,500 general funds and $7,645,000 federal receipts to the Capital Transportation Projects (CTP) BRU and allocated to the following components. Akiachak Sanitation Road Resurfacing $1,510,000 Bethel: Chief Eddie Hoffman Hwy 2,010,000 Separated Pathway Bethel: Tundra Ridge Rd. Improvements 775,000 Kotzebue: Ted Stevens Way Reconstruction 3,350,000 Senator Adams stated that this amendment would be NOT OFFERED due to action taken on DOT #2 at the previous hearing. DEPARTMENT OF COMMUNITY AND ECONOMIC DEVELOPMENT C&ED #4: This amendment makes the following changes to the committee substitute. Appropriation General Other Allocation Items Funds Funds Page 3, line 16 Delete: State Historic 50,000 50,000 Preservation Office (ED 99) Page 3, following line 16 Insert: Grants to Named Recipients State Historic 50,000 50,000 Preservation Office (ED 99) Explanation: Moves a named grant for the State Historic Preservation Office from the Department of Community and Economic Development to the Department of Natural Resources. No funding changes. Co-Chair Parnell moved for adoption. Co-Chair Torgerson explained this amendment has a negligible effect on the general fund because the same amount of funds is transferred from one department to another. Senator Phillips asked if this were an operating or capital expense. Co-Chair Torgerson responded that this is a capital budget item. He explained that this is money for the films and pictures that are in the historical preservation office that need preservation. There was no objection and the amendment was ADOPTED. C&ED #5: This amendment makes the following changes to the committee substitute. Appropriation General Other Allocation Items Funds Funds Page 3, line 9 Delete: U.S. Forest Service 200,000 200,000 Mini-Grants Insert: U.S. Forest Service 700,000 700,000 Mini-Grants Explanation: The Department of Community and Economic Development recently received notification that an additional $500,000 in federal funding has been authorized by the Denali Commission for this program. There are no match requirements. The objective of this grant program is to strengthen rural communities by helping capitalize on their potential to diversify and expand their economies through the use of natural resources and by developing new economic activity in non-forest related industries. For the past several years the department has received $200,000 from the USDA to address the long-term vitality of rural areas and focuses on enhancing the overall quality of rural life primarily through natural resource based solutions. This additional authorization will bring the mini-grant program to $700,000 in federal receipts. Senator Adams moved for adoption. Co-Chair Torgerson objected for an explanation. Senator Adams read the explanation statement. Co-Chair Torgerson pointed out that the funding travels directly from the Denali Commission to the department. Co-Chair Torgerson removed his objection. The amendment was ADOPTED without objection. DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT (cont.) E&ED #2: This amendment makes the following changes to the committee substitute. Appropriation General Other Allocation Items Funds Funds Page 4, following line 19 Insert: Grants to Named Recipients (AS 37.05.316) Alaska Aviation 50,000 50,000 Heritage Museum Explanation: This amendment provides for funding for the operation of the museum and gift shop during the fiscal year ending June 30, 2001. Co-Chair Parnell moved for adoption. Co-Chair Torgerson stated this amendment is a one-time appropriation. Senator Phillips objected. A roll call was taken on the motion. IN FAVOR: Senator Leman, Senator Adams, Senator Wilken, Senator P. Kelly, Senator Green, Senator Donley, Co-Chair Parnell and Co-Chair Torgerson OPPOSED: Senator Phillips The motion PASSED (8-1) The amendment was ADOPTED. LANGUAGE SECTION (cont.) LANG #9: This amendment inserts a new bill section in the committee substitute to read as follows. Sec A. NATIONAL PETROLEUM RESERVE - ALASKA IMPACT GRANT PROGRAM. The amount received by the National Petroleum Reserve - Alaska special revenue fund (AS 37.05.530) under 42 U.S.C. 6508 during the fiscal year ending June 30, 2001, is appropriated to the Department of Community and Economic Development for the fiscal year ending June 30, 2001, for grants under the National Petroleum Reserve - Alaska impact program. Explanation: AS 37.05.530 establishes the National Petroleum Reserve - Alaska (NPRA) special revenue fund and impact grant program. Federal funds through the Bureau of Land Management (BLM) are dispersed to the State under 42 U.S.C. 6508. The Department of Community and Economic Development administers the grant program. Municipalities impacted by NPRA oil and gas development may apply for and be eligible to receive grants to alleviate the impacts. BLM recently held a NPRA lease sale and current estimates are that the State should receive annually approximately $2.0 million for the next