04/06/2009 01:30 PM House FINANCE

HOUSE BILL NO. 161                                                                                                            
     "An  Act  relating to  the  Alaska Mental  Health  Trust                                                                   
     Authority  Subport  Office   Building;  authorizing  the                                                                   
     issuance   of   certificates    of   participation   for                                                                   
     construction of the building  and authorizing the use of                                                                   
     up to $25,000,000 from the  mental health trust fund for                                                                   
     construction  of the building;  approving leases  of all                                                                   
     or   part  of  the   building  by   the  Department   of                                                                   
     Administration; and providing for an effective date."                                                                      
                                                                                                                                
2:21:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CATHY MUNOZ indicated  that the three  fiscal                                                                   
notes  from the  Department  of  Revenue, the  Department  of                                                                   
Administration,  and  the  Department  of  Natural  Resources                                                                   
would be the reviewed for the committee.                                                                                        
                                                                                                                                
REMOND  HENDERSON,  DEPUTY  DIRECTOR,   DIVISION  OF  GENERAL                                                                   
SERVICES, DEPARTMENT OF ADMINISTRATION,  explained the fiscal                                                                   
notes.                                                                                                                          
                                                                                                                                
2:23:21 PM AT EASE                                                                                                            
2:24:14 PM RECONVENED                                                                                                         
                                                                                                                                
Mr. Henderson reported that the  Department of Revenue fiscal                                                                   
note represents  $22 million to  fund 50 percent cost  of the                                                                   
new building.  The  note reflects,  in FY 2010,  the cost  of                                                                   
issuing bonds up to $400,000 and  estimated interest payments                                                                   
of $626,000.  The fiscal  note also  reflects an annual  debt                                                                   
payment  of $1.9  million  beginning in  FY  2011. This  debt                                                                   
payment is based on $22.7 million  repaid over a period of 20                                                                   
years  at 5.5  percent interest.  The  Department of  Natural                                                                   
Resources fiscal  note reflects the Mental Health  Trust Fund                                                                   
responsibility  for the remaining  $22.7 million cost  of the                                                                   
new  facility. The  Mental Health  Fund  will be  replenished                                                                   
from  rents  paid by  the  Division  of General  Services  on                                                                   
behalf  of  the  new building  tenants,  the  Departments  of                                                                   
Labor, Fish  and Game, and Public  Safety. The money  will be                                                                   
repaid over  30 years at an  interest rate of 7.5  percent of                                                                   
the rents  collected. The Department  of Revenue  fiscal note                                                                   
also  reflects the  operating  expenses of  $1.5 million.  He                                                                   
continued   reading  the   numbers   in   the  fiscal   note.                                                                   
Approximately  $3.5 million  of  this amount  will come  from                                                                   
General Services  and $300,000  from commercial  rentals. Mr.                                                                   
Henderson commented  the Department of Administration  fiscal                                                                   
note  reflects the  difference  between  the estimated  lease                                                                   
payments  for the  state, assuming  passage of  the bill.  He                                                                   
disclosed  that  the  note  does  not  reflect  the  deferred                                                                   
maintenance  cost  of $5.8  million  for the  Douglas  Island                                                                   
building and $2.5 million for  the Public Safety building. It                                                                   
is anticipated  that over a 30  year period the  savings will                                                                   
be $13.5 million.                                                                                                               
                                                                                                                                
2:29:06 PM                                                                                                                    
                                                                                                                                
RYAN  BUTCHER, PUBLIC  AFFAIRS  DIRECTOR, GOVERNMENT  AFFAIRS                                                                   
AND  PUBLIC RELATIONS,  ALASKA  HOUSING FINANCE  CORPORATION,                                                                   
DEPARTMENT   OF   REVENUE   testified   via   teleconference,                                                                   
announced  that  the    Alaska  Housing  Finance  Corporation                                                                   
(AKHFC) fiscal  note reflects,  in the contractual  line, the                                                                   
costs savings  of not  having to make  lease payments  on the                                                                   
building  because  it  would  be owned.  He  noted  that  the                                                                   
miscellaneous line  reflected the costs of debt  service paid                                                                   
plus maintenance.  In FY 2011 and FY 2012,  the savings would                                                                   
increase as the years progress.  The expected savings will be                                                                   
approximately $15.2 million.                                                                                                    
                                                                                                                                
Representative  Foster  MOVED  to  report  CSHB  161  out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal note.                                                                                                       
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
CSHB  161 (FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass" recommendation  and  with three  new fiscal notes  from                                                                   
the Department of Revenue, the  Department of Administration,                                                                   
and  the  Department  of  Natural   Resources  and  with  one                                                                   
previously published fiscal note: FN1 (REV).                                                                                    
                                                                                                                                
2:32:48 PM