HOUSE RULES STANDING COMMITTEE April 19, 2000 9:05 a.m. MEMBERS PRESENT Representative John Cowdery, Chairman Representative Brian Porter Representative Joe Green Representative Gail Phillips Representative Pete Kott Representative Ethan Berkowitz Representative Reggie Joule MEMBERS ABSENT All members present COMMITTEE CALENDAR HOUSE BILL NO. 445 "An Act relating to a rural school construction and planned maintenance pilot program; and providing for an effective date." - MOVED CSHB 445(RLS) OUT OF COMMITTEE HOUSE BILL NO. 362 "An Act authorizing the exchange of land between the Alaska Railroad Corporation and Eklutna, Inc., between the Alaska Railroad Corporation and the United States Department of the Army and the United States Department of the Air Force, between the Alaska Railroad Corporation and Chugach Alaska Corporation, and between the Alaska Railroad Corporation and the Municipality of Anchorage; and providing for an effective date." - SCHEDULED BUT NOT HEARD PREVIOUS ACTION BILL: HB 445 SHORT TITLE: RURAL SCHOOL CONSTRUCTION PROGRAM SPONSOR(S): FINANCE Jrn-Date Jrn-Page Action 4/07/00 2920 (H) READ THE FIRST TIME - REFERRALS 4/07/00 2920 (H) FIN 4/11/00 (H) FIN AT 3:00 PM HOUSE FINANCE 519 4/11/00 (H) Heard & Held 4/11/00 (H) MINUTE(FIN) 4/12/00 (H) FIN AT 1:30 PM HOUSE FINANCE 519 4/12/00 (H) Moved CSHB 445(FIN) Out of Committee 4/12/00 (H) MINUTE(FIN) 4/13/00 3109 (H) FIN RPT CS(FIN) 5DP 5NR 4/13/00 3109 (H) DP: MULDER, AUSTERMAN, DAVIS, WILLIAMS, 4/13/00 3109 (H) PHILLIPS; NR: BUNDE, DAVIES, 4/13/00 3109 (H) GRUSSENDORF, MOSES, FOSTER 4/13/00 3109 (H) ZERO FISCAL NOTE (H.FIN/DOE) 4/15/00 3186 (H) RLS TO CALENDAR 04/15/00 4/15/00 3186 (H) MOVED TO BOTTOM OF CALENDAR 4/15/00 3205 (H) READ THE SECOND TIME 4/15/00 3205 (H) RETURN TO RLS COMMITTEE 4/17/00 (H) RLS AT 4:00 PM CAPITOL 120 4/17/00 (H) -- Meeting Postponed to 4/18 -- 4/18/00 (H) RLS AT 4:00 PM CAPITOL 120 4/18/00 (H) 4/19/00 (H) RLS AT 9:00 AM BUTROVICH 205 WITNESS REGISTER DALE ANDERSON, Staff to Representative Mulder Alaska State Legislature Capitol Building, Room 507 Juneau, Alaska 99801 POSITION STATEMENT: Discussed the changes encompassed in version I of HB 445. ACTION NARRATIVE TAPE 00-6, SIDE A Number 0001 CHAIRMAN JOHN COWDERY called the House Rules Standing Committee meeting to order at 9:05 a.m. Members present at the call to order were Representatives Cowdery, Porter, Green, Berkowitz and Joule. Representatives Phillips and Kott arrived as the meeting was in progress. HB 445-RURAL SCHOOL CONSTRUCTION PROGRAM CHAIRMAN COWDERY announced that the first order of business would be HOUSE BILL NO. 445, "An Act relating to a rural school construction and planned maintenance pilot program; and providing for an effective date." Number 0079 REPRESENTATIVE GREEN moved that the committee adopt the proposed committee substitute (CS) labeled LS1596\I, Chenoweth/Ford, 4/18/00. There being no objection, it was so ordered. DALE ANDERSON, Staff to Representative Mulder, Alaska State Legislature, explained that [the rural school construction and planned maintenance] pilot project was designed "to create efficiency in design, firm price proposals and prompt, timely completion of school [construction] projects in rural Alaska." There was a [problem], which led to the bill being withdrawn from the House floor in order to have a meeting in Anchorage. The changes encompassed in the CS, version I, is the result of that meeting. He noted that there were 12 members of the professional design folks, engineers and contractors who developed and signed off on the language in the CS. He offered to answer any questions. Number 0242 MR. ANDERSON, upon the request of Representative Phillips, pointed out that the changes are encompassed on page 2. He explained that originally there was a list of criteria that the Department of Education (DOE) would use in its request for proposals (RFP). He believed that there was a misunderstanding in that [DOE] thought that "they" were trying to hire contractors and hire a maintenance program, the designers and the engineers. That was not the case. The purpose of the bill was to hire a developer who would take a project from start to finish in a coordinated fashion. Lack of coordination in the past resulted in losses in scheduling and cost overruns. REPRESENTATIVE PHILLIPS remarked that one of the largest controversies is located on page 2, line 8, which originally referred to a private sector developer. That was amended to refer to private sector developers in the House Finance Committee. The current version, version I, now refers to private sector entity or entities, which is due to an agreement reached by all the groups. REPRESENTATIVE GREEN directed the committee's attention to page 2, lines 11 and 17, which refer to "proposals" in the plural form. He asked if that would indicate that this will be competitive and not a single entity. MR. ANDERSON informed the committee that the original legislation was written in the singular form as the drafter said their writing style is in the singular, which includes the plural. Therefore, version H added the plural language in order to provide clarification and allay any fears that this is a sole source [bid]. Mr. Anderson pointed out that language on page 2, lines 11-13, has be added in order to allow one to bid on one or up to two-thirds of the building projects. Therefore, one person would not end up with all of [the projects]. Number 0482 MR. ANDERSON turned to the qualifications. He noted that it was thought that the original bill included broad language, however there was some discussion [regarding the qualification language]. Mr. Anderson said that there doesn't seem to