ten years. This figure is subject to change, especially if there are additional lease sales held. Senator Adams moved for adoption. He noted this amendment is standard language contained in all budgets. He stated the intent to divide the funds between the permanent fund, the school public trust fund and the Power Cost Equalization (PCE) fund. Co-Chair Torgerson noted this amendment appropriates funds for the following year and is an annual process. There was no objection and the amendment was ADOPTED. LANG #4 as Amended: This amendment makes the following changes to the committee substitute. Insert a new bill section to read: Sec. A. MATANUSKA-SUSITNA BOROUGH AND ALASKA RAILROAD CORPORATION. (a) The unexpended and unobligated balance of the appropriation made by sec. 145(a), ch. 208, SLA 1990, as amended by sec. 55, ch. 100, SLA 1997 (Alaska Railroad Corporation - $9,000,000), is reappropriated (1) one-half to the Department of Community and Economic Development for payment as a grant under AS 37.05.3 15 to the Matanuska-Susitna Borough for economic development in the borough, including port development and development of coal resources within the borough; and (2) one-half to the Alaska Railroad Corporation for the purchase of locomotives, rolling stock, and associated equipment and rail line improvements in the Matanuska-Susitna Borough, to facilitate the development of coal deposits in the Matanuska-Susitna Valley. (b) The unexpended and unobligated balance of the appropriation made by sec. 145(b), ch. 208, SLA 1990, added by sec. 56, ch. 100, SLA 1997, as amended by sec. 40(b), ch. 2, FSSLA 1999 (Alaska Railroad Corporation), is reappropriated (1) one-half to the Department of Community and Economic Development for payment as a grant under AS 37.05.3 15 to the Matanuska-Susitna Borough for economic development in the borough, including port development and development of coal resources within the borough; and (2) one-half to the Alaska Railroad Corporation for the purchase of locomotives, rolling stock, and associated equipment and rail line improvements in the Matanuska-Susitna Borough, to facilitate the development of coal deposits in the Matanuska-Susitna Valley. Sec. B. The appropriations made by sec. A(a)(2) and A(b)(2) of this Act are for capital projects and lapse under AS 37.25.020. [This amendment was amended in a previous hearing and held.] Senator Green moved for adoption. Senator Adams objected. Senator Adams spoke to his objection repeating his earlier argument that the money belongs to the entire state rather than specified communities located along the Railbelt. A roll call was taken on the motion. IN FAVOR: Senator P. Kelly, Senator Green, Senator Phillips, Senator Donley, Senator Leman, Senator Wilken, Co-Chair Parnell and Co-Chair Torgerson OPPOSED: Senator Adams The motion PASSED (8-1) The amended amendment was ADOPTED. Co-Chair Parnell moved to allow the Division of Legal and Research Services and the Division of Legislative Finance to make technical adjustments to the committee substitute as necessary when incorporating the adopted amendments. DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES (cont.) DOT #9: This amendment was adopted in a previous hearing. Senator Donley noted a technical correction to the language of the amendment. "Shop" should read "Site" in the two places it appears in the amendment. The corrected language reads as follows. Page 14, lines 25-29 Delete: It is the intent of the legislature that the department shares the use of the Tudor Road Maintenance Site with the Municipality of Anchorage. Insert: Contingent upon the department entering into a Memorandum of Agreement with the Municipality of Anchorage to share the use of the Tudor Road Maintenance Site, $200,000 is appropriated for the costs related to the transfer of this facility from the Department of Military and Veterans Affairs to the Department of Transportation and Public Facilities. AT EASE 6:30 PM / 6:34 PM DEPARTMENT OF PUBLIC SAFETY (cont.) DPS #3: This amendment makes the following changes to the committee substitute. Appropriation General Other Allocation Items Funds Funds Page 16, line 20 Delete: Aircraft & Vessel 838,780 838,700 Repair & Maintenance (ED 99) Insert: Aircraft & Vessel 1,063,780 1,063,780 Repair & Maintenance (ED 99) Page 16, line 30 Delete: Southeast Emergency 275,000 275,000 50,000 Communications Upgrade (ED 3-4) Insert: Southeast Emergency 50,000 Communications Upgrade (ED 3-4) Senator Adams requested the department speak to this amendment and moved for its adoption. He noted that the Southeast Emergency Communications Upgrade is a new project and that the allocated funds are not enough to fully fund it. Therefore, he said he would rather the money be used for the Aircraft and Vessel Repair and Maintenance component. Co-Chair Torgerson objected. KEN BISCHOFF, Director, Division of Administrative Services, Department of Public Safety, stated that this