05/04/2004 01:21 PM House RLS
| Audio | Topic |
|---|
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE RULES STANDING COMMITTEE
May 4, 2004
1:21 p.m.
MEMBERS PRESENT
Representative Norman Rokeberg, Chair
Representative Pete Kott
Representative John Coghill
Representative Lesil McGuire
Representative Carl Morgan
Representative Ethan Berkowitz
Representative Beth Kerttula
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Senator Ben Stevens
Senator Gene Therriault
Senator Thomas Wagoner
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 136(FIN) am
"An Act relating to a mandatory property tax exemption for
certain private property interests on military bases or
installations; relating to an optional exclusion or exemption
from municipal taxation for residential property; relating to an
exemption from and deferral of municipal property taxes on
certain types of deteriorated property; and providing for an
effective date."
- MOVED CSSB 136(FIN) am OUT OF COMMITTEE
SENATE BILL NO. 340
"An Act relating to the detention of delinquent minors in
correctional facilities; relating to emergency detention of
minors for evaluation for involuntary admission for mental
health treatment; relating to detention of intoxicated minors
and minors incapacitated by alcohol or drugs; and providing for
an effective date."
- MOVED SB 340 OUT OF COMMITTEE
SENATE BILL NO. 358
"An Act relating to the performance of railroad track
construction work for the Department of Transportation and
Public Facilities by the Alaska Railroad Corporation."
- MOVED SB 358 OUT OF COMMITTEE
HOUSE BILL NO. 404
"An Act relating to the Alaska Commission on Postsecondary
Education; relating to the Alaska Student Loan Corporation;
relating to bonds of the corporation; relating to loan and grant
programs of the commission; relating to an exemption from the
State Procurement Code regarding certain contracts of the
commission or corporation; making conforming changes; and
providing for an effective date."
- MOVED CSHB 404(RLS) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SB 136
SHORT TITLE: MUNICIPAL PROPERTY TAX EXEMPTIONS
SPONSOR(S): COMMUNITY & REGIONAL AFFAIRS
03/10/03 (S) READ THE FIRST TIME - REFERRALS
03/10/03 (S) CRA, FIN
03/17/03 (S) CRA AT 1:30 PM FAHRENKAMP 203
03/17/03 (S) Heard & Held
03/17/03 (S) MINUTE(CRA)
04/02/03 (S) CRA AT 1:30 PM FAHRENKAMP 203
04/02/03 (S) Moved Out of Committee
04/02/03 (S) MINUTE(CRA)
04/04/03 (S) CRA RPT 1DP 4NR
04/04/03 (S) DP: WAGONER; NR: STEVENS G, LINCOLN,
04/04/03 (S) ELTON, TAYLOR
04/10/03 (S) FIN AT 9:00 AM SENATE FINANCE 532
04/10/03 (S) Heard & Held
04/10/03 (S) MINUTE(FIN)
02/11/04 (S) FIN AT 9:00 AM SENATE FINANCE 532
02/11/04 (S) Not Heard
04/27/04 (S) FIN RPT CS FORTHCOMING 4DP 3NR
04/27/04 (S) DP: GREEN, WILKEN, DYSON, STEVENS B;
04/27/04 (S) NR: HOFFMAN, OLSON, BUNDE
04/27/04 (S) FIN AT 9:00 AM SENATE FINANCE 532
04/27/04 (S) Moved CSSB 136(FIN) Out of Committee
04/27/04 (S) MINUTE(FIN)
04/28/04 (S) FIN CS RECEIVED NEW TITLE
05/03/04 (S) TRANSMITTED TO (H)
05/03/04 (S) VERSION: CSSB 136(FIN) AM
05/04/04 (H) RLS AT 1:00 PM CAPITOL 124
BILL: SB 340
SHORT TITLE: DETENTION OF MINORS
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
