Legislature(2013 - 2014)HOUSE FINANCE 519
04/11/2014 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB89 | |
| SB137 | |
| SB74 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 74 | TELECONFERENCED | |
| += | HB 316 | TELECONFERENCED | |
| + | HB 116 | TELECONFERENCED | |
| + | SB 137 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 89 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
April 11, 2014
8:33 a.m.
8:33:57 AM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 8:33 a.m.
MEMBERS PRESENT
Representative Alan Austerman, Co-Chair
Representative Bill Stoltze, Co-Chair
Representative Mark Neuman, Vice-Chair
Representative Mia Costello
Representative Bryce Edgmon
Representative Les Gara
Representative David Guttenberg
Representative Lindsey Holmes
Representative Cathy Munoz
Representative Steve Thompson
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Daniel George, Staff, Representative Bill Stoltze; Charlie
Swanton, Director, Division of Sport Fish, Department of
Fish and Game; Ben Mulligan, Special Assistant, Department
of Fish and Game; Brittany Hutchinson, Staff, Senator Click
Bishop; Kris Curtis, Legislative Auditor, Alaska Division
of Legislative Audit; Heather Shattuck, Staff, Senator Pete
Kelly; Patrick Gamble, President, University of Alaska.
SUMMARY
HB 89 AQUATIC INVASIVE SPECIES
HB 89 was HEARD and HELD in committee for further
consideration.
HB 316 WORKERS' COMPENSATION MEDICAL FEES
HB 316 was SCHEDULED but not HEARD.
SB 74 UNIVERSITY OF ALASKA BUILDING FUND
SB 74 was HEARD and HELD in committee for further
consideration.
SB 137 EXTEND SEISMIC HAZARDS SAFETY COMMISSION
SB 137 was REPORTED out of committee with a "do
pass" recommendation and with one previously
published fiscal impact note: FN1 (DNR).
HOUSE BILL NO. 89
"An Act relating to the rapid response to, and control
of, aquatic invasive species and establishing the
aquatic invasive species response fund."
8:34:36 AM
Vice-Chair Neuman MOVED to ADOPT the proposed committee
substitute for HB 89, Work Draft 28-LS0339\P (Bullard,
4/9/14).
Co-Chair Stoltze OBJECTED for the purpose of discussion.
DANIEL GEORGE, STAFF, REPRESENTATIVE BILL STOLTZE,
explained the changes in the CS. He relayed that on Page 2,
lines 26 and 27, the words "shall provide reasonable notice
to affected property owners" had been added to the bill for
the sake of clarity. He furthered that on Page 3, lines 5
and 6, "aquatic evasive species" had been specified to mean
Northern Pike, didemnum tunicate, European green crab,
spartina, crayfish, or another organism introduced to a
marine or freshwater ecosystem to which it is not native
and whose introduction causes, or is likely to cause,
economic or environmental harm or harm to human health.
8:37:01 AM
CHARLIE SWANTON, DIRECTOR, DIVISION OF SPORT FISH,
DEPARTMENT OF FISH AND GAME, testified that the department
was supportive of the changes.
Representative Guttenberg wondered if there was any
location in the state where Northern Pike was native.
Mr. Swanton replied by and large was a general description
on the north side of the Alaska Range.
Representative Guttenberg asked for verification that the
department would not be going after Northern Pike in its
natural habitat. Mr. Swanton replied in the affirmative.
Representative Costello asked if Elodea was considered an
aquatic invasive species under the bill. Mr. Swanton
answered in the affirmative.
Co-Chair Austerman noted that in the past moving the
Geoduck from Southeast Alaska to Kachemak Bay had been
considered by the department as moving an invasive species
and legislation had been required to overcome that label.
He asked if "or another organism" could refer to a similar
situation.
Mr. Swanton answered that the species listed in the CS were
believed by a broad array of people as posing the greatest
risk. He said that the language was not all encompassing.
8:40:08 AM
Co-Chair Austerman hesitated to include the language "or
another organism" in the bill.
Representative Gara took issue with the language pertaining
to economic and environmental harm.
Representative Gara asked whether the invasive species
listed in the original bill had been included in the CS.
Mr. Swanton replied in the affirmative.
Representative Gara wondered if the method of removal of
the species could include non-chemical means.
