Legislature(1993 - 1994)
03/12/1994 08:00 AM House STA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 369 - STATE LEASES & LEASE-PURCHASE FINANCING CHAIRMAN VEZEY opened HB 369 for discussion. He announced a representative of the sponsor was not present to testify, but DUGAN PETTY was present. Number 201 DUGAN PETTY, DIRECTOR, DIVISION OF GENERAL SERVICES, DEPARTMENT OF ADMINISTRATION (DOA), addressed HB 369. He stated the DOA has been in support of the companion bill, SB 247 in the Senate, after some minor amendments. He directed the committee to section 6 & 7 of HB 369, which clarifies the relationship of current law between leasing and lease- financing. He stated HB 369 would create two sections in AS 36.30, one dealing with the lease of real property, and the other dealing with lease-financing of real property. He emphasized AS 36.30 was beginning to get fairly confusing in current law. MR. PETTY recommended amendments to section 7 of HB 369, which have been made in SB 247. He recommended on page 6, line 16 which states "when evaluating proposals to acquire property under lease-purchase," that the term "real" be inserted before "property." He recommended the same amendment on page 6, line 22. On page 7, line 9, he recommended inserting, after the word "agreement," "to acquire real property." Under the current definition of lease-purchase or lease-financing in AS 36.30, transactions for copier leases which cost between $100-$1,700 a month are included. The DOA has approximately 1,000 of these copier agreements by the agencies. He did not believe it was the intent of HB 369 to include those sorts of transactions approved by law. HB 369 was intended to focus on real property. Number 266 CHAIRMAN VEZEY stated HB 369 would be involved with items such as computers, copy machines, and road maintenance equipment. He asked if there is not already a $1 million cap on lease-purchase agreements. He thought HB 369 would not apply to a purchase of less than $1 million. MR. PETTY responded the $1 million cap affects the lease side. He pointed out; however, with the current form of HB 369 there is no cap whatsoever. Under section 7, any lease- purchase transaction regardless of dollar amount would require approval by the legislature. Number 282 CHAIRMAN VEZEY clarified the state would not require legislative approval to lease-purchase a $1.5 million excavator. MR. PETTY replied, as HB 369 is written, an approval would be required from the legislature to acquire a $1.5 million excavator or a $100 copier contract applied to the definition of lease-purchase or lease agreement. CHAIRMAN VEZEY believed a dollar cap might be more effective than a blanket approval. Number 297 REPRESENTATIVE OLBERG asked if the dollar cap did not already exist. MR. PETTY replied yes, for lease-financing with a cap of $1 million a year, and $10 million over the term of the lease. Number 304 REPRESENTATIVE OLBERG inquired if HB 369 was termed the "Wildwood Bill." CHAIRMAN VEZEY answered that terminology for HB 369 is in the sponsor statement by RANDY WELKER. He quoted, "This legislation has been responsible for ongoing review and concern over lease-purchases of the Wildwood Correction Center, and the Court Plaza Building." He asked if MR. PETTY had his proposed amendment in writing. Number 319 MR. PETTY did not, but he marked on his copy of the HB 369. Number 339 CHAIRMAN VEZEY clarified the recommended amendments were as follows: Page 6, line 16, shall read, "when evaluating proposals to acquire real property..."; page 7, line 9, shall read, "may not enter into lease-purchase agreement to acquire real property..." Number 347 MR. PETTY added page 6, line 22, shall read, "whether acquisition of the real property by lease-purchase agreement..." Number 350 REPRESENTATIVE G. DAVIS moved to adopt the requested amendments to HB 369. Number 353 CHAIRMAN VEZEY recognized the motion and asked the committee secretary to call the roll. IN FAVOR: VEZEY, KOTT, G. DAVIS, SANDERS, OLBERG ABSENT: ULMER, B. DAVIS CHAIRMAN VEZEY announced the requested amendments were adopted to HB 369 and a committee substitute will be drawn up to reflect them. Number 362 REPRESENTATIVE G. DAVIS moved to pass CSHB 369 from committee with individual recommendations and attached fiscal notes. CHAIRMAN VEZEY recognized the motion and asked the committee secretary to call the roll. IN FAVOR: VEZEY, KOTT, G. DAVIS, SANDERS, OLBERG. ABSENT: ULMER, B. DAVIS CHAIRMAN VEZEY announced CSHB 369 passed from the House State Affairs committee. ADJOURNMENT CHAIRMAN VEZEY adjourned the meeting at 9:57 a.m.
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