Legislature(2005 - 2006)HOUSE FINANCE 519
05/03/2006 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Confirmations | |
| SB188 | |
| SB289 | |
| SB317 | |
| SB274 | |
| SB271 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | SB 317 | TELECONFERENCED | |
| + | SB 274 | TELECONFERENCED | |
| + | SB 188 | TELECONFERENCED | |
| + | SB 289 | TELECONFERENCED | |
| + | SB 271 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
May 3, 2006
8:51 a.m.
CALL TO ORDER
Co-Chair Meyer called the House Finance Committee meeting to
order at 8:51:12 AM.
MEMBERS PRESENT
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Richard Foster
Representative Mike Hawker
Representative Jim Holm
Representative Reggie Joule
Representative Mike Kelly
Representative Beth Kerttula
Representative Carl Moses
Representative Bruce Weyhrauch
MEMBERS ABSENT
Representative Mike Chenault, Co-Chair
ALSO PRESENT
Linda Hall, Director, Division of Insurance, CCED; Scott J.
Nordstrand, Commissioner, Department of Administration;
Senator Fred Dyson; Senator Donny Olson; John MacKinnon,
Deputy Director, Department of Transportation and Public
Facilities; Peter Putzier, Senior Assistant Attorney
General, Transportation Section, Department of Law; Gary
Olson, Chairman, Alaska Moose Federation
PRESENT VIA TELECONFERENCE
Jim McMillian, Deputy Director of Credit & Business
Development, Alaska Industrial Development and Export
Authority (AIDEA)
SUMMARY
CONFIRMATIONS:
Alaska Mental Health Trust Authority Board Confirmations:
Laraine L. Derr, Juneau
Paula Easley, Anchorage
Roy Huhndorf, Anchorage
State Assessment Review Board:
Mary Keller
CSSB 289(FIN)
"An Act relating to the payment of insurer
examination expenses, to the regulation of managed
care insurance plans, to actuarial opinions and
supporting documentation for an insurer, to
insurance firms, managing general agents, and
third-party administrators, to eligibility of
surplus lines insurers, to prompt payment of
health care insurance claims, to required notice
by an insurer, to individual deferred annuities,
to mental health benefits under a health care
insurance plan, to the definitions of 'title
insurance limited producer' and of other terms
used in the title regulating the practice of the
business of insurance, and to small employer
health insurance; repealing the Small Employer
Health Reinsurance Association; making conforming
amendments; and providing for an effective date."
CSSB 289 (FIN) was REPORTED out of Committee with
a "no recommendation" and with zero fiscal note #1
by the Department of Commerce, Community and
Economic Development.
SB 317 "An Act relating to the purchase by the Alaska
Housing Finance Corporation of a parking garage in
Anchorage, Alaska and approving the issuance of
bonds for the purchase of that parking garage;
providing notice of, and authorizing the
commissioner of the Department of Administration
to enter into, a lease-purchase agreement with the
Alaska Housing Finance Corporation for that
parking garage; and providing for an effective
date."
SB 317 was REPORTED out of Committee with
individual recommendations and with fiscal note #1
by the Department of Administration.
CSSB 274(STA)
"An Act relating to the disposition of forfeited,
surplus, and unclaimed firearms by the state."
HCSSB 274 (FIN) was REPORTED out of Committee with
a "do pass" recommendation and with fiscal note #1
by the Department of Administration and with zero
fiscal note #2 by the Department of Public Safety.
CSSB 188(FIN)
"An Act relating to the maximum amount of loans
from the bulk fuel revolving loan fund to one
borrower in a fiscal year."
CSSB 188 (FIN) was REPORTED out of Committee with
a "do pass" recommendation and with zero fiscal
note #2 by Department of Commerce, Community and
Economic Development.
SB 271 "An Act authorizing the commissioner of
transportation and public facilities to
participate in certain federal highway programs
and relating to that authorization; relating to
powers of the attorney general to waive immunity
from suit in federal court related to those
programs; and providing for an effective date."
