Legislature(1993 - 1994)

03/15/1994 01:30 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                                                                               
                     HOUSE FINANCE COMMITTEE                                   
                         March 15, 1994                                        
                            1:30 p.m.                                          
                                                                               
  TAPE HFC 94-62, Side 2, #000 - end.                                          
  TAPE HFC 94-63, Side 1, #000 - end.                                          
  TAPE HFC 94-63, Side 2, #000 - 480.                                          
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Co-Chair Larson called the House  Finance Committee to order                 
  at 1:30 p.m.                                                                 
                                                                               
  PRESENT                                                                      
                                                                               
  Co-Chair Larson             Representative Hoffman                           
  Co-Chair MacLean            Representative Martin                            
  Vice-Chair Hanley                                                            
  Representative Brown        Representative Parnell                           
  Representative Foster       Representative Therriault                        
  Representative Grussendorf                                                   
                                                                               
  Representative Navarre was not present for the meeting.                      
                                                                               
  ALSO PRESENT                                                                 
                                                                               
  Representative  Jeannette  James;  Jeanne Peschier,  Kodiak;                 
  Irene Moreland, Wasilla; Lona Olson,  Wasilla; Jared Zitwer,                 
  Anchorage;  Sylvia  Berg,  King Cove;  Paul  Habighorst Jr.,                 
  Soldotna;   Beatrice   Rose,  Anchorage;   Jan  McGillivary,                 
  Coordinator, Building  Bridges Campaign;  Leo Land,  Haines;                 
  Clyde  Stoltzfus, Department  of  Transportation and  Public                 
  Facilities;  Llewellyn  Lutchansky,  Alaska  Permanent  Fund                 
  Corporation; Leslie Swanson, Juneau;  Juanita Hensley, Chief                 
  Driver Services, Division  of Motor Vehicles, Department  of                 
  Public Safety.                                                               
                                                                               
  SUMMARY INFORMATION                                                          
                                                                               
  PRESENTATION BY "BRIDGES"                                                    
                                                                               
  HB 183    "An   Act   directing   the   identification   and                 
            delineation  of  a   transportation  and   utility                 
            corridor   between   Fairbanks   and  the   Seward                 
            Peninsula for road, rail, pipeline, and electrical                 
            transmission  purposes;  and   providing  for   an                 
            effective date."                                                   
                                                                               
            CSHB 183 (FIN) was reported  out of Committee with                 
            "no recommendation"  and with a fiscal impact note                 
            by the House Finance Committee                                     
                                                                               
                                                                               
                                1                                              
                                                                               
                                                                               
  HB 373    "An Act relating to  investments of the  permanent                 
            fund  involving  equity  interests  in  and   debt                 
            obligations secured  by mortgages on  real estate;                 
            and providing for an effective date."                              
                                                                               
            HB 373  was reported out  of Committee with  a "do                 
            pass" recommendation and  with a zero fiscal  note                 
            by the Department of Revenue, published 3/7/94.                    
                                                                               
  HB 407    "An Act relating to issuance of commemorative gold                 
            rush motor vehicle license plates."                                
                                                                               
            CSHB 407 (FIN)  was HELD in Committee  for further                 
            discussion.                                                        
                                                                               
  HB 529    "An  Act  amending  the   medical  assistance  and                 
            community   developmental    disabilities   grants                 
            appropriations in sec.  38, ch. 65, SLA  1993; and                 
            providing for an effective date."                                  
                                                                               
            HB  529 was reported  out of Committee  with a "do                 
            pass" recommendation.                                              
                                                                               
  Co-Chair  Larson  provided  members with  a  proposed  House                 
  Finance Committee bill  (copy on file).   He noted that  "An                 
  Act providing for an advisory vote of the  people concerning                 
  preferred alternatives  for increasing revenue  available to                 
  support state  government" would  be introduced  as a  House                 
  Finance Committee.  There were no objections to introduction                 
  of the legislation by members.                                               
                                                                               
  PRESENTATION BY "BRIDGES"                                                    
                                                                               
