Legislature(2001 - 2002)
05/18/2002 10:13 AM Senate FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| * | SB2002 | ||
| * | SB2003 | ||
| * | SB2004 | ||
| * | SB2005 | ||
| * | SB2009 | ||
MINUTES
SENATE FINANCE COMMITTEE
May 18, 2002
10:13 AM
TAPES
SFC-02 2nd SS #2, Side A
CALL TO ORDER
Co-Chair Pete Kelly convened the meeting at approximately 10:13 AM.
PRESENT
Senator Pete Kelly, Co-Chair
Senator Dave Donley, Co-Chair
Senator Lyda Green
Senator Gary Wilken
Senator Alan Austerman
Senator Lyman Hoffman
Senator Donald Olson
Senator Loren Leman
Also Attending: SENATOR RICK HALFORD; CAROL CARROLL, Director,
Administrative Services Division, Department of Military and
Veterans Affairs
Attending via Teleconference: There were no teleconference
participants.
SUMMARY INFORMATION
SB2002-MUNICIPAL BOND REIMBURSEMENT
The Committee adopted an amendment and reported the bill from
Committee.
SB2005-MUNICIPAL BOND REIMBURSEMENT
The bill moved from Committee.
SB2004-G.O. BONDS: SCHOOLS/MUSEUM/UNIVERSITY
The bill moved from Committee.
SB2009-ALASKA VETERANS ADVISORY COUNCIL
The Committee heard from the Department of Military and Veterans
Affairs. The bill moved from Committee.
SB2003-APPROP: STATE TROOPERS
The bill moved from Committee.
Co-Chair Kelly announced the legislation to be heard at this
meeting is similar to legislation the Committee acted upon during
the regular legislative session.
SENATE BILL NO. 2002
"An Act relating to construction, rehabilitation, and
improvement of schools and education-related facilities;
relating to municipal bond reimbursement for school
construction; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Senator Wilken questioned if this contains language from HB 451 and
whether it contains "any forward or backward linkage".
SENATOR RICK HALFORD replied SB 2002 includes the amendments
adopted by the Senate Rules Committee to the original HB 451, but
not those amendments adopted by the full Senate. He informed he is
preparing an amendment to SB 2002 to address the length of the
program.
Co-Chair Kelly ordered the bill HELD in Committee.
SENATE BILL NO. 2005
"An Act relating to municipal bond reimbursement for school
construction; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Kelly explained this legislation is identical to the
original version of HB 451 and contains authorization to issue
bonds. He noted it does not list specific projects.
Senator Austerman asked if the intent is to report SB 2005 from the
Senate Finance Committee to be amended in the Senate Rules
Committee.
Co-Chair Kelly responded his intention is that no further action
would be taken on this bill once it is referred to the Senate Rules
Committee and that the bond authority would be granted through SB
2002.
Senator Austerman asked the reason for reporting SB 2005 from the
Senate Finance Committee.
Co-Chair Kelly answered that in the event SB 2002 does not pass,
there would be opportunity to pass the more limited provisions
contained in SB 2005. He stated agreement exists on passage of at
least minimal bonding authority as contained in the original
version of HB 451, sponsored by Representative James.
Senator Wilken clarified SB 2005 would be moved from Committee to
allow for flexibility, which he supports.
Senator Green offered a motion to move from Committee, SB 2005 with
individual recommendations.
There was no objection and SB 2005 MOVED from Committee.
AT EASE 10:20 AM / 10:22 AM
SENATE BILL NO. 2002
"An Act relating to construction, rehabilitation, and
improvement of schools and education-related facilities;
relating to municipal bond reimbursement for school
construction; and providing for an effective date."
This bill was heard and held earlier in the meeting.
Senator Halford testified this legislation does not include "the
tie-in provisions" under discussion for HB 451. He stated it does
include provisions that clarify that the 70 percent reimbursement
program is subject to the full review and that the 60 percent
reimbursement program is subject to a lesser review.
Senator Halford noted a technical correction is necessary to
replace "approved" with "reviewed" on page 6, line 11.
Senator Halford next pointed out the bill stipulates the program
operates until the year 2008. He proposed changing this to 2006. He
also noted the bill contains language pertaining to a set amount of
state debt. He stated this amount is no longer certain and
recommended this language be amended.
Senator Halford stressed that the approval of debt service would
remain contingent upon approval of the rural bond package.