02/16/04 (S) READ THE FIRST TIME - REFERRALS
02/16/04 (S) HES, JUD
03/03/04 (S) HES AT 1:30 PM BUTROVICH 205
03/03/04 (S) Moved SB 340 Out of Committee
03/03/04 (S) MINUTE(HES)
03/04/04 (S) HES RPT 3DP
03/04/04 (S) DP: DYSON, GREEN, WILKEN
03/19/04 (S) JUD AT 8:00 AM BUTROVICH 205
03/19/04 (S) Heard & Held
03/19/04 (S) MINUTE(JUD)
03/31/04 (S) JUD RPT 2DP 2NR
03/31/04 (S) DP: SEEKINS, THERRIAULT; NR: FRENCH,
03/31/04 (S) OGAN
03/31/04 (S) JUD AT 8:00 AM BUTROVICH 205
03/31/04 (S) Moved SB 340 Out of Committee
03/31/04 (S) MINUTE(JUD)
04/29/04 (S) TRANSMITTED TO (H)
04/29/04 (S) VERSION: SB 340
04/30/04 (H) READ THE FIRST TIME - REFERRALS
04/30/04 (H) RLS
04/30/04 (H) HB 487 SIMILAR BILL
05/04/04 (H) RLS AT 1:00 PM CAPITOL 124
BILL: SB 358
SHORT TITLE: ALASKA RAILROAD TRACK WORK
SPONSOR(S): TRANSPORTATION
03/03/04 (S) READ THE FIRST TIME - REFERRALS
03/03/04 (S) TRA, L&C
03/04/04 (H) TRA AT 1:30 PM CAPITOL 17
03/04/04 (H) -- Meeting Canceled --
03/05/04 (S) TRA RPT 3DP 2NR
03/05/04 (S) DP: WAGONER, COWDERY,THERRIAULT
03/05/04 (S) NR: LINCOLN, OLSON
03/23/04 (S) L&C AT 1:30 PM BELTZ 211
03/23/04 (S) Heard & Held
03/23/04 (S) MINUTE(L&C)
04/01/04 (S) L&C AT 1:30 PM BELTZ 211
04/01/04 (S) <Bill Hearing Postponed>
04/13/04 (S) L&C AT 1:30 PM BELTZ 211
04/13/04 (S) -- Meeting Canceled --
04/15/04 (S) L&C AT 1:30 PM BELTZ 211
04/15/04 (S) Moved SB 358 Out of Committee
04/15/04 (S) MINUTE(L&C)
04/16/04 (S) L&C RPT 2DP 2NR
04/16/04 (S) DP: BUNDE, SEEKINS
04/16/04 (S) NR: DAVIS, FRENCH
04/20/04 (S) TRANSMITTED TO (H)
04/20/04 (S) VERSION: SB 358
04/21/04 (H) READ THE FIRST TIME - REFERRALS
04/21/04 (H) RLS
04/21/04 (H) HB 529 SIMILAR BILL
05/04/04 (H) RLS AT 1:00 PM CAPITOL 124
BILL: HB 404
SHORT TITLE: STUDENT LOANS /EDUC. FACILITIES BONDS
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
01/28/04 (H) READ THE FIRST TIME - REFERRALS
01/28/04 (H) EDU, HES, FIN
02/19/04 (H) EDU REFERRAL WAIVED
02/19/04 (H) HES AT 3:00 PM CAPITOL 106
02/19/04 (H) Moved CSHB 404(HES) Out of Committee
02/19/04 (H) MINUTE(HES)
02/26/04 (H) HES RPT CS(HES) 6DP
02/26/04 (H) DP: GATTO, WOLF, COGHILL, SEATON,
02/26/04 (H) CISSNA, WILSON
03/02/04 (H) FIN AT 1:30 PM HOUSE FINANCE 519
03/02/04 (H) Moved CSHB 404(HES) Out of Committee
03/02/04 (H) MINUTE(FIN)
03/03/04 (H) FIN RPT CS(HES) 5DP 5NR
03/03/04 (H) DP: MEYER, HAWKER, FOSTER, HARRIS,
03/03/04 (H) WILLIAMS; NR: STOLTZE, JOULE, CROFT,
03/03/04 (H) MOSES, FATE
05/04/04 (H) RLS AT 1:00 PM CAPITOL 124
WITNESS REGISTER
MARY JACKSON, Staff
to Senator Thomas Wagoner
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented SB 136 on behalf of the sponsor,
Senator Wagoner.
PATTY WARE, Director
Division of Juvenile Justice
Department of Health and Social Services
Juneau, Alaska
POSITION STATEMENT: Presented SB 340 on behalf of the governor.
WENDY LINDSKOOG, Director
External Affairs
Alaska Railroad Corporation
Anchorage, Alaska
POSITION STATEMENT: Explained SB 358.
DIANE BARRANS, Executive Director
Postsecondary Education Commission
Department of Education and Early Development;
Executive Officer
Alaska Student Loan Corporation
Juneau, Alaska
POSITION STATEMENT: Presented HB 404 on behalf of the governor.