  JAN  MCGILLIVARY,  COORDINATOR,  BUILDING  BRIDGES  CAMPAIGN                 
  explained that the Building Bridges  Campaign is a coalition                 
  of rural and  urban mental health consumers,  family members                 
  and  mental  health providers.    It  began  as  a  steering                 
  committee  formed  through  the   grass  roots  movement  of                 
  consumers.  She provided members with the  FY 95 legislative                 
  priorities of the Building Bridges Campaign (copy on file).                  
                                                                               
  JEANNE PESCHIER,  KODIAK recounted her  personal experiences                 
  as a mental health consumer.   She noted the stigma attached                 
  to mental illness and the  difficulty in finding assistance.                 
  She  received care through  the Kodiak Crisis  Respite.  She                 
  observed that the  Kodiak Crisis Respite has been closed due                 
  to  the lack of  funding.  She  pointed out that  the Alaska                 
  Psychiatric  Institute  (API) is  the  only alternative  for                 
  those seeking care in Kodiak.  She emphasized the importance                 
  of  transitional housing,  legal  assistance and  vocational                 
  rehabilitation.   She  urged understanding  for  those  with                 
  mental illness.                                                              
                                                                               
                                2                                              
                                                                               
                                                                               
  IRENE MORELAND, WASILLA  shared her experiences as  a mental                 
  health client  and mother  of three.   All  of her  children                 
  suffer from  Attention Deficit Syndrome  and other emotional                 
  and  learning  difficulties.   She  described  their  living                 
  conditions before receiving assistance.   She noted that the                 
  lives  of  her and  her children  have improved  through the                 
  support  given them.    She urged  that  funding for  mental                 
  health programs be protected.                                                
                                                                               
  LONA  OLSON,  WASILLA testified  in  support of  funding for                 
  mental health  programs.   She asserted  that mental  health                 
  consumers need to  have safe,  secure places to  live.   She                 
  noted  the  help  she  received  through the  mental  health                 
  support system.                                                              
                                                                               
  JARED ZITWER, ANCHORAGE related his personal experience with                 
  the  Alaska Psychiatric  Institute, Mental  Health Providers                 
  for Alaska and  South Central Counseling Services.  He noted                 
  that  his  condition  has  improved   through  the  care  he                 
  received.                                                                    
                                                                               
  SYLVIA BERG, KING COVE  shared her experience as the  sister                 
  of a mental health consumer.   She emphasized the stress and                 
  frustration  that family  members  feel when  mental illness                 
  affects a loved one.   Her brother has received care  and is                 
  currently living in transitional housing.                                    
                                                                               
  PAUL HABIGHORST JR., SOLDOTNA explained that he suffers from                 
  paranoid  schizophrenia.   He  showed  drawings he  had made                 
  while  in the paranoid state.  He stressed that the love and                 
  support of mental health providers  and consumers helped him                 
  overcome the "silent scream."                                                
                                                                               
  BEATRICE  ROSE,  ANCHORAGE  testified  in favor  of  funding                 
  mental health care.   Her son committed suicide.   She tried                 
  to  explain his feelings and  the feelings of other mentally                 
  ill  persons.  She suggested that life  seems as if there is                 
  "no  color,  no  hope".    She  stressed   that  mental  and                 
  emotionally ill persons need support.                                        
                                                                               
  Ms.  McGillivary   summarized  that  the   Building  Bridges                 
  Campaign supports the funding requests  of the Alaska Mental                 
  Health Trust Board.                                                          
  HOUSE BILL NO. 529                                                           
                                                                               
       "An Act amending  the medical assistance  and community                 
       developmental  disabilities  grants  appropriations  in                 
       sec.  38, ch.  65,  SLA  1993;  and  providing  for  an                 
       effective date."                                                        
                                                                               
                                                                               
                                3                                              
                                                                               
                                                                               
  Representative  Parnell  MOVED  to  report  HB  529  out  of                 
  Committee  with individual recommendations.   There being NO                 
  OBJECTION, it was so ordered.                                                
                                                                               