BEN MULLIGAN, SPECIAL ASSISTANT, DEPARTMENT OF FISH AND
GAME, pointed to page 2, line 21:
In responding under (b) of this section to the
occurrence of freshwater aquatic invasive species, the
department shall respond in a manner determined to
cause the least harm to noninvasive fish populations
that are used for recreational, personal use,
commercial, or subsistence purposes
Mr. Mulligan elaborated that the department would chose an
option that would get rid of the invasive species and cause
the least harm to resident populations.
Vice-Chair Neuman wondered if the bill would look at the
issue of species interfering with the migration patterns of
salmon.
Mr. Swanton replied that it did not speak directly to the
issue. He assured the committee that the department would
pay attention to the issue of range extensions, which were
typical after long periods of geological time.
Vice-Chair Neuman spoke of the pike eradication of
Alexander Creek. He asked whether the bill would expand
similar operations in the northern district where pike
seemed to be expanding further into salmon tributaries.
Mr. Swanton replied that he was unsure whether the
legislation would expand the operation. He said that the
department planned to move forward with a variety of
projects to control of eradicate pike.
8:47:19 AM
Representative Gara wondered whether the department would
opt for non-action if the balance favored non-action.
Mr. Swanton answered that non-action would be on the table
in terms of evaluation before any aggressive action was
taken.
Co-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, it was so ordered.
Co-Chair Stoltze CLOSED public testimony.
8:49:24 AM
AT EASE
8:54:08 AM
RECONVENED
HB 89 was HEARD and HELD in committee for further
consideration.
SENATE BILL NO. 137
"An Act extending the termination date of the Alaska
Seismic Hazards Safety Commission; and providing for
an effective date."
8:55:06 AM
BRITTANY HUTCHINSON, STAFF, SENATOR CLICK BISHOP, read from
a sponsor statement:
Alaska has more earthquakes than any other region in
the U.S. and is one of the most seismically active
areas in the world. In fact, we are approaching the
50th anniversary of the 1964 Good Friday Earthquake,
the most powerful in recorded North American history.
Given the historical record and inevitable potential
of future earthquake activity, Alaska needs the Alaska
Seismic Hazards Safety Commission. The ASHSC is
statutorily designated as an advisory body for seismic
hazard safety mitigation. The ASHSC's overarching
purpose is to analyze and disseminate information,
review predictions and proposed warnings, and to
provide recommendations for seismic safety mitigation.
I would like to see the termination date of the
Alaska Seismic Hazards Safety Commission (ASHSC)
extended from June 30, 2014 to June 30, 2020.
According to the Division of Legislative Audit, the
commission has a demonstrated public need and
therefore the termination date should be extended.
The public need is proven and the public interest is
served in the following ways:
1) The commission assists with seismic hazard
safety training efforts. For example, in 2011
and 2012, the ASHSC coordinated with the
Department of Military and Veterans Affairs to
facilitate training workshops for volunteer first
responders who would respond after a severe
earthquake.
2) They hope to significantly improve school
safety by collaborating with the Department of
Education and Early Development on seismic issues
concerning school construction and renovations.
Seismic hazard mitigation efforts for schools are
an important commission priority, as schools are
critical infrastructure.
3) The ASHSC served the public's interest by
making seismic hazards mitigation recommendations
to the governor, legislature and private entities
through annual reports.
4) The commission helps facilitate
collaboration amongst agencies with related
missions and private sector entities on seismic
hazard mitigation.
KRIS CURTIS, LEGISLATIVE AUDITOR, ALASKA DIVISION OF
LEGISLATIVE AUDIT, relayed that the division had conducted
a sunset review of the commission which was documented in
report form Legislative Audit (copy on file). She said that
an audit of the commission had last been conducted in 2011
and at that time it had been recommended that the
commission be extended for 4 years; the commission had been
extended for 2 years at that time. She related that the
division had concluded that the commission operating in the
public's interest and recommended that the commission be
extended 6 years until the year 2020. She stated that the
audit had identified 4 areas for operational improvements,
which could be found on Page 9 of the report:
The commission should improve prioritization and
accountability within its strategic planning
documents.
