Legislature(1995 - 1996)

05/02/1995 03:36 PM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 SSTA - 5/2/95                                                                 
        SB 163 APPROVE U OF A DEBT FOR STUDENT HOUSING                       
 SENATOR SHARP brings up SB 163 as the next order of business before           
 the Senate State Affairs Committee and calls the first witness.               
 JOSH FINK, Aide to Senator Kelly, prime sponsor of SB 163, states             
 he will testify on SB 163 and SCR 14 at the same time, since they             
 are on the same subject.  Both pieces of legislation have been                
 introduced to deal with the shortage of student housing in the                
 University of Alaska system.  The three campuses with serious                 
 housing shortages are Anchorage, Juneau, and Ketchikan.  The                  
 University, a number of legislators, and AHFC have been working               
 together to establish a loan agreement to meet the university's               
 housing needs.  AHFC's mission is to help meet the housing needs of           
 persons with low to moderate income, and most students are in that            
 group.  Mr. Fink thinks this agreement will be beneficial to all              
 parties involved.                                                             
 Number 467                                                                    
 SENATOR LEMAN asks, based on today's market rate for bonding, what            
 subsidy the university will be receiving at 3%.                               
 Number 470                                                                    
 MR. FINK responds there is a spreadsheet in members' bill packets             
 showing that information.                                                     
 DAN FAUSKE, Chief Executive Officer, Alaska Housing Finance                   
 Corporation, thinks the subsidy will be about $10,000,000 over the            
 life of the bond, which will be 25 years.                                     
 SENATOR LEMAN asks if this will commit the legislature to keeping             
 AHFC as an entity for 25 years.                                               
 CHAIRMAN SHARP responds that it would not do so any more than any             
 other bond issue does.  The chairman asks Mr. Fauske to give a                
 brief outline regarding SB 163 and SCR 14.                                    
 Number 492                                                                    
 MR. FAUSKE responds the loan would be a subsidized 3% loan, based             
 on a 6% coupon rate on the bonds for the life of the bonds.  Under            
 this scenario, the principal of the debt would be paid by housing,            
 food service, and other fees generated by the university.                     
 SENATOR LEMAN asks what the figure identified as $1,200,000 private           
 gift is.                                                                      
 MR. FINK replies that the intent is to solicit private funds.                 
 Number 513                                                                    
 WENDY REDMAN, Vice President, University of Alaska, states the                
 university strongly supports student housing.  SB 163 is integrally           
 linked with SB 143, which is currently in the Senate Finance                  
 Committee.  SB 143 provides for AHFC transfer agreements.  AHFC has           
 made it clear to the university that they will not be in any                  
 position to follow through on SB 163, unless AHFC's assets are                
 CHAIRMAN SHARP thinks bonding for student housing is a great                  
 possibility.  He does not need to be convinced, but there are                 
 others who still need convincing.                                             
 Number 537                                                                    
 SENATOR LEMAN informs Ms. Redman that he has been supportive of the           
 university in the past, but when things like the Judge Greene                 
 decision and the recent student vote on the Anchorage campus                  
 happen, it causes him to question whether supporting the university           
 is the right thing to do.  If he is to continue to support the                
 university, he would desire that those types of things not                    
 represent the university policy, or for that matter, even the bulk            
 of the students attending the university.  If that is true he would           
 be the first to bail out and invest the money somewhere else.                 
 Number 548                                                                    
 MS. REDMAN responds that if Senator Leman finds a way to possibly             
 control the courts in Alaska, she would be very interested in                 
 pursuing that with him.                                                       
 SENATOR RANDY PHILLIPS says the court system's budget could be cut.           
 CHAIRMAN SHARP thinks the legislature will have to look at some of            
 the smaller campuses, and decide if operating those campuses are              
 cost effective.                                                               
 Number 566                                                                    
 SENATOR LEMAN makes a motion to discharge SB 163 from the Senate              
 State Affairs Committee with individual recommendations.                      
 CHAIRMAN SHARP, hearing no objection, orders SB 163 released from             
 committee with individual recommendations.                                    

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