  HB  529  was reported  out  of  Committee with  a  "do pass"                 
  recommendation.                                                              
  HOUSE BILL NO. 373                                                           
                                                                               
       "An Act relating  to investments of the  permanent fund                 
       involving equity  interests  in  and  debt  obligations                 
       secured by mortgages on real  estate; and providing for                 
       an effective date."                                                     
                                                                               
  LEO LAND, HAINES testified against HB 373.  He asserted that                 
  permanent fund money should be left where it is safe.                        
                                                                               
  (Tape Change, HFC 94-63, Side 1)                                             
                                                                               
  LLEWELLYN W.  LUTCHANSKY,  ASSISTANT  REAL  ESTATE  OFFICER,                 
  ALASKA  PERMANENT FUND  CORPORATION,  DEPARTMENT OF  REVENUE                 
  testified  in  support of  HB 373.    She observed  that the                 
  Alaska  Permanent   Fund  Corporation   Board  of   Trustees                 
  unanimously passed  a resolution  requesting that  state law                 
  governing real estate  investments be changed.   Current law                 
  restricts  ownership  to  40  percent  of  the  value of  an                 
  investment  in  real  estate.    The Alaska  Permanent  Fund                 
  Corporation  Board is requesting that  they be allowed up to                 
  100 percent interest in  an investment in real estate.   She                 
  observed that the  Corporation has over one  billion dollars                 
  in real estate investments.                                                  
                                                                               
  Ms. Lutchansky noted that the Corporation entered into eight                 
  real estate deals with an average  investment of $18 million                 
  dollars,  in  the  past year.    She  observed  that if  the                 
  Corporation were to  invest 10 percent  of the Fund in  real                 
  estate, under current restrictions, they would have to enter                 
  into 31 deals by the end of the fiscal year.  She emphasized                 
  that  the Corporation has  never entered  into more  than 10                 
  real estate deals in one year.                                               
                                                                               
  Representative  Brown  clarified  that the  Corporation  has                 
  chosen not  to invest  more than 10  percent of the  Fund in                 
  real estate. Statutes allow up to  15 percent of the Fund to                 
  be invested in real estate.  Current real estate investments                 
  are approximately 7 percent of market value.                                 
                                                                               
  Ms. Lutchansky stressed that it is difficult to protect real                 
  estate  investments  when  the  Corporation  is  a  minority                 
  holder.                                                                      
                                                                               
  In  response  to   a  question  by  Co-Chair   MacLean,  Ms.                 
                                                                               
                                4                                              
                                                                               
                                                                               
  Lutchansky indicated that revisions being made to the senate                 
  companion bill would be acceptable  by the Corporation.  The                 
  senate companion would  allow 100  percent ownership of  the                 
  investment  to  be   made,  up  to  $100   million  dollars.                 
  Investments beyond  $100 million  dollars could  be held  at                 
  66.75 percent.                                                               
                                                                               
  In  response  to  a question  by  Representative  Brown, Ms.                 
  Lutchansky  clarified  that  the  change  would  bring  more                 
  proposals for investment  in Alaska to the Corporation.  She                 
  emphasized that Alaskan investments must be competitive.                     
                                                                               
  Representative  Grussendorf  noted that  investment research                 
  completed by the Board is often used by other investors.                     
                                                                               
  Representative Therriault express  concern that the  request                 
  for 100 percent investment  is being made in order  to reach                 
  the 10 percent real estate investment ratio.  Ms. Lutchansky                 
  emphasized that the Board is attempting to follow the modern                 
  investment portfolio  theory to  diversify.   Representative                 
  Therriault  suggested  that  100  percent  investment  would                 
  result in  greater risk  to  the investor.   Ms.  Lutchansky                 
  replied that one of the biggest  risks is not having control                 
  of assets.   She observed that  it is difficult to  convince                 
  partners to sell  property at  the time  the Board  desires.                 
  She noted  that flexibility to  buy out properties  would be                 
  beneficial.                                                                  
                                                                               