SB 271 was REPORTED out of Committee with a "no
recommendation" and with fiscal note #1 by the
Department of Transportation and Public
Facilities, and with zero fiscal note #2 by the
Department of Environmental Conservation.
8:52:08 AM
^CONFIRMATIONS
Alaska Mental Health Trust Authority Board Confirmations:
Laraine L. Derr, Juneau
Paula Easley, Anchorage
Roy Huhndorf, Anchorage
State Assessment Review Board:
Mary Keller
Co-Chair Meyer stated the names of the board confirmations
before the Committee.
Representative Foster MOVED to send the names to the floor
for consideration in joint session. There being NO
OBJECTION, it was so ordered.
8:53:17 AM
CS FOR SENATE BILL NO. 188(FIN)
"An Act relating to the maximum amount of loans from
the bulk fuel revolving loan fund to one borrower in a
fiscal year."
SENATOR DONNY OLSON related the purpose of SB 188. The bill
increases the cap on the bulk fuel revolving loan fund,
which was started in 1980 to allow small communities to
purchase fuel. The cap would increase from $300,000 to
$400,000 for individual communities and would allow up to
$1.5 million for organized communities.
Representative Kelly asked what the bad debt ratio currently
is. Senator Olson replied that there is money in the fund.
JIM MCMILLAN, DEPUTY DIRECTOR OF CREDIT AND BUSINESS
DEVELOPMENT (AIDEA), clarified that delinquencies are around
the 5 percent level.
Representative Hawker asked about a need to increase the
capitalization of the revolving loan fund.
Mr. McMillan replied that would not be a necessity for at
least a few years and is dependent on fuel price. The
amount of uncommitted cash available after the loans have
gone out has been from $1.5 million to $2 million. There is
no need for additional capitalization.
8:58:27 AM
Representative Foster MOVED to REPORT CSSB 188 (FIN) out of
Committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSSB 188 (FIN) was REPORTED out of Committee with a "do
pass" recommendation and with zero fiscal note #2 by
Department of Commerce, Community and Economic Development.
8:59:30 AM
CS FOR SENATE BILL NO. 289(FIN)
"An Act relating to the payment of insurer examination
expenses, to the regulation of managed care insurance
plans, to actuarial opinions and supporting
documentation for an insurer, to insurance firms,
managing general agents, and third-party
administrators, to eligibility of surplus lines
insurers, to prompt payment of health care insurance
claims, to required notice by an insurer, to individual
deferred annuities, to mental health benefits under a
health care insurance plan, to the definitions of
'title insurance limited producer' and of other terms
used in the title regulating the practice of the
business of insurance, and to small employer health
insurance; repealing the Small Employer Health
Reinsurance Association; making conforming amendments;
and providing for an effective date."
LINDA HALL, DIRECTOR, DIVISION OF INSURANCE, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, related that
the bill serves four purposes. It gives protection to
individuals in the area of health insurance and annuities
and provides for prompt payment of claims. It adopts NAIC
standards so consumers will not be excessively charged when
they choose not to resume services. It repeals the small
employer reinsurance association. The bill also provides
for the addition of actuarial opinion requirements for
domestic insurers. It changes licensing language to be
consistent with state standards, allows for increasing
electronic communication, and changes some definitions.
Co-Chair Meyer noted the zero fiscal note. He asked if the
Labor and Commerce Committee agrees with the bill. Ms. Hall
replied that Labor and Commerce sponsored the bill at her
request.
9:02:17 AM
Representative Foster MOVED to REPORT CSSB 289 (FIN) out of
Committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSSB 289 (FIN) was REPORTED out of Committee with a "no
recommendation" and with zero fiscal note #1 by the
Department of Commerce, Community and Economic Development.
9:03:43 AM
SENATE BILL NO. 317
"An Act relating to the purchase by the Alaska Housing
Finance Corporation of a parking garage in Anchorage,
Alaska and approving the issuance of bonds for the
purchase of that parking garage; providing notice of,
and authorizing the commissioner of the Department of
Administration to enter into, a lease-purchase
agreement with the Alaska Housing Finance Corporation
for that parking garage; and providing for an effective
date."