Ms. Curtis relayed that the prior sunset audit had found
that the commission lacked a clear strategy for
prioritizing and monitoring its efforts. The commission had
made progress in resolving the finding by developing a
strategic plan that identified objectives and strategies
that correlated with the commissions mandated powers and
duties. She shared that the division recommended the
following additions to help the commission more fully focus
its efforts:
1. Clearly prioritizing tasks - while each of the
tasks in the strategic plan is assigned a priority, 27
of the 29 tasks are listed as "important." The
commission goals and action lists do not contain
priorities;
2. Consistently identifying the person or subcommittee
responsible for task completion; and
3. Associating goals and action lists with the
commission's overarching strategic plan objectives and
consistently identifying a specific outcome.
Ms. Curtis said that by approving accountability and
prioritization the commission could improve their ability
to serve the public. She pointed out to the committee that
on Page 12 of the report the division had found that
recommendations issues by the commission had not
consistently identified the organization responsible for
implementing their recommendation; additionally, not all
recommendations adequately identified the action to be
performed, and at times the commission was uncertain about
where to direct their recommendations. She relayed that the
division recommended that the commission ensure that their
recommendations clearly identified the organization
responsible for implementing an action and the action to be
performed. Additionally, the commission should seek
assistance from the Department of Natural Resources (DNR)
management and identify the appropriate organization
responsible for implementing recommendations. She spoke to
two housekeeping recommendations, one directing the
commission to replace chronically absent commission
members, and another to the commission and the Office of
the Governor to work together to fill vacant positions in a
timely manner.
Vice-Chair Neuman asked how many vacant positions the
commission had and how long, on average, did they remain
vacant.
Ms. Curtis replied that recommendation 3 on Page 11
identified the number of positions and the duration of the
vacancies. She said that it was an 11 member commission and
that vacancies were expected given the number of positions.
She stated that when evaluating how material the vacancies
were the division weighed the effect the absence of those
members had on commission business. She mentioned that
during FY12-FY13 there had been a Department of Military
and Veterans Affairs (DMVA) seat that was vacant for 10
months; there had been a delayed appointment due to unclear
guidance about appointment procedures which lead to a lack
of quorum.
Vice-Chair Neuman felt that there were a lot of members on
the commission. He wondered if one of the recommendations
had been to reduce the number of members.
9:01:17 AM
Ms. Curtis replied in the negative. She believed 6 to 8
years ago the commission's membership had been expanded by
the legislature. She stated that given the past policy
decision the audit did not consider changing the number of
positions.
Co-Chair Stoltze noted that in 2011 the legislature had
spent an inordinate amount of time on the issue. Many
members of the business community had come out in support
of the commission.
Co-Chair Stoltze OPENED public testimony.
Co-Chair Stoltze CLOSED public testimony.
He pointed to the fiscal impact note from the Department of
Natural Resources.
Vice-Chair Neuman MOVED to REPORT SB 137 out of committee
with individual recommendations and the accompanying fiscal
note.
SB 137 was REPORTED out of committee with a "do pass"
recommendation and with one previously published fiscal
impact note: FN1 (DNR).
9:04:00 AM
AT EASE
9:04:48 AM
RECONVENED
SENATE BILL NO. 74
"An Act creating the University of Alaska building
fund for the payment by the University of Alaska of
the costs of use, management, operation, maintenance,
and depreciation of space in buildings; and
authorizing the Board of Regents of the University of
Alaska to designate buildings for which the fund is to
be used."
9:04:59 AM
HEATHER SHATTUCK, STAFF, SENATOR PETE KELLY, testified that
SB 74 would create the University Building Fund (UBF) as a
special account in the general funds. She stated that it
was modeled after the Alaska Public Building Fund, which
had been operated successfully by the Department of
Administration (DOA) since 2000. She shared that currently
there was approximately $1.2 billion in backlog maintenance
for the University's 7 million square feet of facilities.
