Legislature(1997 - 1998)
05/10/1998 07:38 PM House FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| SB 36 | |||
| SB 151 | |||
| SB 216 | |||
| SB 219 | |||
| SB 231 | |||
| SB 263 | |||
| SB 264 | |||
| SB 314 | |||
| SB 340 | |||
| SB 347 | |||
| SB 360 | |||
HOUSE FINANCE COMMITTEE
May 10, 1998
7:38 P.M.
TAPE HFC 98 - 167, Side 1
TAPE HFC 98 - 167, Side 2
CALL TO ORDER
Co-Chair Gene Therriault called the House Finance Committee
meeting to order at 7:38 p.m.
PRESENT
Co-Chair Hanley Representative Kelly
Co-Chair Therriault Representative Kohring
Representative Davies Representative Martin
Representative Davis Representative Moses
Representative Foster Representative Mulder
Representative Grussendorf
ALSO PRESENT
Ralph Bennett, Staff, Senator Taylor; Wendy Redman, Vice
President, Statewide Programs, University of Alaska; John T.
Shively, Commissioner, Department of Natural Resources;
Carol Carroll, Director, Division of Support Services,
Department of Natural Resources; Larry Labole, Staff,
Representative Foster.
SUMMARY
SB 231 "An Act making and amending capital appropriations
and reappropriations and capitalizing funds; and
providing for an effective date."
HCS CSSB 231 (FIN) was REPORTED out of Committee
with "no recommendation."
SB 340 "An Act relating to the University of Alaska and
university land, and authorizing the University of
Alaska to select additional state land."
HCS CSSB 340 (FIN) was REPORTED out of Committee
with a "do pass" recommendation and with two
fiscal impact notes, one by the Department of
Natural Resources and one by the University of
Alaska both dated 5/6/98.
SB 347 "An Act relating to the increase of an
appropriation item based on additional federal or
other program receipts."
SB 347 was REPORTED out of Committee with a "do
pass" recommendation and with a zero fiscal note
by the Legislative Finance Division, 4/3/98.
SB 360 "An Act authorizing the issuance of bonds in the
amount of $257,600,000 by the Alaska Housing
Finance Corporation for certain capital projects;
relating to those bonds and to the appropriation
of revenue of the Alaska Housing Finance
Corporation; and providing for an effective date."
HCS SB 360 was REPORTED out of Committee with "no
recommendation" and with a fiscal impact note by
the Department of Revenue, 5/5/98.
SENATE BILL NO. 340
"An Act relating to the University of Alaska and
university land, and authorizing the University of
Alaska to select additional state land."
RALPH BENNETT, STAFF, SENATOR TAYLOR read the sponsor
statement (copy on file). He observed that the provisions
of SB 340 allow the University of Alaska to select 250,000
acres of state land, subject to approval by the Legislature.
Land approved for transfer would include the interest of the
state in minerals and to oil and gas, subject to certain
limitations. Lands subject to a coal lease or pending
application for a coal lease are not available for
selection. The University would bear the costs of
selection, platting, surveying and conveyance. All land
selections must be made by December 31, 2020. Twenty
percent (20%) of the income derived from selected lands must
be used at the campus closest to the income generating
parcel(s) if a local match is provided. All lands conveyed
under this program are exempt from municipal taxation. He
observed that SB 340 is compatible with legislation
introduced in Congress by Senator Murkowski, S.660. If
passed, S.660 could convey up to 500,000 acres of federal
lands in Alaska to the University of Alaska. The first
250,000 acres do not require a state match. Additional
federal lands would require a state match.
The University of Alaska system was created under federal
authority as a land grant institution to provide for the
higher education requirements of Alaska's people in
perpetuity. Most colleges established under the land grant
program were endowed with sizable land bases from which to
generate income to be used for operating purposes. Unlike
most institutions in the lower 48 states, the University of
Alaska does not have the relatively larger population base
and proximity to other support services that are so
beneficial. The University of Alaska also suffers from a
smaller pool of alumni and other normal sources of endowment
income, which many institutions rely on to help support
operations, especially subsidies for teaching positions.
Mr. Bennett observed that in the past decade several
legislators have introduced legislation allowing the
University of Alaska to select additional lands from the
State. The purpose of all legislative attempts to provide
more land for the University statewide system has been to
provide more income producing assets where monetary
resources are becoming scarcer and unpredictable. This bill
continues the effort to give the University of Alaska a
larger more productive land base. The bill also provides
clear expectations that land conveyed is to be used for the
development of value added industries where appropriate.
Representative Kelly MOVED to ADOPT Amendment 1 (copy on
file).