amendment is similar to DPS #1A, which reduced the appropriations to the communications project. He explained that this amendment transfers the remaining general funds for this project. Senator Donley remembered the balance of the appropriation, after the adoption of DPS #1A was more $200,000. Mr. Bischoff responded that there had been an additional $50,000 in other funds appropriated from the Oil Spill Response Fund. However, he was not comfortable that the vessel and aircraft projects would qualify for those funds. Senator Donley asserted that this amendment does not conform to the changes made under DPS #1A, which left a general fund balance of $171,500 in the communication's project. Senator Adams clarified that this amendment transfers that $171,500. ANNALEE MCCONNELL, Director, Office of Management and Budget, Office of the Governor restated that the appropriation, after the reduction taken in DPS #1A, is not sufficient to undertake the communication's project. Rather than have a seriously underfunded project, she said, it is preferable to use the money to fund the aircraft and vessel repair and maintenance component. Senator Wilken noted that the reduced amount allows for the purchase of the communication's equipment but not enough to pay for the installation. Co-Chair Torgerson maintained his objection. A roll call was taken on the motion. IN FAVOR: Senator Green, Senator Adams and Senator P. Kelly OPPOSED: Senator Phillips, Senator Donley, Senator Leman, Senator Wilken, Co-Chair Parnell and Co-Chair Torgerson The motion FAILED (3-6) The amendment FAILED to be adopted. Co-Chair Parnell offered a motion to report from Committee CS SB 192, 1-GS2043\H, as amended. Co-Chair Torgerson thanked those involved in the process of the FY 01 Capital Budget. There was no objection and the bill was MOVED from Committee. AT EASE 6:45 PM / 7:00 PM COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 180(JUD) "An Act relating to the possession, manufacture, use, display, or delivery of controlled substances while children are present." This was the second hearing for this bill in the Senate Finance Committee. CONOR SULLIVAN, staff to Representative Cowdery, reminded the Committee that this bill prohibits adults from knowingly allowing or encouraging, a minor from entering or remaining in the immediate presence of the manufacture, use, delivery, or display of drugs. He expressed that the intent is to send a strong message that "drugs and kids don't mix." BLAIR MCCUNE, Deputy Director, Public Defenders Agency, Department of Administration, testified via teleconference from Anchorage about his concern that people do not always have much choice over where they live. He gave an example of a spouse who begins using drugs, and the position the other spouse is placed in, which under this legislation, would require immediate relocation to avoid criminal charges. Senator Adams offered a motion to report from Committee CS HB 180 (JUD) with accompanying zero fiscal notes from the Department of Law and the Alaska Court System, accompanying indeterminable fiscal note from the Department of Administration, Public Defender's Agency and new indeterminable fiscal note from the Department of Corrections. Without objection the bill MOVED from Committee. HOUSE BILL NO. 272 "An Act relating to the tax assessment by a home rule or general law municipality of housing that qualifies for the low-income housing credit under the Internal Revenue Code; and providing for an effective date." This was the second hearing for this bill in the Senate Finance Committee. WILEY BROOKS, testified via teleconference from Anchorage about his written remarks in opposition to the bill. He restated earlier oral testimony regarding his disapproval of "special interest legislation." ERIC DYRUD, Real Estate Broker, Member, Anchorage Board of Realtors Legislative Committee, and Alaska Board of Realtors Legislative Committee, testified via teleconference from Anchorage about the uniform opposition to the bill from the organizations he represents. He suggested this legislation would create an unfunded mandate and a revenue reduction to municipalities. He thought this would increase property taxes for other property owners and be unfair to other rental property owners. He talked about the detriment to the real estate… JEROME PAPE testified via teleconference from Anchorage that he thought the bill created favoritism amongst already subsidized programs. He noted that the low-income renter would not be benefited from this. He had been in the business for many years and had never found a shortage of low income housing for good tenants. DAVID GARRISON, Associate Broker, owner of 34 units, testified via teleconference from Anchorage saying that the individuals in these projects know the tax situation going into the business and that to change the structure for them would be unfair to others. He also said that reducing taxes for all rental property owners would