SCOTT J. NORDSTRAND, COMMISSIONER, DEPARTMENT OF
ADMINISTRATION, referred to a handout "Atwood Building
Parking Center" (copy on file.) He explained that Anchorage
is building a convention center downtown and wants to
acquire Block 80, which is valued at $4.6 million. An
agreement was made to swap half of Block 70 for half of
Block 80. The state accepted $2.3 million in cash for the
other half of Block 80. That left a shortage of parking in
Block 70. The state made an agreement with the municipality
for the right to park 149 cars in the JC Penney garage for
up to 7 years and for free parking during the construction
of a new parking garage. If, at the end of 7 years, the
state does not build a parking garage, the municipality has
the option to purchase back the property and they would have
to build a parking garage. Presently, there is a need for
about 1,000 parking spaces.
9:07:37 AM
Mr. Nordstrand referred to page 2 and listed the various
parking spaces currently available. The plan is to build a
parking garage on Block 70 that would accommodate up to 830
vehicles and with a skyway into the Atwood Building.
Mr. Nordstrand noted on page 5 the configuration of the
future parking plan. Alaska Housing Finance Corporation
(AHFC) owns the Atwood Building. The developer for the new
convention center will also be used for the new parking
garage in order to get the best possible price.
Construction on the new garage will begin next spring.
AHFC would issue debt and purchase from the municipality,
and the Department of Administration would lease the parking
facility from AHFC. The state will own it at the end of the
lease/debt payoff. The Department of Administration will
build the cost of the parking into the lease rate that is
charged to tenants in the facility.
9:10:41 AM
Mr. Nordstrand related the financial terms on page 7. AHFC
will bond up to $44 million and have a debt service of
$3,700,000 annual lease payments over 21 years. The debt
would be issued at the beginning of construction with
progress payments thereafter.
Mr. Nordstrand talked about the lease cost analysis on page
8. The new lease rate of $2.52 per square foot does not
reflect offsetting revenues and savings. He explained the
revenues and savings on page 9. He estimated that parking
costs would increase. The first floor of the facility will
be used for retail space and will be a source of income.
The convention center cash payment of $2.3 million is
available revenue. After hours parking revenue is estimated
to be $200,000 per year. The total when capitalized is
$23.5 million. Revenues and savings are estimated to reduce
the square foot cost for the parking center by half.
9:14:26 AM
Mr. Nordstrand summarized that there is a demand for more
parking and future cost and demand impacts are imminent.
The Atwood Parking Center would provide safety and
convenience for visitors and 1,000 state employees and other
tenants.
Representative Foster spoke in support of SB 317. He
recalled that a survey in the 80's showed 59 percent of
facilities were not taxed so the burden fell on the other 41
percent of the people. When the state owns facilities,
others have to pay for maintenance. Co-Chair Meyer recalled
when the state bought the Atwood building, which resulted in
a loss to the tax rolls. Mr. Nordstrand described this
transaction as a win/win situation that has the approval of
the city. Co-Chair Meyer commented that the taxpayers may
not be happy.
9:16:24 AM
Representative Kelly asked if there is a charge to park at
the lot. Mr. Nordstrand replied that there are so many
square feet allowed for state parking. He gave an example
of a lease facility with not enough parking. Atwood
employees have not been paying for parking. There are 930
free parking places presently.
Representative Kelly asked if that would be an issue in the
future. He agreed with the concern brought up by
Representative Foster and Co-Chair Meyer. He suggested
letting the people pay for it. Mr. Nordstrand said that
issue has not been looked at. He could see how it could be
a financial problem for employees. The norm is to not pay
for parking.
Representative Kelly cautioned that there is unfunded
liability. Mr. Nordstrand pointed out that the municipality
is planning to build more parking.