WENDY REDMAN, VICE PRESIDENT, STATEWIDE PROGRAMS, UNIVERSITY
OF ALASKA explained that Amendment 1 would incorporate a
number of amendments requested by the Miners' Association.
The amendment excludes, from selection, lands with existing
mining claims or prospecting sites. It also excludes lands
with oil, gas, or coal leases. Lands included in the
Department of Natural Resources' five-year plan or lands
that the Department feels might reasonably be included in
the five-year plan are also excluded.
Representative Martin questioned the limitations on
selection. Ms. Redman clarified that the University is not
prevented from engaging in mining activity on land that has
been selected. The University is prohibited from selecting
lands that already have mining activity at the time of
selection. She acknowledged the difficulty of having dual
ownership between the University and the state of Alaska.
The legislation does not apply to federal lands.
Amendment 1 would extend the selection period from the year
2012 to the year 2020. Additional provisions in the
amendment would assure the protection of proprietary
information.
There being NO OBJECTION, Amendment 1 was adopted.
Ms. Redman discussed Amendment 2 (copy on file). She
suggested that the amendment be amended to add a period on
line 8 after "order" and delete the rest of line 8 through
line 12. Representative Kelly MOVED to amend Amendment 2 as
suggested by Ms. Redman. There being NO OBJECTION, it was
so ordered.
Ms. Redman explained that the amendment limits the amount of
acreage in excess of the University's grant that can be
requested. The amendment is at the request of the mining
industry. It would limit the amount of land that would be
tied up prior to legislative action. The amendment would
also provide that 20 percent of the earnings from land
selected would be used to support natural resource
development within the region from which the resource was
taken. Municipalities within the region would be required
to match the amount. The amendment would also provide tort
protection. She clarified that the legislation mandates
that the University continues customary and traditional use
on the lands.
In response to a question by Representative Martin, Ms.
Redman clarified that reforestation would be included in the
20 percent calculation.
Co-Chair Therriault MOVED to ADOPT Amendment 2. There being
NO OBJECTION, it was so ordered.
Amendment 3 was not offered.
Representative Davies MOVED to ADOPT Amendment 4 (copy on
file). He explained that the amendment would clarify that
the governor settles disagreements between the University
and the Administration in regards to the selection process.
Ms. Redman noted that the University supports Amendment 4.
There being NO OBJECTION, it was so ordered.
Representative Grussendorf MOVED to ADOPT Amendment 5 (copy
on file). Amendment 5 provides that the legislation would
only take affect if the federal government makes at grant of
at least 250,000 acres by January 1, 1999.
Representative Martin argued against the amendment.
Representative Davies did not think that the effective date
would limit action by Congress. Co-Chair Therriault pointed
out that the current Congress would have to act or the
Alaska Legislature would have to take additional action in
the future.
Representative Davies MOVED to amend Amendment 5 by deleting
"during 1998" on line 5. There being NO OBJECTION, it was
so ordered.
Ms. Redman stated that the University did not support the
amendment.
Mr. Bennett observed that the University would lose 250,000
acres in federal land unless SB 340 is passed.
Representative Davis questioned if it is the sponsor's
intent to link SB 340 to federal legislation. Mr. Bennett
replied that it is the sponsor's intent that SB 340 stands
alone.
Representative Grussendorf argued in support of the
amendment. He stressed that if the University receives
additional land that there should be some reduction on the
University's operating budget.
Ms. Redman noted that the University has 112,000 acres,
which is the smallest university land grant in the United
States. These lands earned $500 thousand dollars in the
first 30 years. In the last ten years they have earned $30
million dollars. They are currently generating $3 million
dollars a year. She emphasized that it takes a lot of land
to create an endowment that will support the University.
Receipts from the fund are shown as program receipts in the
University's operating budget.
A roll call vote was taken on the motion to adopt Amendment
5.
IN FAVOR: Davies, Davis, Grussendorf, Foster, Moses
OPPOSED: Kelly, Kohring, Martin, Mulder, Therriault
Co-Chair Hanley was absent from the vote.
The MOTION FAILED (5-5).
Representative Davis MOVED to ADOPT Amendment 6 (copy on
file). He explained that the amendment would protect
municipalities and their selections. Ms. Redman observed
that the amendment would extend from three to five years the
time that the commissioner can withhold lands. She felt
that three years was a reasonable amount of time. She
pointed out that the commissioner need not make any lands
available that they believe are not in the best interest of
the state of Alaska.
Representative G. Davis spoke in support of the amendment.