not be right either, since everyone should pay for the services they receive. Co-Chair Torgerson noted those present to answer questions. DARWIN PETERSON, Aide to Co-Chair Torgerson and the Senate Finance Committee compared a proposed committee substitute, 1-LS1148\T, to the committee substitute before the Committee, version "I". Section 1(d)(2) - the governing power of a municipality is given the responsibility to determine the full and true value of the property to be included in the low-income housing credit, as opposed to the assessor. The governing body has an unlimited amount of time to make that determination. Section 1(d)(2)(B) - once that determination is made, the assessment of the parcel of property will remain in effect as long as the bond is outstanding. Co-Chair Torgerson further clarified that this bill gives more of a local option. He pointed out that a municipality must take a positive action before this legislation can take effect in their community. Senator Leman asked if there was a maximum time for bonded indebtedness under the federal program. He suggested the Committee might want to limit the time. Mr. Peterson did not know the time requirements for the federal program. Co-Chair Torgerson relayed that the question had been asked previously, and that it was determined there are different time frames for the various programs. He noted that the standard timeframe is ten years. Senator Donley asked if once a local government took action to enact this legislation, if the adopted assessments apply to all property in this category. Mr. Peterson showed how the language in Section 1(d)(2)(A) gives the municipality the ability to apply the assessment on a parcel by parcel basis. REPRESENTATIVE ANDREW HALCRO explained Section 1(d)(2) grandfathers the existing properties already on the tax roles. He stressed that some of the testimony heard was actually incorrect. Tape: SFC - 00 #87, Side B 7:18 PM Representative Halcro continued that these properties were built with the understanding that tax would be accessed at what their deed-restricted rents would be. However, he shared that the new tax assessor in Anchorage began assessing these properties at fair market value. As a result, he said, owners are unable to raise the rent enough to meet the higher property appraisal. Senator Donley asked for clarification of the grandfather clause. Co-Chair Torgerson stated that the process still must be enacted through municipal ordinance and is not automatically grandfathered. Representative Halcro pointed out the bill language stipulating that the action must be taken "on or after" the time assessment, which automatically qualifies properties already constructed. At that time, he said, the municipalities can decide whether or not to include them. Senator Donley thought the language was incomplete if this were the actual intent. As he understood, the assessment would apply to those properties that are submitted after the effective date. Representative Halcro clarified that the governing body has the ability to grandfather. Co-Chair Torgerson stressed again that the assessment requires a positive action and that it was not a mandate. He added that the Anchorage assembly supports this legislation. Representative Halcro noted the Anchorage assembly had passed a resolution in favor of the bill. Co-Chair Torgerson allowed that the language was confusing and that he had needed assistance from the drafters to understand it. Senator Adams understood the language to dictate that any party presently in the program is grandfathered in on the effective date of the bill. He continued that anyone new coming into the program, would require a determination by local option. Senator Donley stressed that the language does not state that, but only addresses those that would qualify on or after the effective date. Co-Chair Torgerson said his intent was to have a local option apply to the legislation. He stated that if the members were confused with the language, he would request the Division of Legal and Research Services redraft the bill to make it more understandable. Senator Wilken asked if once a municipality opted for the assessment exemption program, if it has the ability to change back for new projects. Representative Halcro responded that the municipalities do not have that option because, when these properties are approved for construction of a low-incoming housing tax credit property, the properties are build with the assumption that they will only be taxed according to what rent can be charged. Senator Wilken and Representative Halcro further discussed the matter. Senator Donley stated that the language is confusing and that he did not have the same interpretation regarding existing property. Representative Halcro clarified that the existing low- income properties already are a part of the federal program and that the language in subsection (2) stipulates that those properties in the federal program qualify