HOUSE BILL NO. 112 "An Act establishing the Alaska public building fund; and providing for an effective date." This was the fourth hearing for this bill in the Senate Finance Committee. Co-Chair Torgerson spoke of a proposed Senate Finance Committee substitute explaining that it addresses his concerns voiced at an earlier hearing. [TAPE MALFUNCTION - Power outage, meeting recessed to wait for generator power.] Co-Chair Torgerson continued that the committee substitute limits the legislation to apply only to the eight buildings identified in the fiscal note. Those buildings are: Alaska Office Building, Robert B. Atwood Building, Court Plaza Building, Douglas Island Building, Fairbanks Regional Office Building, Juneau Community Building, Juneau Public Safety Building, and Juneau State Office Building. Co-Chair Parnell moved to adopt, as a workdraft, HB 112, 1- LS0522\D. Senator Green objected to ask about the earlier question of consistency of charging private and government tenants and whether this committee substitute resolves the issue because of the limited number of buildings. Co-Chair Torgerson responded that the committee substitute doesn't differentiate between private and federal occupancy. He explained that the intent was to limit the Department of Administration from instituting this depreciation calculation and subsequent rent collection on other state-owned facilities. Senator Green wanted to know how the committee substitute impacts the depreciation calculation method. Co-Chair Torgerson stressed that the purpose of the bill is to capture federal and other revenues as rent payments. He continued that the committee substitute recognizes this but doesn't allow the department to expand the process beyond the eight buildings. Senator Adams wanted to know if the Administration had plans to include any other state-owned buildings besides the eight identified here. ALISON ELGEE, Deputy Commissioner, Department of Administration confirmed the chairman's assessment. She elaborated that these facilities had been selected because they presented the best opportunity to maximize the collection of additional federal and other funds through the agencies located in the facilities. She stated that the Administration did not intend to expand the program before FY 03, after the program operated a full year and was established. There was no objection to the motion and the committee substitute was adopted as a workdraft. Amendment #1: This conceptual amendment makes a technical correction to page two line six of the committee substitute to delete "unexpected" and insert "unexpended". The amended language reads: "(d) The unexpended and unobligated balance of an appropriation from the Alaska public building fund lapses into the Alaska public building fund at the end of the fiscal year for which it was appropriated." Co-Chair Parnell moved for adoption. Without objection, it was ADOPTED. Co-Chair Torgerson requested that the Administration explain the fiscal note to the Committee. Ms. Elgee apologized that she could not and that the sponsor's staff had been expected to attend the meeting for the purpose of explaining the fiscal note. Co-Chair Torgerson told the Committee that David Teal, Director, and Danith Watts, Fiscal Analyst, of the Division of Legislative Finance, as well as other co-chair staff had reviewed the fiscal note. The consensus, according to Co- Chair Torgerson, was that the fiscal note adequately reflected the Committee's intent in establishing the Alaska public building fund. However, he noted that he disagreed with the department's claim that two staff positions would need to be added to implement the program, as indicated on the fiscal note. Ms. Elgee explained that the funds allocated on the fiscal note for personal services would be used to offset vacancies for existing positions and that no new positions would be created. She noted that the positions were classified as accounting positions and would manage the bill-paying process and to work with the federal government to secure federal funds. She added that a portion of the funds noted on the fiscal note was intended to help with the vacancy of the facilities planner position. Senator Wilken asked how the funding for these positions factored in with the supplemental budget request for vacant facilities planner positions. He wanted to know if the total was funding for four positions if the bill and the supplemental request were both adopted. Ms. Elgee corrected that the intent was to only have two facilities planner positions. She clarified that the funding requested in the supplemental budget was for a contracting officer, which did not apply to this program. She stated that accounting was this program's the greatest need. Co-Chair Torgerson relayed a previous conversation where the question was posed as to how many existing positions that performed the same duties required for this program were in the Department of Transportation and Public Facilities. NANCY SLAGLE, Director, Division of Administrative Services, Department of Transportation and Public Facilities, responded that the department currently does not have any staff that collects rent since rent is not currently charged. She continued that the funding received for building maintenance is general fund dollars. This bill, she said transfers those general funds to other agencies to be combined with other types of funds, such as federal receipts to be paid to the Department of Transportation and Public Facilities as rent. Co-Chair Parnell asked who currently negotiates leases for state-owned facilities. Ms. Slagle replied that the Department of Administration currently performs that function. She said that the Department of Transportation and Public Facilities only deals with state-owned facilities. Co-Chair Torgerson said this bill affects approximately 30 tenants, including state agencies. Of those tenants, he said six would be able to collect federal or other funds, such as the permanent fund. Therefore, he had a hard time understanding why two positions were needed to negotiate two-thirds of the rental agreements with state agencies. Ms Elgee replied that besides the actual collection of rent payments, there was development work required to substantiate the actual replacement value of the buildings, which the depreciation is based upon. She talked about the necessity to reimburse the Department of Transportation and Public Facilities for the maintenance and operations of the facilities noting that this would be additional work. AT EASE 9:28 AM / 9:33 Co-Chair Torgerson announced his intent to change the fiscal note to reflect funding for only one new position. Co-Chair Torgerson ordered the bill HELD in Committee.