Senator Hoffman spoke to the proposed change to shorten the length
of the program. He detailed the legislation would not take effect
in the current year until after voter approval for the bonds is
received in the November 2002 general election. Therefore, the
program would be in effect from the year 2003 until 2006.
Senator Hoffman cautioned to the disproportionate amount of bonds
issued in 2006, the final year of the program, by those
communities, "which could disrupt the parody between what we
approved potentially for rural schools and the open-endedness. Even
thought there is a time frame on it, there is not a monetary
limit." He stated this could be unfair.
Senator Leman clarified the correct terminology in this context is
"schools in unorganized boroughs", rather than rural schools.
Senator Hoffman agreed.
Amendment #1: This amendment deletes the year "2008" and inserts
"2006" in each place it appears in the bill: page 6, lines 1 and 9,
and page 10, lines 6 and 14.
This amendment also deletes "approved" and inserts "reviewed" on
page 6, line 11. The amended language of Section 6(a)(12) reads as
follows.
(12) subject to (h), (i), and (j)(2), (3), and (5)
of this section, 60 percent of payments made by a
municipality during the fiscal year for the retirement of
principal and interest on outstanding bonds, notes, or
other indebtedness authorized by the qualified voters of
the municipality on or after June 30, 1999, but before
July 1, 2006, to pay costs of school construction,
additions to schools, and major rehabilitation projects
and education related facilities that exceed $200,000,
are reviewed under AS 14.07.020(a)(11), and are not
reimbursed under (n) or (o) of this section.
This amendment also deletes "in the principal amount of at least
$240,000,000" following "state debt" on page 10, line 25. The
amended language reads as follows.
Sec. 15. Sections 1,3,4,6-10, and 13 of this Act take
effect on the date that the director of elections certifies to
the revisor of statutes that a majority of the qualified
voters of the state who vote on the question at the 2002
general election affirmatively voted to authorize the
contracting of state debt for the purpose of financing capital
improvements and major maintenance for schools in rural
educational attendance areas or municipal school districts.
This amendment also gives authorization to the bill drafter to make
conforming changes as necessary.
Senator Leman moved for adoption.
The amendment was ADOPTED without objection.
Senator Austerman asked, "Is there a way to get to the number
Senator Hoffman is talking about?"
Co-Chair Kelly suggested the Senate Rules Committee could insert a
definitive amount into the language of the bill. He opined that he
does not support inclusion of a specific dollar amount.
Senator Wilken referenced Section 6(a)(12) and asked if a
definition exists specifying what the review entails. He asserted
that a review could vary from "passing across one's desk" to an
actual analysis following guidelines.
Senator Halford replied regulatory authority would determine "the
ultimate decision" with regards to the 60 percent reimbursement
program. However, he stressed the intention is a "lower level of
authority" than required for the 70 percent reimbursement program.
He indicated the proposed project should be "closely education
related" and contain a "standard of need", although it would not
require a formula for the number of students or the size of the
facility.
Senator Wilken surmised there would be no method to identify
whether a school district is taking advantage of the bond program
using the 60 percent reimbursement program.
Senator Halford agreed a level of review is necessary to avoid the
program becoming "engulfed" by abuse. However, he understood there
is "basic authority" within the Department of Education and Early
Development to address this issue.
Senator Wilken asked if the Department determined an application
for a project receiving 60 percent reimbursement is "over and
above" what is "proper for whatever reasons," whether there would
be a method to deny reimbursement.
Senator Halford responded it would depend upon the level of
egregiousness. He pointed out the Department could present the
application to the Legislature and the Legislature could take
action to deny reimbursement. He emphasized there would be adequate
time to address the matter if it arose.
Senator Austerman asked for a definition of "education related
facilities" as listed in the bill title on page 1, line 2. He
wanted to know if this is limited to K-12, or whether a community
college could be interpreted to qualify.
Senator Halford understood such a definition exists.
Senator Halford then explained for Co-Chair Kelly that a local
election to approve school projects could not occur in the current
calendar year because the authority to issue the bonds would not be
granted until the general election in November 2002.
Co-Chair Kelly calculated the actual timeframe of the program would
be approximately two and one-half years rather than three years.
Senator Hoffman reiterated the need to anticipate the projects and
their costs in order to appropriate funds for planning and design
of both rural and urban schools in advance. He emphasized the short
construction season and the limited time that shipments could be
made to many rural communities. He suggested further discussion on
this matter.
Senator Hoffman also asked whether this legislation could be
amended to "accommodate" the Wendler Middle School in Anchorage.