9:21:52 AM
Co-Chair Meyer asked if lease payments are shown on the
fiscal note. He asked about savings resulting from
consolidating parking. Mr. Nordstrand said that expense has
not been determined. Co-Chair Meyer asked who would pay for
maintenance of the parking garage. Mr. Nordstrand said the
Anchorage Parking Authority. He spoke of how security would
be handled. Those costs are unknown, but evening and
weekend parking could offset those expenses.
Co-Chair Meyer asked if there would be a walkway to the
Atwood Building. Mr. Nordstrand replied that the Atwood
Building was designed for such a skyway. There may be a
skyway to the Convention Center in the future.
9:25:03 AM
Co-Chair Meyer commented that the fiscal note has unknowns.
Representative Foster MOVED to REPORT SB 317 out of
Committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
SB 317 was REPORTED out of Committee with individual
recommendations and with fiscal note #1 by the Department of
Administration.
9:26:37 AM
CS FOR SENATE BILL NO. 274(STA)
"An Act relating to the disposition of forfeited,
surplus, and unclaimed firearms by the state."
SENATOR FRED DYSON explained that the bill makes it clear
how the state disposes of firearms. It clarifies that the
state has no additional liability for selling a firearm and
cannot destroy weapons in the manner that has been done in
the past. Guns that are illegal for the general public to
own are legal for a Class III dealer to own. The state can
continue to donate guns to museums and shooting clubs. When
there is no serial number the guns are disassembled and
parts can be made available. A constituent who had a non-
competitive bid experience requested the bill. The
Department of Public Safety and the Department of
Administration are in agreement with the bill.
Co-Chair Meyer asked if more money would be made as a result
of this bill. Senator Dyson replied yes.
9:30:42 AM
Representative Foster spoke in favor of the bill. He
related a personal experience with losing valuable guns.
Representative Hawker thanked the sponsor. He provided
history of a lawsuit that determined the state was losing
money. He spoke in favor of the bill.
Representative Joule asked if background checks would be
conducted. Senator Dyson said absolutely.
9:32:35 AM
Representative Hawker MOVED to ADOPT Conceptual Amendment 1
to add "municipalities" following "state" in every instance.
Representative Stoltze OBJECTED for purposes of discussion.
Representative Hawker explained that the amendment empowers
municipalities with the same power and responsibilities
provided to the state. It addresses legal protection and
allows indemnity of the municipality so it is not
discouraged from participating in the actions of this bill.
Senator Dyson asked if "municipalities" includes boroughs
and cities. Representative Hawker replied that is the
generic term used in statute. Representative Stoltze
suggested the term "political subdivisions". Senator Dyson
suggested that the drafters come up with wording to include
all classes of cities and municipalities.
Representative Hawker stated that the intent of the
amendment is to include all public entities, boroughs, and
all classes of cities and municipalities.
Representative Stoltze WITHDREW his OBJECTION. There being
NO OBJECTION, it was so ordered.
Representative Hawker read the definition of "municipality",
which seemed to satisfy the intent of the bill.
9:37:26 AM
Representative Foster MOVED to REPORT CSSB 274 (STA), as
amended, out of Committee with individual recommendations
and the accompanying fiscal notes. There being NO
OBJECTION, it was so ordered.
HCSSB 274 (FIN) was REPORTED out of Committee with a "do
pass" recommendation and with fiscal note #1 by the
Department of Administration and with zero fiscal note #2 by
the Department of Public Safety.
9:38:10 AM
SENATE BILL NO. 271
"An Act authorizing the commissioner of transportation
and public facilities to participate in certain federal
highway programs and relating to that authorization;
relating to powers of the attorney general to waive
immunity from suit in federal court related to those
programs; and providing for an effective date."