SHEILA KING, Finance Officer
Alaska Commission on Postsecondary Education
Department of Education and Early Development;
Alaska Student Loan Corporation
Juneau, Alaska
POSITION STATEMENT: During discussion of HB 404, answered
questions.
PETE ECKLUND, Staff
to Representative William Williams
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: During discussion of HB 404, reviewed the
FY 2005 Education Bond Worksheet for both Versions S and U and
answered questions.
EDDY JEANS, Manager
School Finance and Facilities Section
Education Support Services
Department of Education and Early Development
Juneau, Alaska
POSITION STATEMENT: During discussion of HB 404, explained
EED's document entitled "Debt Reimbursement Program Voter
Approved under HB2003" dated April 27, 2004, and answered
questions.
REPRESENTATIVE WILLIAM WILLIAMS
Alaska State Legislature
Chair, House Finance Committee
Juneau, Alaska
POSITION STATEMENT: Commented on HB 404 in relation to the
School of Fisheries and Ocean Science appropriation.
ACTION NARRATIVE
TAPE 04-4, SIDE A
Number 0001
CHAIR NORMAN ROKEBERG called the House Rules Standing Committee
meeting to order at 1:21 p.m. Representatives Rokeberg,
Coghill, McGuire, Morgan, Berkowitz, and Kerttula were present
at the call to order. Representative Kott arrived as the
meeting was in progress. Also in attendance were Senators Ben
Stevens, Therriault, and Wagoner.
SB 136-MUNICIPAL PROPERTY TAX EXEMPTIONS
CHAIR ROKEBERG announced that the first order of business would
be CS FOR SENATE BILL NO. 136(FIN) am, "An Act relating to a
mandatory property tax exemption for certain private property
interests on military bases or installations; relating to an
optional exclusion or exemption from municipal taxation for
residential property; relating to an exemption from and deferral
of municipal property taxes on certain types of deteriorated
property; and providing for an effective date."
Number 0073
MARY JACKSON, Staff to Senator Thomas Wagoner, Alaska State
Legislature, informed the committee that the companion to SB 136
is HB 241, which has been through the House State Affairs
Standing Committee and the House Finance Committee. However,
there are a couple of differences between the two pieces of
legislation. She directed the committee's attention to the
committee packet, which includes a document explaining the
Senate floor amendments to [CSSB 136(FIN)]. She explained that
[the Senate floor amendment] created an exemption for private
entities that construct military bases, if that private entity
enters into an agreement for payment in lieu of taxes. The
intention is to avoid duplicative taxes. Currently, [these
private entities] pay a payment in lieu of taxes and a tax.
CHAIR ROKEBERG, upon determining that no one else wished to
testify and that there were no questions, inquired as to the
will of the committee.
Number 0196
REPRESENTATIVE BERKOWITZ moved to report CSSB 136(FIN) am out of
committee with individual recommendations and the accompanying
zero fiscal note. There being no objection, CSSB 136(FIN) am
was reported from the House Rules Standing Committee.
SB 340-DETENTION OF MINORS
CHAIR ROKEBERG announced that the next order of business would
be SENATE BILL NO. 340, "An Act relating to the detention of
delinquent minors in correctional facilities; relating to
emergency detention of minors for evaluation for involuntary
admission for mental health treatment; relating to detention of
intoxicated minors and minors incapacitated by alcohol or drugs;
and providing for an effective date."
Number 0240
PATTY WARE, Director, Division of Juvenile Justice, Department
of Health and Social Services (DHSS), informed the committee
that HB 487 is the companion to SB 340. She explained that SB
340 amends sections of the delinquency, alcohol, and mental
health statutes to prohibit the holding of juveniles in either
adult jails or juvenile facilities when the juvenile hasn't been
charged with committing a crime. This legislation is necessary
to be in alignment with the requirements of the federal Juvenile
Justice and Delinquency Prevention Act. Furthermore, the
division is working on alternatives in a range of locations
across the state as there are a range of nonsecure shelters in
both rural and urban locations. The state has been working on
this matter for well over a decade, she related. She specified
that the division has been working with the Department of Public
Safety, in particular the Alaska State Troopers. Ms. Ware
informed the committee that [HB 487] was reported out of the
House Judiciary Standing Committee and the House Finance
Committee.
REPRESENTATIVE McGUIRE asked if HB 487 is exactly the same as SB
340.
MS. WARE replied yes.
CHAIR ROKEBERG, upon determining there was no one else who
wished to testify, closed public testimony.