Senator Halford answered that the intent is to include the Wendler
school project with the statewide general obligation bond package.
Senator Hoffman agreed this is one option and requested the
Administration testify as to whether other options are available.
Senator Halford informed this is the only option identified by the
Anchorage School District; although, he qualified there could be
other options.
Senator Austerman clarified this issue must receive statewide voter
approval before local elections to approve specific bond issues
could be held. He assumed that before a bond proposal is placed
before voters, a project must be designed and planned. He shared
Senator Hoffman's concerns about the limited timeframe.
Co-Chair Donley asked when the State's first bond debt
reimbursement payment would come due.
Senator Halford answered that the first appropriation could be
necessary in FY 04. He noted the majority of the payments would not
begin until FY 05.
Co-Chair Donley commented, "It's going to be an interesting year."
Senator Austerman asked if July 2006 is the deadline for local bond
passage.
Senator Halford affirmed this is for the authorization portion.
Co-Chair Donley appreciated the conversation on Section 6 (12). He
commented this is "really a difficult question as far as trying to
free up school districts that wish to help pay for projects
themselves from some of the unfairness of the current Department of
Education and Early Development list [prioritizing school
construction projects] and their regulations, but at the same time
keeping some reasonability for what gets developed into the
system."
Co-Chair Donley was concerned with AS 14.07.020(a)(11), which
allows the Department of Education and Early Development to adopt
regulations in "whatever way they see fit to regulate the
expenditure of money in this area." He expressed, "I have not been
happy with the regulations the bureaucrats over there have cooked
up over the years. I mean they're famous for their one regulation
that did not count students in portable units as un-housed. That
was one of the most unfair single regulations I've ever seen in my
time here, Mr. Chairman, and that came out of the same Department
that now has full authority to adopt new regulations to cover that.
I'm concerned about what kind of an effect that will have and what
kind of new regulations will sprout out of the minds of the people
at Department of Education over that because they have not shown a
propensity for fairness, in my opinion, when it came to this
program in the past. We had to overrule that regulation by statute
last time."
Co-Chair Kelly understood and noted the matter could be addressed
when the Senate Rules Committee hears this bill.
Senator Hoffman agreed the Department of Education and Early
Development regulatory interpretation of the provision relating to
students housed in portable facilities was unfair to the entire
State.
Senator Austerman offered a motion to move SB 2002 with individual
recommendations from Committee.
There was no objection and CS SB 2002 (FIN) MOVED from Committee.
SENATE BILL NO. 2004
"An Act relating to the issuance of general obligation bonds
for the purpose of paying the cost of design, construction,
and major maintenance of educational and museum facilities;
and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Kelly informed that the language in this bill is identical
to earlier legislation that was passed by the House of
Representatives during the regular legislative session. He noted
the Committee would also receive separate legislation, which would
contain language adopted by the House Finance Committee and is
identical to that adopted by the Senate Finance Committee in the
aforementioned earlier legislation from the regular legislative
session.
Senator Green offered a motion to move SB 2004 from Committee with
individual recommendations.
Without objection SB 2004 MOVED from Committee.
SENATE BILL NO. 2009
"An Act establishing the Alaska Veterans Advisory Council; and
providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Kelly asked if the language in this bill is identical to
previous legislation passed by the Senate during the regular
legislative session.
CAROL CARROLL, Director, Administrative Services Division,
Department of Military and Veterans Affairs, affirmed and noted the
earlier legislation did not receive a hearing in the House of
Representatives.
Co-Chair Kelly asked about the effective date.
Ms. Carroll replied SB 2009 contains language pertaining to the
effective date and the transition of the council into statute, both
of which were earlier adopted by the Senate Finance Committee.
Senator Green offered a motion to move SB 2009, with individual
recommendations and accompanying fiscal note from Committee.
There was no objection and SB 2009 with accompanying $3,500 fiscal
note #1 from the Department of Military and Veterans Affairs MOVED
from Committee.
SENATE BILL NO. 2003
"An Act making appropriations; and providing for an effective
date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Kelly noted Senator Halford's intent to adopt a "naked
appropriations bill" to have available if necessary. Co-Chair Kelly
pointed out this bill contains a title only.
Senator Hoffman moved the Naked Appropriation, SB 2003, from
Committee with individual recommendations.
Without objection SB 2003 MOVED from Committee.
AT EASE 10:43 AM
ADJOURNMENT
The meeting adjourned with the Senate Sine Die adjournment of the
Second Special Session at 5:32 PM on May 21, 2002.
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