Legislature(2005 - 2006)CAPITOL 106

04/23/2005 09:30 AM House STATE AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
Bills Previously Heard/Scheduled
Heard & Held
HB  48-EXPENDITURE FOR CAPITOL CONSTRUCTION                                                                                   
10:11:06 AM                                                                                                                   
VICE CHAIR  GATTO announced that  the next order of  business was                                                               
HOUSE BILL  NO. 48 "An Act  relating to a determination  of costs                                                               
attributable to  relocating the legislature or  the state capital                                                               
or of constructing a new  capitol building in the present capital                                                               
city,  and to  a  determination  of all  costs  of retaining  the                                                               
existing  capitol  building and  keeping  the  state capital  and                                                               
legislature  in  the  present capital  city;  relating  to  voter                                                               
approval  of  certain  bondable   costs;  and  providing  for  an                                                               
effective date."                                                                                                                
BEN MULLIGAN, Staff to Representative  Bill Stoltze, Alaska State                                                               
Legislature,  testified  on  behalf  of  Representative  Stoltze,                                                               
sponsor of HB  48.  He said he would  address questions that were                                                               
asked on  a previous day.   He said  if a lease  agreement amount                                                               
exceeds  $500,000  annually,  or   the  total  will  exceed  $2.5                                                               
million,  the  legislature  would   be  notified  of  the  lease.                                                               
Furthermore, the lease  must not exceed 40 years.   The same time                                                               
requirement  would apply  to  a lease  purchase  agreement.   Mr.                                                               
Mulligan  noted that  AS 36.30.085(e)  applies to  lease purchase                                                               
agreements, and read as follows:                                                                                                
          (e) The department, the Board of Regents, the                                                                         
     legislative  council,  or  the supreme  court  may  not                                                                    
     enter  into a  lease-purchase agreement  to acquire  or                                                                    
     improve  real property  unless the  agreement has  been                                                                    
     approved by the legislature by law.                                                                                        
MR.  MULLIGAN  said  the  proposed  [capitol  building]  plan  on                                                               
Telephone Hill [in Juneau] would have  to be approved for a lease                                                               
purchase agreement by the legislature.                                                                                          
MR. MULLIGAN, regarding a prior  day's question on retroactivity,                                                               
     I talked  to our  legal department  and then  our legal                                                                    
     council, and ... they both  agreed that this would be a                                                                    
     problem, and we're open to  a friendly amendment to get                                                                    
     rid of that and just have an effective date.                                                                               
10:14:20 AM                                                                                                                   
VICE CHAIR GATTO  said, "Now that some of  the considerations for                                                               
Telephone  Hill have  essentially  been minimized,  I think  it's                                                               
fair to say that the effective  date issue would be a minor one."                                                               
He noted for  the record that he  is also a sponsor  of the bill.                                                               
He reviewed  that the Frank Initiative  asks for the costs  to be                                                               
revealed for any capital relocation.   However, consideration was                                                               
made that a  relocation made within the same  community would not                                                               
be counted as  a relocation to a different community,  and he and                                                               
Representative Stoltze thought it should  be.  The bill addresses                                                               
the  intent that  if the  legislature wants  to move  into a  new                                                               
structure, a bond would have to  be approved.  He stated that the                                                               
capitol is the only building that is owned by every Alaskan.                                                                    
10:16:28 AM                                                                                                                   
REPRESENTATIVE GARDNER observed  that if both HB 48 and  HB 23 by                                                               
Representative  Rokeberg passes,  even if  a community  donated a                                                               
building to the legislature, a vote  of the people would still be                                                               
necessary to approve it.                                                                                                        
VICE CHAIR GATTO  responded, "Sure, the bondable  cost would have                                                               
to be approved."                                                                                                                
MR. MULLIGAN said,  "The state money aspect comes  into play when                                                               
we   have   to  approve   the   rent   when  it   comes   through                                                               
appropriations."    He  said  he  could  talk  to  Representative                                                               
Rokeberg's staff to see how the two bills work together.                                                                        
10:17:32 AM                                                                                                                   
VICE  CHAIR GATTO  surmised  that even  if  the legislature  were                                                               
given  a  building,  there  would   still  be  costs  related  to                                                               
occupying  it,  which the  voters  would  have  to approve.    He                                                               
offered examples.                                                                                                               
REPRESENTATIVE NORMAN ROKEBERG,  Alaska State Legislature, stated                                                               
that he has  concerns about HB 48 because it  merely modifies the                                                               
[Frustrated  Responsible  Alaskans   Needing  Knowledge  (FRANK)]                                                               
Initiative.   He  said  he is  surprised that  the  issue of  all                                                               
bondable  costs  - which  he  said  is  "the  crux of  the  FRANK                                                               
Initiative"   -  has   not  been   addressed   in  the   proposed                                                               
legislation.  He  indicated that reparations to  the community of                                                               