Number 0381
REPRESENTATIVE BERKOWITZ moved to report SB 340 out of committee
with individual recommendations and the accompanying zero fiscal
note. There being no objection, SB 340 was reported from the
House Rules Standing Committee.
SB 358-ALASKA RAILROAD TRACK WORK
CHAIR ROKEBERG announced that the next order of business would
be SENATE BILL NO. 358, "An Act relating to the performance of
railroad track construction work for the Department of
Transportation and Public Facilities by the Alaska Railroad
Corporation."
Number 0426
WENDY LINDSKOOG, Director, External Affairs, Alaska Railroad
Corporation, informed the committee that HB 529 is the companion
to SB 358. The two pieces of legislation are identical and HB
529 was heard in the House Labor and Commerce Standing
Committee. She explained that ARRC entered into a collaborative
process with Department of Transportation & Public Facilities
(DOT&PF), the Associated General Contractors (AGC), and Local
341. The process led to a memorandum of understanding (MOU),
which specifically provides the limitations and guidelines with
regard to how the legislation will be administered. The MOU
will accompany the legislation, she noted. Ms. Lindskoog
explained that SB 358 provides DOT&PF flexibility to use either
the competitive bid process or to work directly with ARRC
through a utility agreement when the department has projects
that include track work. The reason for the legislation is that
there didn't seem to be much interest from the private sector in
bidding some projects. However, once the legislation was
introduced, it was discovered that there was interest from the
private sector. Therefore, the MOU struck a good compromise.
Ms. Lindskoog clarified that basically ARRC will work under
utility agreements for critical track work when it involves
switches and cut-overs to the mainline as well as other work
that require specialized equipment.
MS. LINDSKOOG, in response to Chair Rokeberg, confirmed that HB
529 and SB 358 are exactly the same.
CHAIR ROKEBERG surmised that the key element is the MOU, which
makes the legislation generally acceptable to all interested
parties in the state.
MS. LINDSKOOG replied yes.
CHAIR ROKEBERG, upon determining there were no further
questions, closed public testimony.
Number 0636
REPRESENTATIVE McGUIRE moved to report SB 358 out of committee
with individual recommendations and the accompanying zero fiscal
notes. There being no objection, SB 358 was reported from the
House Rules Standing Committee.
HB 404-STUDENT LOANS /EDUC. FACILITIES BONDS
CHAIR ROKEBERG announced that the final order of business would
be HOUSE BILL NO. 404, "An Act relating to the Alaska Commission
on Postsecondary Education; relating to the Alaska Student Loan
Corporation; relating to bonds of the corporation; relating to
loan and grant programs of the commission; relating to an
exemption from the State Procurement Code regarding certain
contracts of the commission or corporation; making conforming
changes; and providing for an effective date."
Number 0694
DIANE BARRANS, Executive Director, Alaska Commission on
Postsecondary Education (ACPE), Department of Education and
Early Development (EED); Executive Officer, Alaska Student Loan
Corporation (ASLC), said that she could speak to some of the
technical changes that the director of Legislative Legal and
Research Services proposed due to some confusing language that
she recommended be deleted. However, she stated that the
changes didn't result in any substantive effect.
Number 0764
REPRESENTATIVE COGHILL moved to adopt CSHB 404, Version 23-
GH2003\S, Cook, 5/4/04, as the working document. There being no
objection, Version S was before the committee.
MS. BARRANS explained that the substantive portions of this
legislation broaden ASLC's authority to allow, as part of the
Return of Capital Initiative, the return of monies that ASLC no
longer needs to operate its core programs. One of the tools
that would be helpful would be the ability to issue bonds, the
proceeds of which could be used by the state to pay for capital
projects. Additionally, this legislation reconstitutes the
state student grant program, focusing on Alaska workforce needs
and shortage areas. Furthermore, this legislation would enhance
the current outreach and early awareness initiatives. This
legislation would allow the grant program to be funded by ASLC
rather than having to request general funds for that. Ms.
Barrans highlighted that the legislation expands ASLC's ability
to offer consolidated loans. She explained that many borrowers
are holding outstanding loans that were issued when the rates
were considerably higher, and therefore ASLC would like to offer
those borrowers reduced rates. This legislation clarifies
ACPE's administrative process for issuing liens such that it's a
clear and well-described due process for someone who wants to
avoid issuance of a lien for a defaulted education loan.
Lastly, this legislation exempts from state procurement code,
certain services relating to the guaranteeing and electronic
disbursement of the loans.