Representative Davies spoke against the amendment. He
emphasized that most municipalities have had an opportunity
to make their selections. Representative Grussendorf noted
that there is pressure by the Legislature to create boroughs
in the unincorporated areas of the state. Representative G.
Davis pointed out that there are 600,000 acres of municipal
selection awaiting review.
JOHN T. SHIVELY, COMMISSIONER, DEPARTMENT OF NATURAL
RESOURCES spoke in support of the amendment. Representative
Martin noted that the Department of Natural Resources
granted land to the University that had belonged to local
communities.
Representative Davies observed that the legislation provides
that the commissioner of natural resources may not include
land on a land selection list, if the commissioner
determines it is not in the best interests of the state.
He suggested that land in areas where a borough is about to
be formed could be excluded under this provision.
Commissioner Shively agreed that it would be possible to
exclude land under this provision, but emphasized that it is
impossible to anticipate where new boroughs will be
organized.
Representative Grussendorf stressed that communities must
compete with land selections by the University and the
Mental Health Trust.
A roll call vote was taken on the motion to adopt Amendment
6.
IN FAVOR: Moses, Davis, Grussendorf
OPPOSED: Foster, Kelly, Kohring, Martin, Mulder, Therriault
Co-Chair Hanley absent from the vote.
The MOTION FAILED (3-7).
Amendment 7 was not offered.
Ms. Redman clarified that the University is responsible for
paying all costs of the land selection, surveying, planning
and conveyance. The University would use university
receipts to cover these costs. She stressed that the
Department of Natural Resources would not be responsible for
the costs, if the legislature did not give the University
program receipt authority. Costs will be reimbursed to the
Department of Natural Resources through actual proceeds of
land development.
Co-Chair Therriault questioned why the fiscal note contains
$30 thousand general fund dollars.
CAROL CARROLL, DIRECTOR, DIVISION OF SUPPORT SERVICES,
DEPARTMENT OF NATURAL RESOURCES explained that the
Department of Natural Resources' fiscal note contains two
sections. One section requires the University to pay for
conveyance and selections. The other section requires that
the state of Alaska pay the cost for recording patents and
documents. She stressed that it is difficult to estimate
interagency receipts from the University.
Representative Mulder MOVED to report HCS CSSB 340 (FIN) out
of Committee with the accompanying fiscal notes. There
being NO OBJECTION, it was so ordered.
HCS CSSB 340 (FIN) was REPORTED out of Committee with a "do
pass" recommendation and with two fiscal impact notes, one
by the Department of Natural Resources and one by the
University of Alaska both dated 5/6/98.
SENATE BILL NO. 347
"An Act relating to the increase of an appropriation
item based on additional federal or other program
receipts."
Senate Bill 347 was previously heard on 5/5/98.
Representative Grussendorf felt that the Legislative Budget
and Audit Committee should handle some of the issues, but
stated that he would not offer any amendments.
Representative Mulder MOVED to report SB 347 out of
Committee with the accompanying fiscal note. Representative
Davies OBJECTED. He maintained that the existing system has
worked and that the legislation is unnecessary.
A roll call vote was taken on the motion to move the
legislation.
IN FAVOR: Foster, Kelly, Kohring, Martin, Moses, Mulder,
Therriault, Hanley
OPPOSED: Davies, Davis, Grussendorf
The MOTION PASSED (8-3).
SB 347 was REPORTED out of Committee with a "do pass"
recommendation and with a zero fiscal note by the
Legislative Finance Division, 4/3/98.
SENATE BILL NO. 231
"An Act making and amending capital appropriations and
reappropriations and capitalizing funds; and providing
for an effective date."
Co-Chair Hanley provided members with committee substitute
for SB 231, work draft #0-GS2039\L, 5/10/98(copy on file).
Co-Chair Hanley provided members with a copy of technical
corrections (copy on file). He explained that the work
draft incorrectly contained lines 25 - 29 on page 7. These
were deleted by previous committee action. He also noted
that Amendment 23 was adopted by the Committee and should
have been included in the committee substitute. He stated
that these technical corrections would
Co-Chair Hanley MOVED to ADOPT Amendment 26A (copy on file).
Amendment 26A would clarify that the appropriation for the
Kenny Lake Elementary School replacement is $4,071.274
million dollars. There being NO OBJECTION, it was so
ordered.
Co-Chair Hanley MOVED to ADOPT Amendment 27 (copy on file).
He explained that the legislative drafter to correct
problems with the effective dates suggested the amendment.
There being NO OBJECTION, it was so ordered.
Co-Chair Hanley MOVED to ADOPT Amendment 28 (copy on file).
