Legislature(1999 - 2000)
03/17/1999 01:40 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 112
"An Act establishing the Alaska public building fund;
and providing for an effective date."
REPRESENTATIVE JEANETTE JAMES, SPONSOR testified in support
of HB 112. She observed that HB 112 would establish the
Alaska Public Building Fund as recommended by the Deferred
Maintenance Task Force. The fund would be established within
the general fund. The money in the fund would not lapse at
the end of the year. The Administration plans to set up a
rent schedule for state owned office space. The rent would
be deposited into the Alaska Public Building Fund. It could
then be used for maintenance.
Co-Chair Therriault pointed out that the House Finance
Committee reviewed similar legislation during the previous
session. The legislation failed to pass in the final hours.
Representative James clarified that agencies would pay rent
for the space they utilize in state buildings. The rent
would be calculated based on the depreciation and value of
the property. The rent money could then be used for
maintenance issues. She observed that money needs to be
accumulated for long term maintenance.
Co-Chair Therriault pointed out that the money would still
be general funds. There would be no prohibition on future
legislatures. He asked if the money would be identified as
other funds. Representative James felt that it would be
general funds.
Co-Chair Therriault noted that "agencies" was changed to
"occupant" in order to take into account private occupancy
in the Bank of America building.
Representative Grussendorf spoke in support of the
legislation.
Co-Chair Therriault noted that pressure to spend the funds
for other items would remain.
Representative J. Davies expressed concern that not all
agencies would participate in the program equally. He
suggested that participation be based on a square foot
formula. He asked the meaning of "use" on page 2, line 1.
Representative James observed that maintenance has to be
described. She emphasized the need to fund long term
maintenance.
ALISON ELGEE, DEPUTY COMMISSIONER, DEPARTMENT OF
ADMINISTRATION testified in support of the legislation. She
explained that there are a variety of federal rules that
govern the way rental rate funds are established. The
Administration is working with a statewide indirect cost
consultant to develop a rate schedule to take to the federal
government for approval. The rate schedule includes annual
maintenance costs, janitorial service, and utilities. These
costs are currently appropriated in the Department of
Transportation and Public Facilities's budget for public
facility maintenance. She stressed that it allows them to
add depreciation. Depreciation would be added into the
rental structure and collected for major maintenance renewal
and replacement components. Each program will pay based on
their space occupancy. The money will go into the fund.
Annual operating and maintenance costs would be appropriated
out of the fund. The capital budget would use the fund for
replacement of building components. The monies would be
accounted as general fund in the agency's program budget.
When the funds are appropriated out of the building fund
they would be accounted as an internal service fund source.
The legislation would allow the state to leverage other
funds.
Co-Chair Therriault questioned if the same dollar would be
counted twice. Co-Chair Mulder explained that the funds
would be backed out. Co-Chair Therriault questioned if the
funds carried forward for renewal and replacement would also
be backed out. Ms. Elgee clarified that the capital
expenditure would also be backed out as duplicated
expenditures.
Representative J. Davies summarized that there would be
annual operating expenses and capital expenses. He asked the
definition of "use". Ms. Elgee clarified that "use" is
intended to encompass all of the components of the
maintenance schedule. She observed that the components of
the rental schedule would be the management (administration
and overhead of operating maintenance personal), operations
(utilities), maintenance (janitorial), and the depreciation
costs (renewal and replacement). "Use" was used to clarify
the sentence. She emphasized that everything would be
covered under management, operation, maintenance and
depreciation.
Representative Austerman observed that major maintenance and
depreciation are the two new things that would be
accomplished by the legislation. Ms. Elgee explained that
the failure to provide sufficient funding on an annual basis
creates problems. The deferred maintenance backlog has
developed because of an inability to replace major building
components on a timely basis and because major building
components have deteriorated more rapidly then anticipated.
The legislation would allow an expansion of dollars
available for annual maintenance by leveraging other fund
sources that are not being charged for their space cost and
provide a pool of funds for major building component
replacements.
Representative Grussendorf asked if the federal government
or other entities occupy space in state buildings. Ms. Elgee
stated that there is federal and private occupancy in the
Bank of America building and private occupancy in the Court
Plaza building. Representative Grussendorf observed that
"use" broadens the language, but that the wording
"management, operation, maintenance, and depreciation" would
be sufficient.
Co-Chair Therriault noted that there is a zero fiscal note.
Representative Kohring MOVED to report HB 112 out of
Committee with the accompanying fiscal note. There being NO
OBJECTION, it was so ordered.
HB 112 was REPORTED out of Committee with a "do pass"
recommendation and with a zero fiscal note by the Office of
the Governor, dated 3/10/99.
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