  Co-Chair MacLean expressed concern with allowing 100 percent                 
  ownership of real estate.   Ms. Lutchansky related that  the                 
  senate companion is  better than  current limitations.   Ms.                 
  Lutchansky noted  that other large funds do not have similar                 
  limitations.                                                                 
                                                                               
  In  response  to a  question  by Representative  Hanley, Ms.                 
  Lutchansky clarified that the  100 million limitation  would                 
  allow seven tenths of one percent of the Fund to be invested                 
  into one real estate deal.                                                   
                                                                               
  Representative Martin spoke in support of  HB 373.  He noted                 
  that  the Alaska  Permanent Fund Corporation  represents the                 
  elite in prudent investors.  He  suggested that the Board be                 
  given the freedom to invest as they see best.                                
                                                                               
  Co-Chair  Larson reviewed  the historical  background of  HB
  373.   He noted that  the Fund  has matured  to $16  billion                 
  dollars.  He spoke in favor of HB 373.  He asserted that the                 
  Board has done a good job and should be allowed flexibility.                 
                                                                               
  LESLIE SWANSON,  EX-REPRESENTATIVE, JUNEAU observed  that he                 
  was the original sponsor of  legislation creating the Alaska                 
  Permanent Fund.   He  cautioned that  real estate  is not  a                 
                                                                               
                                5                                              
                                                                               
                                                                               
  stable investment.                                                           
                                                                               
  Representative Grussendorf  MOVED to  report HB  373 out  of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal  note.  There being NO OBJECTION, it was                 
  so ordered.                                                                  
                                                                               
  HB  373  was reported  out  of  Committee with  a  "do pass"                 
  recommendation and with a zero fiscal note by the Department                 
  of Revenue, published 3/7/94.                                                
  HOUSE BILL NO. 183                                                           
                                                                               
       "An Act directing the identification and delineation of                 
       a transportation and utility corridor between Fairbanks                 
       and the Seward Peninsula for  road, rail, pipeline, and                 
       electrical transmission purposes; and providing for  an                 
       effective date."                                                        
                                                                               
  REPRESENTATIVE  JEANNETTE  JAMES  provided  members  with  a                 
  proposed committee substitute, work draft #8-LS0296\U, dated                 
  1/18/94  (copy on  file).   She noted  that page  1, line  7                 
  removes "Northern  region".  She  stressed the need  to look                 
  toward the  future transportation needs  of the state.   She                 
  emphasized that Fairbanks is the end of the railroad.    She                 
  observed that she is not requesting funding for the corridor                 
  delineation at this time.                                                    
                                                                               
  Representative  James  referred  to  concerns  by   Co-Chair                 
  MacLean  regarding  the   inclusion  of  "a  road"   in  the                 
  contemplation of the corridor.  She  stated that she did not                 
  object to the deletion of "a road".                                          
                                                                               
  Co-Chair MacLean stated that she supports the concept of the                 
  legislation.  She explained that her reservations are that a                 
  road through the villages could have severe social impact.                   
                                                                               
  Representative Brown expressed concern with the inclusion of                 
  "an  electrical transmission  line".   Representative  James                 
  clarified that, currently, there is no intention to build  a                 
  line.  Representative Brown suggested  that the inclusion of                 
  language identifying  an electrical transmission  line could                 
  provide undue  momentum for  the building  of a  line.   She                 
  stressed that energy needs of the state should first look to                 
  the resources  at hand  and provide  the least  cost to  the                 
  consumer.                                                                    
                                                                               
  Representative James assured her that  her prime interest is                 
  to  assure  that   authorization  exists   for  a   corridor                 
  accommodating a railroad.  She stressed the need to plan for                 
  the future.                                                                  
                                                                               
                                                                               
                                6                                              
                                                                               
                                                                               
  Representative   Hanley   expressed    concern   that    the                 
  Commissioner of  Department  of  Transportation  and  Public                 
  Facilities  could use  the authorization  to expend  federal                 
  funds  on  the  project  without legislative  appropriation.                 
  Members  discussed  the  Commissioner's  ability  to   spend                 
  federal funds.                                                               
                                                                               
