04/11/2013 09:00 AM House FINANCE

SENATE BILL NO. 88                                                                                                              
                                                                                                                                
     "An Act  authorizing the state bond  committee to issue                                                                    
     certificates   of   participation    to   finance   the                                                                    
     construction  and equipping  of residential  housing to                                                                    
     serve  the  Anchorage  campus   of  the  Alaska  Native                                                                    
     Medical  Center;  and  authorizing  the  Department  of                                                                    
     Administration   to   enter   into   a   lease-purchase                                                                    
     agreement for  the benefit of the  Alaska Native Tribal                                                                    
     Health Consortium."                                                                                                        
                                                                                                                                
3:03:45 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze  explained  that  the bill  related  to  a                                                                    
certificate of participation, which was  a bond that did not                                                                    
require  voter approval.  He detailed  that  the bill  would                                                                    
finance a residential facility on  the Alaska Native Medical                                                                    
Center  campus  in  Anchorage. The  significant  expenditure                                                                    
would be  funded on  an annual  basis through  the operating                                                                    
budget. He  noted that Medicaid  savings resulting  from the                                                                    
facility offset the costs to the state.                                                                                         
                                                                                                                                
Representative  Holmes  discussed  that  the  Department  of                                                                    
Revenue (DOR)  and the sponsor's office  had been incredibly                                                                    
responsive  to  her questions  from  the  previous day.  She                                                                    
discussed that  five floors  of the  building would  be paid                                                                    
for by the certificate of  participation and one floor would                                                                    
be paid  for by the  Alaska Native Tribal  Health Consortium                                                                    
(ANTHC). She was satisfied with  the bill's language because                                                                    
the   project  described   in  Section   2  referred   to  a                                                                    
residential housing facility  and related pedestrian bridge;                                                                    
the residential portion would be  funded by the certificates                                                                    
of  participation. She  continued that  ANTHC would  pay for                                                                    
the classroom  treatment section.  Page 2, lines  10 through                                                                    
12 referenced a  memorandum of agreement to  be entered into                                                                    
by ANTHC and  the state; the memorandum would  flush out any                                                                    
details  including  ANTHC's  monetary  contribution  to  the                                                                    
project.  Additionally, she  clarified that  DOR would  have                                                                    
the  ability  to use  any  bond  premiums generated  by  the                                                                    
certificates of participation for the cost of construction.                                                                     
                                                                                                                                
3:07:22 PM                                                                                                                    
                                                                                                                                
Representative  Costello discussed  the three  fiscal notes:                                                                    
one  zero note  from the  Department of  Administration; one                                                                    
fiscal impact note from the  Department of Health and Social                                                                    
Services including  $3,849,800 in incoming  federal receipts                                                                    
in FY  15 through FY 19  and a reduction out  of the general                                                                    
fund in  the same  amount; and one  fiscal impact  note from                                                                    
the  Department  of Revenue  including  $765,000  in FY  14,                                                                    
$2,791,600 in FY  15, $2,792,500 in FY 16,  $2,793,700 in FY                                                                    
17, $2,795,700 in FY 18, and $2,793,900 in FY 19.                                                                               
                                                                                                                                
Representative  Costello  MOVED  to  REPORT  SB  88  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes.                                                                                                      
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
Co-Chair Austerman  spoke to the  fiscal notes and  the cost                                                                    
over time. He appreciated the  direction of the bill and the                                                                    
need  for  the  project;  however, he  cautioned  about  the                                                                    
fiscal obligation and the  uncertainty of federal government                                                                    
financing.                                                                                                                      
                                                                                                                                
Co-Chair  Stoltze echoed  Co-Chair Austerman's  comments. He                                                                    
commented on  his preference  for bonds  versus certificates                                                                    
of  participation  given  the additional  checks  and  voter                                                                    
approval  requirement.  He  remarked that  the  project  had                                                                    
tangible benefits.                                                                                                              
                                                                                                                                
Co-Chair  Stoltze WITHDREW  his  OBJECTION.  There being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
SB  88  was REPORTED  out  of  committee  with a  "do  pass"                                                                    
recommendation  and with  three previously  published fiscal                                                                    
impact notes: FN1 (ADM), FN2 (DHS), FN3 (REV).                                                                                  
                                                                                                                                
3:12:32 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:14:43 PM                                                                                                                    
RECONVENED