She said that the University was shifting to long-term
strategic planning to adequately address the ongoing
maintenance issue. She relayed that the UBF would be one
tool to arm the University to do its part in order to get
out from under the billion dollar problem and ensure that
facilities were properly taken care of while bringing down
the deferred maintenance to a responsible and sustainable
level. She related that the fund forced departments to
fully think through every square inch of space that was
actually necessary. She said that with the UBF the
University could begin charging departments for rent,
encourage improved space utilization, and see efficiencies
in operations. She shared that collecting rent from tenants
and departments was an important feature of the fund and
part of the rent could come from federal grants that the
University already received and designated of portion of to
be used for maintenance. She furthered that the concept
would allow the University to first list new buildings and
those under 15 years of age. As older buildings were
rehabbed through renewal and replacement, and deferred
maintenance, they would be added to the fund so that they
did not backslide into the same situation again. She
elaborated that the model of charging for space had been
implemented at several large universities across the United
States and experience had shown that it improved internal
discipline, leading to improved space utilization and
efficiencies in operation. She spoke to the letter from
Legislative Legal clarifying that it did not create a
dedicated fund (copy on file).
9:09:05 AM
PATRICK GAMBLE, PRESIDENT, UNIVERSITY OF ALASKA, testified
that the University sought a paradigm change with regard to
the way to programmatically examine ways to address
deferred maintenance, buildings on the verge of being put
on the deferred maintenance list, and operations and
maintenance costs. He said that when the deferred
maintenance cost got so big that failures occurred,
operations and maintenance money had to be used to fix the
problem. He stated that there were 174 academic buildings
in the system, 8 of which would cost more to fix up than
they were worth and should be torn down. He opined that it
cost a lot to tear down a building but that it cost a lot
more not to. He related that there were 28 building with a
low net asset value, but the function inside the buildings
had a high University value with regard to education and
research. The deferred maintenance backlog for those
buildings was $300 million, the renovation and repair (R&R)
backlog was $100 million. He explained that those were the
main campus buildings, mostly in Fairbanks, and once
building of this kind went into deferred maintenance the
risks involved in working in the buildings increased. He
shared that in the past they University would come before
the legislature each year and attempt to break the work
that needed to be done into categories; only 10 percent of
what was asked over the years had been given to help with
the problem.
9:12:51 AM
Mr. Gamble expressed enthusiastic support for the
legislation. He noted that in a tough budget year, like the
on the legislature currently faced, the seed money to start
the fund would be problematic but had to begin sometime. He
stressed that there were many different sources available
for funding: excess capital appropriations, donations, and
rental income. He suggested that online classes could
lessen the need for academic buildings. He believed that
there would not be much money put into the fund in its
first year and it could take up to 5 years before the fund
was fruitful. He said that each year the legislature would
have the appropriation responsibility, while the University
sought different sources for the fund. He thought a source
could be the Alaska Sovereign Education fund. He shared
that the fund used an education funding source from oil
royalties being diverted into an education account.
9:18:51 AM
Representative Holmes wondered whether there had been
discussions about putting any seed money in the fund in the
present year.
Mr. Gamble replied in the negative.
Representative Holmes asked whether the fund would be
managed for sustainability.
Mr. Gamble replied that it would have an inflation proofing
element to it and that sustainability was a goal.
Representative Holmes she spoke of the Alaska Children's
Trust as a sub-account of the general fund. She thought
that the legislature should encourage private donations but
wondered whether people would donate if the fund was part
of the general fund.
Mr. Gamble answered that a lot of advice would be needed in
order to lock down the actual components of the idea.
9:23:19 AM
Representative Thompson expressed concern that donations to
the building fund could have a negative effect on donations
to other University departments.
Mr. Gamble answered that it was a possibility. He relayed
that many donors were specific with regard to their
donations. He said that unspecified donations would be
considered for the fund.
9:26:27 AM
Co-Chair Austerman assumed that the fund could handle any
component.
Mr. Gamble did not think that using the fund to build new
buildings was part of the plan; operation and rehab,
certainly, but the capital cost of building a new building
would deplete the fund.
Co-Chair Austerman thought that lapses in funding could be
problematic.
Mr. Gamble stressed that the initiation of the fund would
concentrate on newer buildings that had less cost
associated with the maintenance.
Vice-Chair Neuman asked about appropriations from
endowments. He noted that if they were not specifically
mentioned in the appropriations language then they could
not be accepted. He thought that perhaps the language
should be added to the bill.
9:31:07 AM
Mr. Gamble said that they had the ability to track specific
buildings, if a large project came up a few million dollars
short those dollars could be used to fund something else
and would be included as candidates to be put into the fund
for broader use.