for the program proposed in the bill. Senator Donley noted the phrase "first qualifies… on or after the effective date" on page 2, lines 6 and 7 of the committee substitute. He emphasized "first" and understood this to mean that previously qualified properties would not be included in this legislation. Co-Chair Torgerson countered the intent of "first qualifies" to mean that before becoming eligible for the assessment exemption, a property must first qualify for the federal low-income housing credit. JONATHAN LACK, Staff to Representative Halcro added that subsection (2) provides that only after a property has obtained a federal low-income housing credit, may a municipality make a determination on whether to grant an assessment exemption. Senator Phillips commented that the bottom line was that the legislature would pass the buck to the local governments to make the decision. He spoke Co-Chair Torgerson ordered the bill HELD in Committee. SENATE COMMITTEE SUBSTITUTE FOR COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 288(JUD) "An Act relating to the creation of an aggravating factor for the commission of domestic violence in the physical presence or hearing of a child." This was the first hearing for this bill in the Senate Finance Committee. DENISE HENDERSON, staff to Representative Pete Kott testified that this bill adds a new section to AS 12.55.18. She noted that presently, committing domestic violence in the presence of a child is not, and cannot be, included as a determining factor in the sentencing of a perpetrator. She stressed that this legislation would protect the special venerability of children and would become a major factor in determining the severity of the crime and the resulting sentence thereof. Amendment #1: This amendment inserts "living" following "offense," on page 1 line 14 and deletes "household" on page 2 line 1 and inserts, "residence of the victim, the residence of the perpetrator, or the residence where the crime involving domestic violence occurred." The amended language reads as follows. (C) specified in AS 11.41 that is a crime involving domestic violence and was committed in the physical presence or hearing of a child under 16 years of age, who was, at the time of the offense, living within the residence of the victim, the residence of the perpetrator, or the residence where the crime involving domestic violence occurred. Senator Phillips moved for adoption on behalf of the bill's sponsor. Co-Chair Torgerson objected for an explanation. Senator Phillips explained that the Senate Judiciary Committee felt that the term "household" is too broad. Senator Phillips offered a motion to report from Committee, SCS CS HB 288 (JUD) as amended with accompanying zero fiscal notes from the Alaska Court System, Department of Corrections, Department of Law, Department of Public Safety and indeterminable fiscal note from the Department of Administration, Public Defender's Agency. There was no objection and the bill was MOVED from Committee. HOUSE BILL NO. 437 "An Act relating to the reinstatement of Native corporations; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. BILL LAWRENCE, staff to Representative Carl Morgan, testified that this legislation provides an opportunity for several dissolved Native village corporations to address viable business matters to become viable entities. He explained that this bill extends, to December 31, 2000, the date that Native village corporations may be reinstated in accordance with state law. Mr. Lawrence shared that the Ohogamiut Traditional Council, whose corporation had been involuntarily dissolved, asked Representative Morgan for assistance in establishing a method that the Council could use in order to file annual business reports. These reports, Mr. Lawrence explained would allow the Council to pay incurred penalties, and resume operations as a viable corporation. Co-Chair Torgerson asked how many times this opportunity has been granted to the corporations. Mr. Lawrence knew of one other time, but did not know the total number of opportunities. Co-Chair Torgerson remembered the exemption granted a few years ago and wanted to know if the Native corporations would actually participate. Mr. Lawrence responded that the Ohogamiut Traditional Council has indicated that they would pay the back taxes owed and penalties, if the opportunity is granted. Co-Chair Torgerson asked what would happen if the council does not use this opportunity. Mr. Lawrence responded that they "would probably wish they had." Co-Chair Torgerson stated that he had seen this opportunity granted three times since he took office. He expressed that he did not oppose the legislation. Senator Leman offered a motion to report from Committee, HB 437 1-LS1564\A with accompanying zero fiscal note from the Department of Community and Economic Development. Without objection the bill MOVED from Committee. ADJOURNED Senator Torgerson adjourned the meeting at 7:41 PM.