  Representative James suggested that "subject to  legislative                 
  appropriation" be added.                                                     
                                                                               
  Representative Therriault spoke in support of the  retention                 
  of "an electrical transmission line."                                        
                                                                               
  Representative Hanley  clarified that  the legislature  must                 
  give authorization for the spending of federal funds.                        
                                                                               
  Representative  Brown  referred to  the  fiscal note  by the                 
  Department  of Transportation  and  Public Facilities.   She                 
  noted that the fiscal note requests funding for FY 95 and FY                 
  96.   Representative James  stated that  she did  not intend                 
  that there  be authorization  of money  associated with  the                 
  legislation.                                                                 
                                                                               
  Co-Chair Larson  suggested that language  on page 1,  line 9                 
  through 14 be  deleted from the  committee substitute.   Co-                 
  Chair  MacLean  added that  "for  road, rail,  pipeline, and                 
  electrical  transmission purposes;"  would  also be  deleted                 
  from the title.  Representative James expressed concern that                 
  the corridor meet the  criteria  needed to build a railroad.                 
  Co-Chair Larson pointed out that  page 2, line 2  guarantees                 
  that  "the  railroad  alignment   and  identification  of  a                 
  railroad right-of-way  of not less than 500 feet shall guide                 
  the identification and delineation of the corridor".                         
                                                                               
  Co-Chair  MacLean  MOVED to  AMEND, work  draft #8-LS0296\U,                 
  dated 1/18/94 to delete on page 1, line 2 and 3,  "for road,                 
  rail, pipeline, and  electrical transmission purposes;"  and                 
  to  insert  on  page  1,  line  7  "Subject  to  legislative                 
  appropriation" and to  delete after  "Peninsula" on page  1,                 
  lines  9 through 14.   There being  NO OBJECTION,  it was so                 
  ordered.                                                                     
                                                                               
  Co-Chair MacLean expressed  concern that potential  negative                 
  social impacts of nearby communities be considered.  She did                 
  not offer  Amendment 2  which would have  required that  the                 
  Department   consider   these   concerns.     Representative                 
  Therriault clarified that impact of nearby communities would                 
  be  considered  under  public  input  when  construction  is                 
  proposed.                                                                    
                                                                               
  Co-Chair  MacLean  asked the  significance  of the  AS 38.05                 
  citation on page 2, line 29.                                                 
                                                                               
                                7                                              
                                                                               
                                                                               
  CLYDE  STOLTZFUS, DEPARTMENT  OF  TRANSPORTATION AND  PUBLIC                 
  FACILITIES  suggested that  the citation  would prevent  the                 
  Department of Natural  Resources from taking state  land out                 
  of multiple use.                                                             
                                                                               
  Representative Brown questioned if the process authorized by                 
  the committee  substitute would  be handled  outside of  the                 
  normal land classification procedures outlined in  AS 38.05.                 
  She  asked   if  classification   required  public   notice.                 
  Representative James assured her that no construction  would                 
  take place without public input.  Any  project using federal                 
  funds would require an environmental impact statement.                       
                                                                               
  CSHB  183  (FIN) was  HELD  in  Committee to  allow  further                 
  clarification of the citation to AS 38.05.                                   
  HOUSE BILL NO. 407                                                           
                                                                               
       "An Act relating to issuance of commemorative gold rush                 
       motor vehicle license plates."                                          
                                                                               
  Co-Chair  Larson  noted  that CSHB  407  (STA)  authorizes a                 
  license plate  to be designed  to commemorate the  gold rush                 
  period of the state.                                                         
                                                                               
  JAUNITA  HENSLEY, CHIEF  DRIVER SERVICES, DIVISION  OF MOTOR                 
  VEHICLES, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES                 
  explained  that  CSHB 407  (STA)  would replace  the general                 
  issue  plate with the  commemorative gold  rush plate.   She                 
  noted that  the original bill would authorize  the design of                 
  an additional gold rush commemorative  plate.  She explained                 
  that HB 407 would require an additional inventory of plates.                 
  She observed that the Division of Motor Vehicles proposed to                 
  make the gold rush design plate  the general issue plate for                 
  four years.   The House State Affairs Committee  amended the                 
  Division's  proposal  to  make  the   gold  rush  plate  the                 
  permanent general issue plate.                                               
                                                                               