Number 0935
MS. BARRANS turned to the other changes encompassed in Version
S. Although ASLC didn't request a committee substitute (CS)
specifying specific items to be funded through the capital
project revenue bonds, ACPE appreciated the work the House
Finance Committee did in ensuring that the way in which the
projects were delineated didn't impair ACPE's ability to meet
its core mission nor posed a risk to ASLC's ability to issue
bonds.
MS. BARRANS, in response to Representative McGuire, explained
that those holding student loans have had the ability to
consolidate loans for the last year. The loan consolidation
rate was slightly under 6 percent. This legislation would allow
borrowers who already have loans under the old Alaska student
loan program and who are borrowing from the AlaskaAdvantage
Loan, a new loan program, to consolidate across programs.
REPRESENTATIVE McGUIRE assumed that the bonding aspect of the
legislation doesn't outweigh the primary focus of [ACPE],
serving its borrowers and to continue to offer reduced interest
rates.
MS. BARRANS explained that in developing the proposal to return
capital, the types of benefits have been built into the cash
flow. Therefore, only after considering the primary mission,
which is to reduce the cost of education, can the amount of
funds that could be used for other state purposes be identified.
CHAIR ROKEBERG inquired as to the impact of the availability of
the funds that may be available as a result of the passage of HB
404.
Number 1208
SHEILA KING, Finance Officer, Alaska Commission on Postsecondary
Education, Department of Education and Early Development; Alaska
Student Loan Corporation, said she understood the question to be
in regard to the timing of the funds. She informed the
committee that what has been projected for the next payment
would be between $80-$100 million. Subsequent to that there
would be an approximately $80 million [payment]. The timing is
related to the availability of assets. There are some bonds
that have upcoming call provisions. As the debt can be reduced
in a particular indenture, then there is more flexibility with
the bonding in the indenture. Ms. King noted that one of the
mechanisms that has been reviewed is residual interest bonds,
which means that the cash flow at the end of the loans would be
captured as the front cash flows of the loans are pledged to
current bonds. However, those bonds mature before the loans are
totally paid off. Therefore, the thought is to issue
subordinate bonds in order to collateralize the later cash flows
for these bonds, which would allow recognition of the cash
early.
MS. KING, in further response to Chair Rokeberg, explained that
in the trust being reviewed if the last maturity occurs in 2013,
the loans may not pay off until 2020. Therefore, there is seven
years of cash flow that could be collateralized now so as "to
pledge those seven years of cash flows ... that would remain
beyond the current maturities of the bonds in that trust."
CHAIR ROKEBERG asked if significant discounts would have to be
made to do that.
MS. KING answered that whether those are discounted bonds or not
will depend on the market. The rates may be slightly higher
than the senior series bonds, but the bonds would still be tax
exempt. Therefore, the rates would be very good. Ms. King
confirmed that there is a limitation on the available cash flow
on an annualized basis for a period of years. She explained
that the assets are pledged to bonds currently and the bond
covenants don't necessarily allow cash to be taken out of the
trust unless the trust exceeds a certain amount. "So, we've got
the loans pledged to the trust, we've got capital reserve funds
that are required under the bond indentures and thus we're
looking at pledging future cash flows because that's really
where our main capacity is," she specified.
Number 1442
CHAIR ROKEBERG asked if the earlier referenced $80-$100 million
would be available for fiscal year (FY) 2005.
MS. KING informed the committee that ACPE anticipates issuing
bonds in the spring of 2005, between February and March. That
timeframe provides time to do the deal. Furthermore, there are
some bonds that are being paid off this summer and [the
aforementioned timeframe] will help with the collateralization
availability for future bonds as well.
CHAIR ROKEBERG recalled that over the next couple of years there
is over $200 million of potential income stream available for
legislative appropriation. He also recalled that it was the
governor's intention to spread it over three years.
MS. KING specified that the [division's] proposal is to return
about $250-$260 million to the state. The aforementioned is the
amount of loans that were contributed to start ASLC. In March a
bond issue for $75 million of the [$250-$260 million] was closed
and the money is sitting in the capital project fund waiting to
be used. The three-year phase approach was used because it was
determined that is what [ACPE] would most likely be able to meet
given bond maturities, loan amortization schedules, cash flows,
and maintaining ASLC's primary focus.