JOHN MACKINNON, DEPUTY DIRECTOR, DEPARTMENT OF
TRANSPORTATION AND PUBLIC FACILITIES, related aspects of the
National Environmental Policy Act (NEPA). Alaska is one of
five states participating in a federal pilot program
delegating the review and approval of NEPA documents and
related environmental approvals. The duration of the pilot
program is six years and is limited to highway projects. He
explained when the NEPA process is required for a
construction job. Most NEPA activity involves categorical
exclusions. The bill allows decisions to be made at the
state level, rather than at the federal level.
9:41:33 AM
Mr. MacKinnon addressed the fiscal notes. He noted that
federal funds pay 90 percent of the cost of the program.
Participation in this pilot project adds four positions to
Department of Transportation and Public Facilities and one
to the Department of Law.
Mr. MacKinnon referred to the sovereign immunity waiver.
Any suit brought against the state for a NEPA action can be
done in federal court. Mr. MacKinnon related two past
lawsuits, in which the state prevailed. He addressed
potential costs as a result of a potential lawsuit.
Mr. MacKinnon emphasized that the bill does not lessen
environmental protection.
9:44:21 AM
Representative Holm said he appreciates the local control
aspect. He noted that legislators don't have to assume
these duties until 2011 and wondered if it would it be
better to participate in the program right away. Mr.
MacKinnon clarified that the pilot program is scheduled to
sunset in 2011. The responsibilities of the program can be
assumed immediately. The state's liability does not apply
to any current NEPA action, only to environmental actions
assumed under the pilot program.
Representative Holm asked what the liability is for future
actions of state employees. He referred to past high costs
for court cases. He wondered what the potential liability
is.
Mr. MacKinnon replied that there is little potential for
liability. Representative Holm said his point is that it is
easier to sue in state court than in federal court. Mr.
MacKinnon replied that the pilot program requires any suits
to be brought in federal court. Representative Holm
countered that they would have to be defended in federal
court, which isn't the case today. Mr. MacKinnon continued
to explain that the benefits of the program outweigh any
potential liability.
Representative Holm said his concern is that there is no way
to "escape under those rules". He returned to the issue of
expense for silt litigation. He proposed great savings by
exercising common sense. Mr. MacKinnon agreed with
Representative Holm's frustrations regarding silt blankets
and fences.
Mr. MacKinnon referred to a graph that explained the effects
of federal environmental laws on transportation construction
delays.
9:50:32 AM
Co-Chair Meyer summarized that the benefits outweigh the
risks. He asked if the fiscal note requires four positions
to implement this bill. Mr. MacKinnon said yes.
Representative Kerttula asked how long it would take for the
federal government to turn the program over to the state.
Mr. MacKinnon said the federal government is now working on
the rules, but they are behind. He related the process of
turning the responsibility over to the state.
Representative Kerttula asked if Commissioner Barton prefers
to assume all responsibility. Mr. MacKinnon said that is
correct. Representative Kerttula asked if the state is
assuming anything yet. Mr. MacKinnon said not yet.
9:53:40 AM
Representative Kerttula asked how may cases the federal
government has to defend every year under NEPA.
PETER PUTZIER, SENIOR ASSISTANT ATTORNEY GENERAL,
TRANSPORTATION SECTION, DEPARTMENT OF LAW, responded with
details about two previous lawsuits within the last 20
years. Representative Kerttula said she had not considered
that a lawsuit could be a part of a group of claims.
Representative Kerttula asked what the state's role would be
for such a lawsuit. Mr. Putzier said the intent is to only
defend claims against NEPA.
GARY OLSON, CHAIRMAN, ALASKA MOOSE FEDERATION, related that
his organization appreciates the intent of the bill. He
recalled lawsuits down south because of animals on the
highways. He spoke of ways to prevent similar litigation
and listed steps to keep moose off highways.
9:58:56 AM
Representative Foster MOVED to REPORT SB 271 out of
Committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
SB 271 was REPORTED out of Committee with a "no
recommendation" and with fiscal note #1 by the Department of
Transportation and Public Facilities and with zero fiscal
note #2 by the Department of Environmental Conservation.
ADJOURNMENT
The meeting was adjourned at 9:59 AM.
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