Representative Guttenberg wondered whether the result of
Subsection 10 on page 2 would allow the University to
reconfigure space on campus that could be leased out and
allow for maintenance and operation outside of the normal
University budget.
Mr. Gamble answered in the affirmative.
9:34:02 AM
Representative Edgmon asked for the definition of
maintenance versus "depreciation related to space in
covered buildings."
Mr. Gamble explained that the notion of building
depreciation was central to the whole idea of R&R, every
single year a building aged. He said that the definition of
"covered" meant buildings that were specifically occupied
for research or academics. He said that the depreciation,
opposed to a financial depreciation, was related to how
quickly the building was aging. When the buildings were
analyzed and categorized an assessment was made as to how
far it had depreciated from its original construction, this
gave an idea of the net asset value of the building which
was then compared to the R&R required to re-age the
building, and then the depreciation on the started over
from where it had been re-aged.
Co-Chair Stoltze asked if assurances could be given that
deferred maintenance or improvements would not be construed
as allowing new construction.
Mr. Gamble believed that the integrity of the assessment of
deferred maintenance was fundamental to the trust that
dollars were being used as intended. He said that the
poster child for deferred maintenance was the power plant
at the University of Fairbanks, the entire structure had
aged out of its useful service life. He relayed that most
of the deferred maintenance would be smaller issues.
9:38:17 AM
Representative Holmes noted that the account was a sub-
account of the general fund and would not allow the
University to use it as a checking account. She advised
that the legislature maintain control of appropriating the
money from year to year.
Vice-Chair Neuman assumed that the fund would be under the
control of the Board of Regents or the University
president. He wanted to ensure that the university would
have the autonomy to determine where the funds would go. He
did not want individual legislators to have the ability to
designate what the money would be spent on.
Mr. Gamble replied in the affirmative.
Vice-Chair Neuman asked whether the legislature would have
the ability to amend their appropriation.
Mr. Gamble did not believe he would have the authorization
to make the decision.
9:40:54 AM
Representative Holmes believed that the legislature would
had the power to amend the appropriation.
Co-Chair Stoltze noted that there had been some questions
and suggestions related to changes in the legislation. He
relayed that the committee would look at the issues and
hear the bill at a later date.
SB 74 was HEARD and HELD in committee for further
consideration.
HOUSE BILL NO. 316
"An Act relating to workers' compensation fees for
medical treatment and services; relating to workers'
compensation regulations; and providing for an
effective date."
HB 316 was SCHEDULED but not HEARD.
Co-Chair Stoltze discussed housekeeping.
ADJOURNMENT
9:43:50 AM
The meeting was adjourned at 9:43 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 74 - Back up Documents.pdf |
HFIN 4/11/2014 8:30:00 AM |
SB 74 |
| SB 74 - Dedicated Fund Question Legal Memo.pdf |
HFIN 4/11/2014 8:30:00 AM |
SB 74 |
| SB 74 - Full Text.pdf |
HFIN 4/11/2014 8:30:00 AM |
SB 74 |
| SB 74 - University Response to Questions from 4.4.13.pdf |
HFIN 4/11/2014 8:30:00 AM |
SB 74 |
| SB 74-Sponsor Statement.pdf |
HFIN 4/11/2014 8:30:00 AM |
SB 74 |
| Sectional Analysis for SB 74.pdf |
HFIN 4/11/2014 8:30:00 AM |
SB 74 |
| SB 137 Annual Report 2013.pdf |
HFIN 4/11/2014 8:30:00 AM |
SB 137 |
| SB 137 ASHSC Strategic Plan.pdf |
HFIN 4/11/2014 8:30:00 AM |
SB 137 |
| SB 137 Sponsor Statement.docx |
HFIN 4/11/2014 8:30:00 AM |
SB 137 |
| SB 137 Supp Letter RobertScher.pdf |
HFIN 4/11/2014 8:30:00 AM |
SB 137 |
| SB 137 Written Testimony John Aho.pdf |
HFIN 4/11/2014 8:30:00 AM |
SB 137 |
| SB 137 Leg Audit Report.pdf |
HFIN 4/11/2014 8:30:00 AM |
SB 137 |
| HB 89 CS WORKDRAFT FIN P version.pdf |
HFIN 4/11/2014 8:30:00 AM |
HB 89 |