Number 1609
PETE ECKLUND, Staff to Representative William Williams, Alaska
State Legislature, offered to explain how the proposed list of
projects in Version S was determined. He directed attention to
the spreadsheet entitled "FY 2005 Education Bond Worksheet",
dated 12:14 PM 5/4/2004. The last page of the spreadsheet shows
that the list of projects in this legislation total $88,258,000.
He explained that the major maintenance list from EED was
reviewed and $23 million of the $26 million of projects on EED's
major maintenance list were [included in this legislation]. He
recalled that [the list includes] 27 of 31 projects. The last
few projects weren't included because of the lack of good
justification. Moreover, the top two projects of the school
construction list were included [in this legislation] as were
[most] of the projects on the University of Alaska's wish list.
Mr. Ecklund pointed out that the bond total was kept between
$85-$90 million.
MR. ECKLUND acknowledged that there have been questions
regarding why the list doesn't include any urban school
projects. He explained that two years ago the legislature
opened up the bonding authority for any community with bonding
capacity to work with EED to place new school construction and
deferred maintenance on the local ballot and receive 70:30
reimbursement. The aforementioned is available until the end of
the 2004 calendar year. Mr. Ecklund recalled that about $500
million of debt has been incurred through voter approval in
municipalities with bonding authority. Therefore, Version S
attempts to balance the aforementioned by providing funding to
those communities that don't have bonding capacity. Mr. Ecklund
related that this was balanced between urban and rural areas in
respect to other bonding legislation that includes
transportation projects.
Number 1835
REPRESENTATIVE BERKOWITZ related his observation that the list
amounts to about one-third of the amount available through
ASLC's bonding capacity. He acknowledged that the governor
wanted this to be stretched out over three years. He inquired
as to whether there is some consistency.
MR. ECKLUND directed attention to page 4, Section 5, which
limits the bonding capacity to $200 million between January 1,
2005, and December 31, 2008. The $200 million proposed by
[Section 5] is attainable by ASLC to bond for over the next few
years. The ASLC wouldn't necessarily have to bond for the full
amount in the first issuance, rather bonding over multiple years
could occur in order to reach the cash flow needs of the
projects listed. Mr. Ecklund pointed out that when a concept
like this is introduced [the bonds] tend to grow, and therefore
the desire was to start at a moderate level.
REPRESENTATIVE McGUIRE turned to the list of projects, and asked
if the Integrated Science Facility is in Phase II.
MR. ECKLUND answered that although he wasn't sure what phase the
project is in, he understood that the funds would complete the
project.
REPRESENTATIVE McGUIRE noted that there are four phases to
completion, and said she had heard that only part of the phases
[would be completed with the funding specified].
MR. ECKLUND specified that the funding for the Integrated
Science Facility was what the University of Alaska requested,
and therefore he assumed that the university requested what was
necessary.
Number 1996
EDDY JEANS, Manager, School Finance and Facilities Section,
Education Support Services, Department of Education and Early
Development, reminded the committee that a couple years ago the
legislature passed HB 2003, which authorized the debt
reimbursement program to remain open for two years. That
program allowed municipalities to qualify for debt reimbursement
at 70 percent if the projects met EED's current eligibility
requirements or at 60 percent for a project that didn't meet
EED's eligibility requirements. For example, the Anchorage
administrative building would only qualify for the 60 percent
reimbursement as would be the case for the request for a
centralized food facility for the entire Matanuska-Susitna
Borough. The proposed high school in Juneau exceeds EED's
standards, and therefore would only qualify for a 60 percent
reimbursement. He noted that any major maintenance projects
that qualify under EED's standards would be eligible at 70
percent.
MR. JEANS turned to the department's document labeled "Debt
Reimbursement Program Voter Approved under HB 2003" dated April
27, 2004. The first page of the document specifies the voter
approved debt approved [since the passage of HB 2003]. The
voters across the state have authorized about $539 million of
debt. Of that, approximately $306 million has already entered
into the department's system and is reflected in the debt
reimbursement requirement of $81 million for next year.
Therefore, about $233 million in voter approved debt would be
left. Although the bonds may not have been sold yet or
department approval may not have been obtained, Mr. Jeans
anticipated that the funds will be received prior to December
31st. The bottom of the first page shows the state's annual
share of the debt, which amounts to the following: about $19
million if the bonds were sold over a 10-year period; about $14
million if sold over a 15-year period, and about $11 million
over a 20-year period. For the sake of discussion, Mr. Jeans
took the example of the $14 million, and related that it would
likely hit EED's system within the next two years. Therefore,
he said one could anticipate the state debt reimbursement
program to approach $95 million in a couple of years.
