02/09/2005 01:30 PM Senate HEALTH, EDUCATION & SOCIAL SERVICES

3:14:13 PM                                                                                                                    
         SB  73-SCHOOL BOND REIMBURSEMENT/VIROLOGY LAB                                                                      
                                                                                                                              
CHAIR FRED DYSON announced SB 73 to be up for consideration.                                                                    
                                                                                                                                
DR.  RICHARD  MANDSAGER,  Director, Division  of  Public  Health,                                                               
Department of  Health and Social  Services (DHSS)  explained that                                                               
SB  73  deals  with  constructing   the  virology  laboratory  in                                                               
Fairbanks. He  proceeded with  a slide  presentation. He  gave an                                                               
example  of expeditious  virus  diagnoses  concerning last  years                                                               
Iditarod and the measles outbreak in Juneau.                                                                                    
                                                                                                                                
3:19:46 PM                                                                                                                    
The  staff  capabilities  Fairbanks  lab is  superb  despite  its                                                               
physical plant  problems. He said,  "It is  viewed as one  of the                                                               
best in the country" and  that moving the laboratory to Anchorage                                                               
would take two years of recruitment  to rebuild it to its current                                                               
capability.                                                                                                                     
                                                                                                                                
DR.  MANDSAGER related  that the  University is  also building  a                                                               
human biology  and genetics mission  and having a  Biopac Student                                                               
Laboratory  (BSL)   lab  on  campus   offers  a  great   deal  of                                                               
opportunity  for  researches  to   do  things  they  couldn't  do                                                               
otherwise. "So, last  summer as I was meeting with  UAF staff, to                                                               
say that the  biologists are excited about the  possibility of it                                                               
being up in Fairbanks is to  put it mildly!" A new facility would                                                               
also  give the  state more  surge capacity  for handling  a large                                                               
number  of samples.  It would  be connected  to the  new building                                                               
under  construction on  campus  and the  price  is $24.2  million                                                               
financed through certificates of participation (COP).                                                                           
                                                                                                                                
3:21:44 PM                                                                                                                    
SENATOR WILKEN asked who would own the building.                                                                                
                                                                                                                                
DR. MANDSAGER  replied that  the building would  be owned  by the                                                               
department,  but it  would  be located  on  University land.  The                                                               
University and department will have  a no-cost 30-year land lease                                                               
with  two 10-year  options. The  COPs are  for 15  years at  $2.3                                                               
million per year.                                                                                                               
                                                                                                                                
3:24:21 PM                                                                                                                    
SENATOR WILKEN moved to adopt Amendment 1.                                                                                      
                                                                                                                                
                          AMENDMENT 1                                                                                         
     TO: SB 73                                                                                                                  
                                                                                                                                
       Page 1, lines 2-3: Delete "on land provided by the                                                                       
     University of Alaska, Fairbanks,"                                                                                          
                                                                                                                                
     Page 1, line 11: Delete "provided" and insert "leased                                                                      
     from"                                                                                                                      
                                                                                                                                
     Page 1, line 12: Delete "by"                                                                                               
                                                                                                                                
CHAIR DYSON objected for discussion purposes.                                                                                   
                                                                                                                                
DR.  MANDSAGER explained  that after  SB 73  was introduced,  the                                                               
University  pointed out  that it  owned the  land the  department                                                               
would be leasing and this satisfies university interests.                                                                       
                                                                                                                                
CHAIR  DYSON  removed  his  objection.   There  were  no  further                                                               
objections and Amendment 1 was adopted.                                                                                         
                                                                                                                                
3:25:38 PM                                                                                                                    
TOM BOUTIN, Deputy Commissioner,  Department of Revenue, said the                                                               
debt does not  create a concern and offered to  talk about credit                                                               
issues and the fiscal note.                                                                                                     
                                                                                                                                
SENATOR  WILKEN asked  if  the  state paid  cash,  would it  save                                                               
$11,572,000 in reference to page 2, lines 18 through 20.                                                                        
                                                                                                                                
MR. BOUTIN  replied that is an  estimate of debt service  over 15                                                               
years  using a  comparable interest  rate. He  explained that  on                                                               
January  25,  the State  Bond  Committee  and the  Department  of                                                               
Revenue did a competitive sale of  debt, which was rated the same                                                               
as this  is, but at  a 10-year maturity.  Out of 10  bidders, the                                                               
winning  bid was  3.102 percent.  So, that  is why  he used  that                                                               
figure.                                                                                                                         
                                                                                                                                
SENATOR OLSON asked what entities are involved with the COPs.                                                                   
                                                                                                                                
MR.  BOUTIN  replied that  the  department  uses the  State  Bond                                                               
Committee.  The  commissioner  of  the  Department  of  Commerce,                                                               
Community &  Economic Development is the  chair, the commissioner                                                               
of  the Department  of Revenue  (DOR)  is the  secretary and  the                                                               
commission  of  the Department  of  Administration  is the  third                                                               
member. The staff work is performed by DOR contractors.                                                                         
                                                                                                                                
3:28:32 PM                                                                                                                    
JOHN BLAKE,  Director, Office  of Research  Integrity, University                                                               
of  Alaska Fairbanks  strongly supported  SB 73  and keeping  the                                                               
virology lab in  Fairbanks. The north end of  the campus building                                                               
was designed  with the intent  that the state virology  lab would                                                               
be attached to it.                                                                                                              
                                                                                                                                
SENATOR  OLSON asked  him to  advise the  committee about  future                                                               
recruitment efforts for professional staff to UAF.                                                                              
                                                                                                                                
MR.  BLAKE  replied  that  his  primary focus  is  to  move  into                                                               
infectious disease  research and the University  has good funding                                                               
from  the  National  Institute  of Health.  He  expects  work  to                                                               
increase and integration  to occur even more with  the arrival of                                                               
the state lab.                                                                                                                  
                                                                                                                                
3:31:30 PM                                                                                                                    
SENATOR WILKEN  moved to  pass CSSB  73(HES) from  committee with                                                               
individual recommendations  and attached fiscal note.  There were                                                               
no objections and it was so ordered.