  Co-Chair MacLean and Representative Hanley spoke in favor of                 
  the original version of HB 407.                                              
                                                                               
  Ms. Hensley noted that vanity plates  cost between $6.50 and                 
  $8.00 dollars  for a set.   She  observed that a  $30 dollar                 
  vanity   plate  fee  would  cover  the  cost  of  the  plate                 
  issuances.                                                                   
                                                                               
  Representatives Parnell and  Martin spoke in support  of the                 
  original version of HB 407.                                                  
                                                                               
  Ms. Hensley clarified that gold rush centennial celebrations                 
  begin in 1996  and continue for  ten years to cover  all the                 
                                                                               
                                8                                              
                                                                               
                                                                               
  gold discoveries in Alaska.                                                  
                                                                               
  Representative  Brown asked  the  status  of the  Division's                 
  attempt to redesign  the general issue  plate.  Ms.  Hensley                 
  noted that the Division's efforts to change the plate failed                 
  in the previous  legislature.  She stated  that the Division                 
  has no intention to redesign the general issue plate.                        
                                                                               
  Co-Chair  Larson spoke in support of the original version of                 
  HB 407.                                                                      
                                                                               
  Representative  Foster MOVED to  report HB  407, with  a $30                 
  vanity fee, out of Committee with individual recommendations                 
  and with the  accompanying fiscal  note.  Members  indicated                 
  their approval of the $30 dollar  vanity fee for issuance of                 
  commemorative gold rush plates.                                              
                                                                               
  Representative Brown questioned if language would be  needed                 
  to place the  commemorative gold rush  plates in the  vanity                 
  fee list in AS 28.10.421 at $30.0 dollars.                                   
                                                                               
  Discussion pursued regarding  the need to draft  a committee                 
  substitute to  establish a  fee for  the commemorative  gold                 
  rush plate.                                                                  
                                                                               
  HB 407 was HELD in Committee for further discussion.                         
  HOUSE BILL NO. 183                                                           
                                                                               
       "An Act directing the identification and delineation of                 
       a transportation and utility corridor between Fairbanks                 
       and the Seward Peninsula for  road, rail, pipeline, and                 
       electrical transmission purposes;  and providing for an                 
       effective date."                                                        
                                                                               
  Representative  James  noted  that  she  had  discussed  the                 
  intent, by  the drafter, for the inclusion of AS 38.05.  She                 
  referred  to  page  2,  line  14.    She  noted  that  after                 
  identifying the corridor the Department of Natural Resources                 
  will  make  the  land  available.    She  stressed  that the                 
  language on page 2, line 29 is to assure that the process of                 
  reclassification of land  for the corridor be  excluded from                 
  AS 38.05 until construction is proposed.                                     
                                                                               
  Representative  Brown   asked  why  language   allowing  the                 
  rejection of a  corridor was  included on line  17, page  2.                 
  Representative  Parnell suggested  that  the language  would                 
  allow the  corridor to be rejected if it  is not used in the                 
  future.                                                                      
                                                                               
  Co-Chair  MacLean  suggested  that the  fiscal  note  by the                 
  Department of Transportation and Public Facilities be zero.                  
                                                                               
                                9                                              
                                                                               
                                                                               
  Co-Chair  MacLean MOVED  to  report CSHB  183  (FIN) out  of                 
  Committee with  individual recommendations  and with  a zero                 
  fiscal note.  There being NO OBJECTION, it was so ordered.                   
                                                                               
  CSHB  183  (FIN) was  reported  out  of Committee  with  "no                 
  recommendation" and with a  fiscal impact note by  the House                 
  Finance Committee                                                            
  ADJOURNMENT                                                                  
                                                                               
  The meeting adjourned at 3:30 p.m.                                           
                                                                               
                                                                               
                               10                                              

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