MR. JEANS pointed out that the second page of this document
takes the $233 million that hasn't been sold and breaks it out
by district. Therefore, it shows that Anchorage voters have
authorized approximately $124 million for which the debt hasn't
been sold yet. As page 2 shows, there are other communities in
a similar situation. Mr. Jeans moved on to page 3, which
reflects projects that have been submitted and approved by EED,
but still require voter approval at the local level. The bottom
of page 3 specifies the annual debt costs if the projects were
approved by local voters and entered EED's system.
MR. JEANS explained that the next four pages summarize the
projects by district, whether the department or voter approval
has been obtained, the dollar amount, and the rate of
reimbursement. The second to last page of the document
specifies EED's current debt reimbursement request, which totals
$81.8 million. The last page of the document includes the
history of the debt reimbursement program, entitlements, and
state-approved reimbursement rates. He clarified that the last
page reflects the district's entitlement under the program and
at the level the legislature has funded it. Therefore, the
percent reimbursement depends upon when projects were approved.
For example, in the 1980s the projects were approved at 90
percent.
Number 2292
REPRESENTATIVE McGUIRE drew attention to the planning and design
of Chugach Optional and Dimond demolition funding, which the
document specifies has been approved by the voters but not EED.
MR. JEANS addressed Chugach Optional. He explained that the
original request for Chugach Optional was for $7 million, which
didn't include any planning and design funding. Therefore, the
department increased the request in order to cover the design
phase of the project. With regard to Dimond demolition, Mr.
Jeans explained that the new Dimond High School included
demolition money for the existing Dimond school. Therefore, EED
didn't approve the request for additional funds for demolition
of the old school until the existing project is closed.
CHAIR ROKEBERG asked if EED anticipates funding the demolition
request at the time the existing project is closed.
MR. JEANS clarified that EED wants to see where the project ends
before additional money for the demolition is approved because
demolition funds were included in the original project.
Number 2375
MR. ECKLUND interjected that as the 70:30 debt reimbursement was
allowed, there has been an imbalance with regard to the
Kasayulie case. Therefore, it seemed necessary to do some rural
construction projects in order to come into compliance with that
case.
MR. JEANS explained that voters authorized $154 million in
general obligation (GO) bonds for rural projects over a two-year
period. In that same time, voters in municipalities across the
state have authorized [in total] over $540 million and there is
six months more in which additional debt could be authorized.
CHAIR ROKEBERG asked if the education bonding of $88 million was
capped in order to allow ASLC's desire to have cash flow
management.
MR. ECKLUND answered that he did that at the direction of his
boss. In further response to Chair Rokeberg, Mr. Ecklund said
that he didn't leave out the urban areas at the direction of his
boss. He pointed out that the last page of the spreadsheet
entitled "FY 2005 Education Bond Worksheet" specifies that urban
communities received 48 percent of this proposal while rural
communities received 45 percent and 7 percent of the total was
utilized statewide.
CHAIR ROKEBERG surmised that the proposal includes university
funding.
MR. ECKLUND replied yes, adding that it also includes EED
funding.
CHAIR ROKEBERG recalled mention of $150 million of statewide
school authorized bonding that went to mostly the Rural
Education Attendance Areas (REAA).
MR. JEANS explained that the actual GO bond was for $171
million, but the governor's office reduced it by $3 million.
There was one Anchorage project for $14 million, he noted.
Therefore, when one factors in the $3 million reduction and the
$14 million project in Anchorage, it results in the $154 million
that was available to the REAAs. He confirmed that was bonded
two years ago.
CHAIR ROKEBERG surmised that the belief is that since the GO
bonds were bonded and the urban areas were allowed the 70:30 or
60:40 reimbursement, the urban areas don't deserve a "bite at
this apple." He indicated that he wasn't sure he understood
that.
MR. ECKLUND pointed out that [70:30 and 60:40 reimbursement] is
available to municipalities through the end of this year.
Number 2558
REPRESENTATIVE McGUIRE commented that Chair Rokeberg brings out
an interesting point, particularly in Anchorage where the voters
have become increasingly unwilling to approve bonding packages.
Particular areas seem to be discriminated against by not having
projects approved. She mentioned that the educational process
for bonding is difficult.