Juneau for economic  losses would be defined as  a bondable cost.                                                               
That is  why the  costs are  so high.   He cautioned,  "If you're                                                               
going  to  modify this  particular  statute,  you might  want  to                                                               
confront  that issue."   He  said he  believes his  bill [HB  23]                                                               
should be  amended "to repeal  this particular provision  if it's                                                               
to   be  approved,"   because  the   decision   rests  with   the                                                               
legislature,  not a  vote  of  the people.    He offered  further                                                               
details.    He  stated,  "My  ultimate  conclusion  is  this  ...                                                               
particular  statute, and  even its  modification, would  keep the                                                               
capital in Juneau."                                                                                                             
10:21:32 AM                                                                                                                   
VICE CHAIR  GATTO stated the  intent of the  bill is to  say, "If                                                               
you're going to have something  about full bondable costs, it has                                                               
to be whether it's down the street or up to the next zip code."                                                                 
REPRESENTATIVE ROKEBERG said,  "I believe bondable cost  is a way                                                               
you  maintain the  status quo.   I  mean, that's  the key  to the                                                               
whole FRANK Initiative.  What you  need to do is repeal the FRANK                                                               
Initiative."  He indicated that  the face of the FRANK Initiative                                                               
makes  sense, because  the citizens  of the  state should  have a                                                               
voice  in how  much  to pay.    However, Representative  Rokeberg                                                               
explained, "The whole  price escalated to such a  degree, and the                                                               
debate and the campaign was  over this multi-billion dollar price                                                               
tag; it destroyed everything."                                                                                                  
REPRESENTATIVE GRUENBERG  stated for the  record that he  has not                                                               
been a  fan of the capital  move, because of the  economic effect                                                               
it would  have on Juneau  and [Southeast  Alaska].  He  said [the                                                               
legislature]  has "a  trust responsibility"  to everybody  in the                                                               
state.  More importantly, he stated,  "Wherever we sit has got to                                                               
be safe."                                                                                                                       
10:23:41 AM                                                                                                                   
VICE CHAIR GATTO said that  warnings of destroying the economy of                                                               
Southeast Alaska  by moving the capital  are exaggerated, because                                                               
Juneau  will still  have  a federal  building,  the Coast  Guard,                                                               
mining,  the university,  and  tourism.   A  proposal  to have  a                                                               
"simple hall" in  which the legislature meets for  four months is                                                               
not going to destroy Juneau.   In fact, he noted that some people                                                               
would enjoy Juneau more if it  were less crowded.  He pointed out                                                               
that where  one community may  lose, another stands to  gain, and                                                               
it's  not the  obligation of  the legislature  to say,  "We think                                                               
some  communities   ought  to  gain,   and  pick  it,   and  some                                                               
communities  ought to  lose, and  pick  it, but  rather have  the                                                               
process  be open."   He  noted  that Ketchikan  lost an  enormous                                                               
amount of  money when the pulp  mill shut down and  the community                                                               
has rallied and found a way  to survive.  He noted that Ketchikan                                                               
opened a shipyard and a plywood mill, for example.                                                                              
10:26:43 AM                                                                                                                   
REPRESENTATIVE  ELKINS said  he is  from Ketchikan  and disagrees                                                               
with Representative  Rokeberg's previous comments  regarding that                                                               
city.    He  said  there  would  be  no  shipyard  if  it  wasn't                                                               
subsidized by the legislature for  millions of dollars each year.                                                               
He said there  is no plywood mill, because the  one Ketchikan had                                                               
went  bankrupt.    He  emphasized that  [having  the  capital  in                                                               
Juneau] is  "a huge  economic engine" for  Southeast Alaska.   He                                                               
said many  of the  things Vice  Chair Gatto  listed, such  as the                                                               
federal building,  wouldn't remain in  Juneau if the  capital was                                                               
REPRESENTATIVE GRUENBERG said government works  like a clock or a                                                               
scale; the various  parts of it have  to be in balance  for it to                                                               
work.   The legislature  is the people's  check on  the executive                                                               
branch.   States that have  adopted term limits, he  opined, have                                                               
largely  upset  the  balance,  weakening  the  legislature.    He                                                               
emphasized the  importance of  having the  legislature be  in the                                                               
same city  as the executive branch,  so that the former  can hold                                                               
the latter  accountable in person, not  just over the phone.   He                                                               
indicated that  a legislative hall  is a capitol,  because that's                                                               
where the  legislature lives.   Representative Gruenberg  said he                                                               
is not aware of  any other city in the U.S.  or, for that matter,                                                               
anywhere in  the world, that  has separated its  legislature from                                                               
the rest of state government.                                                                                                   
VICE CHAIR  GATTO ascertained that there  was no one in  the room                                                               
or via teleconference wishing to testify.                                                                                       
[HB 48 was heard and held.]                                                                                                     

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