Legislature(1993 - 1994)
04/20/1994 08:40 AM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 247 "An Act relating to state leases and to state
lease-purchase and lease-financing agreements, and
repealing a legislative authorization
previously given for acquisition of a facility
through a lease-purchase
agreement; and providing for an effective date."
HCS CSSB 247 (FIN) was reported out of Committee with
a "do pass" recommendation and with two zero
fiscal notes by the Department of
Administration and the Legislative Affairs Agency.
SENATE BILL NO. 247
"An Act relating to state leases and to state lease-purchase
and lease-financing agreements, and repealing a legislative
authorization previously given for
acquisition of a facility through a lease-purchase
agreement; and providing for an effective date."
ARTHUR H. SNOWDEN, II, ADMINISTRATIVE DIRECTOR, ALASKA COURT
SYSTEM provided members with information regarding state
acquisition of the Anchorage Times Building (copy on file).
He noted that an appraiser estimated that the state could
save $3.7 to $4.0 million dollars by the purchase. In order
to complete the purchase the effective date on the bill as
it relates to the Alaska Court System would have to be
moved. He noted that the members have received a committee
substitute, work draft, 8-LS1447\I, dated 4/19/94 (copy on
file). He stated that the committee substitute would change
the effective date to allow sufficient time to complete the
purchase. He assured members that no other purchases are
anticipated.
RANDY WELKER, LEGISLATIVE AUDITOR, LEGISLATIVE AUDIT
DIVISION testified that the Legislative Budget and Audit
Committee has been concerned about several lease purchases
that have occurred in the recent past. He explained that the
legislation would require that all branches of government
obtain prior, specific, legislative approval, by law, to
proceed with lease purchases. He observed that the
legislation lowers the threshold whereby agencies must give
notice to the legislature to enter or renew leases.
Representative Martin expressed concern with the extension
of legislative authority. Mr. Welker stressed that the
language clarifies rather than expands authority. He noted
that lease purchase statutes require that the Legislative
Budget and Audit Committee, Legislative Council and the
judicial branch give notice to the full legislature that
they intend to enter into a lease purchase. The statute
would be amended to add the requirment of legislative
approval. He acknowledged that the legislation further
limits the authority of the Legislative Council.
Co-Chair Larson MOVED to ADOPT work draft, 8-LS1447\I, dated
4/19/94. There being NO OBJECTION, it was so ordered.
Co-Chair MacLean MOVED to ADOPT AMENDMENT 1 (copy on file).
She explained that the amendment would add a repealer. The
repealer was included in other versions of the bill. It
would repeal authorization for a Fairbanks court house given
in 1986. She stressed that it is the only outdated lease
purchase authorization.
Mr. Snowden spoke against Amendment 1. He stressed that the
legislature would have to approve funding for design and
engineering before a lease purchase could take place. He
added that the need for a Fairbanks court house exists. He
reiterated that the Alaska Court System would seek approval
for design and engineering before a lease purchase would
take place in Fairbanks.
Representative Hanley noted that some lease purchases were
completed through certificates of participation between two
agencies. Mr. Snowden emphasized that before he could enter
into a certificate of participation the building price would
have to ascertained. He stressed that before the building
price was ascertained he would need to seek funding from the
legislature for design and engineering.
A roll call vote was taken on the motion to adopt AMENDMENT
1.
IN FAVOR: Martin, Parnell, Hanley, MacLean, Larson OPPOSED:
Navarre, Therriault, Brown, Grussendorf
Representatives Foster and Hoffman were not present for the
vote.
The MOTION PASSED (5-4).
Co-Chair Larson provided members with AMENDMENT 2 (copy on
file). He explained that the amendment would add the
following language: "The Board of Regents may, when leases
are to be paid for with federal grant funds, recovery of
indirect costs of university activities, or other university
receipts as defined by AS 14.40.491, and grant or other
commitment is firm for two years or less, enter into a lease
with an initial term equal to the term of the firm
commitment, and with optional renewal periods for up to five
years."
Mr. Welker clarified that all receipts of the University
other than general fund money is included under AS
14.40.491.
ALISON ELGEE, DIRECTOR OF BUDGET, UNIVERSITY OF ALASKA
explained that all non-federal contract work is accounted
for under university receipts. She explained that the
University of Alaska frequently receives federal or other
contracts with a one year firm commitment that could
potentially be extended for several years. As written, SB
247 presently limits the University to a one year lease,
with a one year renewal option. The amendment would allow up
to five one year renewal options. She emphasized that if the
market declines the University would rebid the lease.
In response to a question by Representative Hanley, Ms.
Elgee clarified that student fees are a separate category
not included in university receipts under AS 14.
There being NO OBJECTION, AMENDMENT 2 was ADOPTED.
Representative Navarre noted that the only change in HCS
CSSB 247 (FIN) is section 12. Mr. Welker noted that he had
no objection to section 12, which extends the effective date
for the Anchorage court house lease purchase.
In response to a question by Representative Martin, Mr.
Welker reiterated that any lease that exceeds $500.0
thousand dollars or is 2.5 percent over the term must be
approved by the legislature. Only new leases would be
effected.
Co-Chair MacLean MOVED to report HCS CSSB 247 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal notes.
HCS CSSB 247 (FIN) was reported out of Committee with a "do
pass" recommendation and with two zero fiscal notes by the
Department of Administration and the Legislative Affairs
Agency.
| Document Name | Date/Time | Subjects |
|---|