MR. JEANS clarified that the passage of HB 2003 amended the
current school construction grant program specifically to
exclude municipal governments because the debt program was open
without caps. The thought behind that was that a truly needy
project should be able to garner the support of the community
for state reimbursement up to 70 percent. He reiterated that
the program is open for an additional six months. The schedules
of the state clearly illustrate that the urban areas have taken
advantage of this program. The schools listed in this proposal
are REAAs, which don't have bonding capacity and rely on the
state to provide construction funding. Mr. Jeans highlighted
that this package provides $37 million for rural schools and as
pointed out earlier it accomplishes 29 separate projects, which
the department supports.
CHAIR ROKEBERG said, "Well, ... we're just concerned about the
equity issue ... as it relates to the entire package." Chair
Rokeberg asked if Mr. Jeans was aware of Anchorage's $22 million
deferred maintenance list.
MR. JEANS opined that if those were truly needy projects, the
projects would be brought before the voters to request debt
authorization.
CHAIR ROKEBERG said [those projects were brought before the
voters] who voted the projects down.
MR. JEANS related his belief that some of the maintenance was
funded, although [the voters turned down] Eagle River Middle
School and the district's administrative building.
The committee took an at-ease from 2:02 p.m. to 2:03 p.m.
CHAIR ROKEBERG announced that the House Rules Standing Committee
was recessed to the call of the chair at 2:03 p.m.
[A new tape was inserted.]
TAPE 04-5, SIDE A
CHAIR ROKEBERG reconvened the House Rules Standing Committee at
11:44 p.m. Representatives Rokeberg, Kott, Coghill, McGuire,
Morgan, and Berkowitz were present upon reconvening.
Representative Kerttula arrived as the meeting was in progress.
Chair Rokeberg reminded the committee that before it was HB 404.
Number 0069
REPRESENTATIVE BERKOWITZ moved to adopt CSHB 404, Version 23-
GH2003\U, Cook, 5/4/04, as the working document. There being no
objection, Version U was before the committee.
MR. ECKLUND pointed out that Version U totals $141 million of
mainly school deferred maintenance throughout the state, four
construction projects, a couple of museums, a library, and some
university projects.
CHAIR ROKEBERG asked if Version U encompasses any changes to the
ACPE/ASLC provisions of the legislation.
MR. ECKLUND replied no. In further response to Chair Rokeberg,
Mr. Ecklund confirmed that the match from the REAAs was modified
such that all of the projects are grant funded under Version U.
Number 0219
CHAIR ROKEBERG noted that one of the committee members made an
inquiry with regard to the School of Fisheries and Ocean
Science, a university appropriation. The legislation specifies
a $5 million appropriation for the School of Fisheries and Ocean
Science in Juneau. He asked if the appropriation was originally
$7 million.
MR. ECKLUND said that the appropriation was never at $7 million
in any versions of the legislation, although a spreadsheet may
have specified $7 million.
Number 0297
REPRESENTATIVE WILLIAM WILLIAMS, Alaska State Legislature,
Chair, House Finance Committee, informed the committee that the
Juneau areawide [appropriation] was inadvertently changed from
$7 million to $5 million when the budget was being reduced. In
the interest of time, Representative Williams suggested that the
amendment [bringing Juneau's areawide appropriation] up to $7
million be made on the floor.
The committee took an at-ease from 11:46 p.m. to 11:48 p.m.
REPRESENTATIVE KERTTULA directed attention to page 21, line 24,
which specifies the $5 million appropriation for the School of
Fisheries and Ocean Science. She explained that the facility
can [begin construction] at $7 million but not with $5 million.
The School of Fisheries and Ocean Science has been a top
priority of the region for many years. Furthermore, it
leverages federal dollars.
CHAIR ROKEBERG recommended that matters be expedited for the
floor and any corrections be made in committee.
REPRESENTATIVE McGUIRE informed the committee that on the
worksheet entitled "FY 2005 Education Bond Worksheet" dated
5/4/2004 8:37 PM, related to Version U, the Mears Middle School
projects are in her district not Representative Samuels'.
Number 0680
REPRESENTATIVE KOTT moved that the committee adopt the following
amendment:
Page 21, line 24;
Delete "5,000,000"
Insert "7,000,000"
There being no objection, the amendment was adopted.
Number 0721
REPRESENTATIVE KOTT moved to report CSHB 404, Version 23-
GH2003\U, Cook, 5/4/04, as amended, out of committee with
individual recommendations and the new fiscal note. There being
no objection, CSHB 404(RLS) was reported from the House Rules
Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Rules Standing Committee meeting was adjourned at 11:51 p.m.
| Document Name | Date/Time | Subjects |
|---|