Legislature(1993 - 1994)
03/15/1994 01:30 PM House FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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
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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.
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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."
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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.
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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
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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.
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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.
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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
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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.
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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.
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