Amendment 28 would delete "no interest loan" on page 18,
section 46, line 11 and insert "grant". He explained that
section 46 pertains to the Alyeska settlement. There is an
existing site for a grant program in the settlement. There
are no agencies with the authority to make a loan. There
being NO OBJECTION, it was so ordered.
Representative Mulder MOVED to ADOPT Amendment 29 (copy on
file). Amendment 29 would delete "east" and insert "south".
There being NO OBJECTION, it was so ordered.
Representative Mulder MOVED to ADOPT Amendment 30 (copy on
file). He explained that there are five parts to Amendment
30. The amendment would authorize $150 thousand dollars in
AHFC receipts to the city of Nome for the purchase of a fire
truck; $230 thousand dollars in AHFC receipts for the
Mountainview Community Recreation Center; $200 thousand
general fund dollars for the Gravina Island Bride; and
$2,137 million dollars in AHFC bonds for the Sand Point Boat
Harbor Expansion Project. It also adds $310 thousand
dollars to the Department of Administration, Commissioner's
Office, for contract negotiations.
Representative Davies MOVED to amend Amendment 30 by
increasing the appropriation to the Mountainview Community
Recreation Center by $100 thousand dollars. Representative
Mulder observed that the Committee transferred $100 thousand
dollars to the Center in a previous amendment.
A roll call vote was taken on the motion.
IN FAVOR: Davies, Grussendorf, Moses
OPPOSED: Davis, Foster, Kelly, Kohring, Martin, Mulder,
Therriault, Hanley
The MOTION FAILED (3-8).
Representative Foster MOVED to ADOPT Amendment 31 (copy on
file). Amendment 31 would add $23,620,289 million dollars
for replacement of the Kashunamiut School in Chevak.
LARRY LABOLE, STAFF, REPRESENTATIVE FOSTER explained that
the Kashunamiut School has been number one on the Department
of Education's list. The school replacement has been
through the planning stage. The funding source would be the
Alaska Housing Finance Corporation (AHFC) bond package. He
observed that a parallel amendment would be needed in SB
360.
Representative Mulder acknowledged the need for a
replacement school in Chevak and suggested that it be
addressed in the next legislative session.
A roll call vote was taken on the motion.
IN FAVOR: Davies, Foster, Grussendorf, Moses, Mulder
OPPOSED: Davis, Kelly, Kohring, Martin, Therriault, Hanley
The MOTION FAILED (5-6).
Co-Chair Hanley MOVED to ADOPT Amendment 32 (copy on file).
Amendment 32 is a technical amendment to correctly identify
section 116 (b) as a capital project. There being NO
OBJECTION, it was so ordered.
Representative Mulder MOVED to ADOPT Amendment 33 (copy on
file). He explained that the amendment would add $1.2
million dollars to the Department of Public Safety for
statewide academy deferred maintenance, repair and
construction and $1,090,00 million dollars to the Department
of Environmental Conservation for Cordova water system
improvements.
Representative Grussendorf clarified that the Sitka Academy
did not receive funding in the previous fiscal year.
There being NO OBJECTION, Amendment 33 was adopted.
Representative Mulder MOVED to report HCS CSSB 231 (FIN) out
of Committee. There being NO OBJECTION, it was so ordered.
HCS CSSB 231 (FIN) was REPORTED out of Committee with "no
recommendation."
SENATE BILL NO. 360
"An Act authorizing the issuance of bonds in the amount
of $257,600,000 by the Alaska Housing Finance
Corporation for certain capital projects; relating to
those bonds and to the appropriation of revenue of the
Alaska Housing Finance Corporation; and providing for
an effective date."
Representative Mulder MOVED to ADOPT Amendment 3 (copy on
file). Amendment 3 includes $1.2 million dollars to the
Department of Public Safety for statewide academy deferred
maintenance, repair and construction and $1,090,00 million
dollars to the Department of Environmental Conservation for
Cordova water system improvements in order to conform SB 360
to SB 231. There being NO OBJECTION, it was so ordered.
Representative Mulder MOVED to ADOPT Amendment 4 (copy on
file). Amendment 4 includes the entire amount of bonding,
issuance and reserves and clarifies that the total bond
indebtedness is $199.634.809 million dollars. There being
NO OBJECTION, it was so ordered.
Representative Mulder MOVED to report HCS CSSB 360 (FIN) out
of Committee with the accompanying fiscal note.
HCS SB 340 was REPORTED out of Committee with "no
recommendation" and with a fiscal impact note by the
Department of Revenue, 5/5/98.
ADJOURNMENT
The meeting adjourned at 11:45 p.m.
House Finance Committee 10 5/11/98 p.m.
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