be a lot of difference [between the two versions], it seems to be semantics. The qualifications listed on page 2, lines 19-24, in version I are fine and can still achieve some savings by utilizing this coordinated approach. REPRESENTATIVE BERKOWITZ referred to page 2, subsection (d) and commented that there is no explicit discussion of monetary competition in monetary terms nor is there any liquidated damages provision. He asked if there is a reason why those should not be included in the selection criteria. MR. ANDERSON responded that he didn't have an answer. CHAIRMAN COWDERY indicated that [language referring to the liquidated damages] would be more appropriate in the contract itself. MR. ANDERSON answered that he believes that would be included in the RFP. REPRESENTATIVE PHILLIPS indicated agreement that it should be included in the RFP. Number 0587 REPRESENTATIVE JOULE inquired as to why one of the components that must be addressed by a RFP includes financial management. MR. ANDERSON stated that financial management is important in order to manage cash flow during the process of the construction project. If "we" are going to bond for these, it is important to have the financial management ability to schedule having the funds available when needed. Mr. Anderson felt that this is a worthwhile qualification, which also relates to the operation being bondable. REPRESENTATIVE BERKOWITZ referred to page 2, line 9, which refers to a private sector entity or entities. He noted that most of the discussion that he has had in regard to privatization has allowed for the possibility of public sector competition or participation as well. Representative Berkowitz expressed concern that limiting the language to refer to the private sector may limit the ability of the public sector's ability to be involved. REPRESENTATIVE PHILLIPS stated that she believes that is already clarified in the statutes regarding Rural Education Attendance Areas (REAA). Number 0747 REPRESENTATIVE JOULE moved that the committee adopt the following amendment: Page 2, line 10, following "process.": Insert "In developing the request for proposals, the department shall consult with the governing body of each regional education attendance area in which a rural school affected by the request for proposals in located." REPRESENTATIVE PHILLIPS commented that Representative Joule's amendment is in line with existing statute dealing with REAAs. REPRESENTATIVE JOULE pointed out that although the entire bill is dealing with REAAs, REAAs haven't been included at the table. He said, "This puts DOE right there." CHAIRMAN COWDERY asked if there was any objection to the amendment. There being no objection, the amendment was adopted. Number 0794 REPRESENTATIVE KOTT directed attention to the evaluation provision on page 3. He inquired as to whom the recommendations are made. He also asked if there is a time line in which this should occur. MR. ANDERSON explained that the intent [of this provision] is that this pilot program is strictly for the school construction projects that are funded in the fiscal year 2001. Therefore, there is an automatic sunset on this pilot program. The intent of this was that DOE would review this process and provide the legislature with a report with regard to recommendations to make it a better program. REPRESENTATIVE KOTT asked if there is the need to be specific on that point because that provision doesn't specify that DOE has to report to the legislature nor is a time line specified. MR. ANDERSON said that if there is to be an amendment, he would suggest [that the report] be [provided] at the completion of construction. He reminded the committee that the extended maintenance program following the turning over of the keys is important to the sponsor. REPRESENTATIVE PHILLIPS suggested that [on page 3, line 7, following "recommendations"] the language "to the legislature" could be inserted in order to provide clarification. However, she pointed out that until this pilot program has been in place, "we're" not going to know what steps to take next. Therefore, she didn't think they should go into any further detail. REPRESENTATIVE JOULE asked if it would be advantageous to have periodic reviews in order to track [the progress of the program]. REPRESENTATIVE PHILLIPS pointed out that would revert back to the maintenance plan on page 2 as the maintenance plan would extend for a period after the construction is completed. REPRESENTATIVE JOULE interjected that an annual review would work. REPRESENTATIVE PHILLIPS suggested that on page 3, line 6, following "make" insert "annual" and on line 7, following "recommendations" insert the language "to the legislature". REPRESENTATIVE PHILLIPS specified that the department is going to make [recommendations] to the legislature. REPRESENTATIVE BERKOWITZ asked if this would preclude the department from making the determination that the program fails and the department wants to end it. REPRESENTATIVE PHILLIPS reiterated that the department would have to come before the legislature on this. Number 1062 REPRESENTATIVE BERKOWITZ moved that the committee adopt the following: Page 1, line 7, Delete "and do not address" Insert "by addressing" There being no objection, the amendment was adopted. Number 1094 REPRESENTATIVE PHILLIPS moved to report CSHB 445 [LS1596\I, Chenoweth/Ford, 4/18/00] as amended out of committee with individual recommendations. There being no objection, it was so ordered and CSHB 445(RLS) was reported from the House Rules Standing Committee. ADJOURNMENT The House Rules Standing Committee meeting was recessed to the call of the chair at 9:19 a.m. [This meeting was not reconvened.]