MINUTES SENATE FINANCE COMMITTEE May, 1998 9:05 p.m. TAPES SFC 98 # 156, Side A (000-448) CALL TO ORDER Senator Bert Sharp, Co-Chair, convened the meeting at approximately 9:05 p.m. PRESENT In addition to Co-Chair Sharp, Senators Pearce, Donley, Torgerson, Adams, Parnell and Phillips were present when the meeting was convened. Also Attending: Senator JERRY MACKIE; Senator ROBIN TAYLOR; ANNALEE MCCONNELL, Director, Office of Management and Budget, Office of the Governor; DUGAN PETTY, Director, Division of General Services, Department of Administration; KAREN REHFELD, Director, Division of Education Support Services, Department of Education; JANET CLARKE, Director, Division of Administrative Services, Department of Health and Social Services; KEN BISCHOFF, Director, Division of Administrative Services, Department of Public Safety; DAN FAUSKE, Alaska Housing Finance Corporation, Department of Revenue; JOHN BITTNEY, AHFC, DOR; NANCY SLAGLE, Director, Division of Administrative Services, Department of Transportation and Public Facilities; CHRIS CHRISTENSEN, Staff Council, Alaska Court System; WENDY REDMOND, Vice President, University Relations, University of Alaska; MIKE GREANY, Director, Division of Legislative Finance; FRED FISHER and GINGER PATTON, Fiscal Analysts, DLF; and aides to committee members and other members of the Legislature. SUMMARY INFORMATION SENATE BILL NO. 360 "An Act authorizing the issuance of bonds in the amount of $257,600,000 by the Alaska Housing Finance Corporation for certain capital projects; relating to those bonds and to the appropriation of revenue of the Alaska Housing Finance Corporation; and providing for an effective date." CS FOR SENATE BILL NO. 360(FIN) "An Act authorizing the issuance of bonds by the Alaska Housing Finance Corporation for certain capital projects; relating to those bonds and to the appropriation of revenue of the Alaska Housing Finance Corporation; and providing for an effective date." AMEND #1: Senator Pearce moved for adoption. Senator Adams objected. Discussion was as follows. Co-Chair Sharp spoke to the amendment, which he sponsored. This amendment would delete amount in the title and also changed the amount listed in the body of the bill on page two, to $196,200,000, he explained. Senator Adams noted the reduction in the bond amount pointing out that this would eliminate funding for new rural schools. Co-Chair Sharp countered that elimination of the amount in the title just gave latitude by not stating an amount. He didn't want to make restrictions by stating an amount in the title. Senator Adams asked if that meant there would be an opportunity to reinstate the deleted projects when the bill reached the other body. Co-Chair Sharp affirmed. Senator Adams removed his objection. The amendment was ADOPTED without objection. AMEND #2: Senator Pearce moved for adoption. Co-Chair Sharp noted the amendment removed the section, which would repeal the bonding authority after the seven- year period. Without objection, the amendment was ADOPTED. BOND #3: Senator Pearce moved for adoption. Co-Chair Sharp explained the amendment he sponsored, saying it would add the project list as a separate section. Noting that the wrong version of the amendment was on the table, Senator Pearce REMOVED her motion. BOND #3 REV: Senator Pearce moved for adoption. Senator Adams objected. Discussion was as follows. Senator Adams wanted to know the cost of bonding some of the smaller projects such as those costing $25,000. He suggested that it might be cheaper to fund the projects through the general fund. He pointed out some specific small cost projects. Co-Chair Sharp pointed out that the projects were grouped together for bonding purposes. Senator Adams removed his objection. BOND #3A: Senator Pearce moved to amend BOND #3 REV to add language from BOND #3A. Senator Phillips objected. Senator Phillips said he felt the procedure was improper. Senator Adams stated that he would not object because the amendment contained good projects for the Pioneer Homes and the Department of Education for deferred maintenance. He noted there were projects missing from this version that had been included earlier. He detailed some of the ten schools he felt should have been included; saying that the smaller communities did not have the ability to bond school projects and therefore should be included. He said he would work to have them reinstated when the bill reached the other body. Co-Chair Sharp pointed out that a school district's projects had been erroneously removed from the bill and reinstated here. Senator Phillips didn't think this bill should be attached to SB 231. He felt the two should be separate. Co-Chair Sharp appreciated the concerns. The amendment to the amendment was ADOPTED by a vote of 5-1- 1. Senator Phillips cast the nay vote. Senator Torgerson was absent. BOND #3B: Senator Pearce moved to amend AMENDED BOND #3 REV to add language from BOND #3B. Senator Phillips objected. The amendment to the amended amendment was ADOPTED by a vote of 5-1-1. Senator Phillips cast the nay vote. Senator Torgerson was absent. BOND #3C: Senator Parnell moved to amend AMENDED BOND #3 REV to add language from BOND #3C. Senator Phillips objected. Senator Parnell pointed out that the language should read "page 95". This amendment would add $5.297 million in the bonding for McLaughlin Youth Center Detention Unit Probation Offices, he explained. He spoke of the need to improve the facility. The amendment to the amended amendment was ADOPTED by a vote of 5-1-1. Senator Phillips cast the nay vote. Senator Torgerson was absent. The motion was before the committee to adopt AMENDED BOND #3 REV. Senator Phillips objected. The amended amendment was ADOPTED by a vote of 5-1-1. Senator Phillips cast the nay vote. Senator Torgerson was absent. BOND #4: Senator Pearce moved for adoption. Senator Phillips objected. Co-Chair Sharp explained the amendment he sponsored as changing the fund source code to AHFC bonds from 1009 revenue bonds throughout the list. The amendment was ADOPTED by a vote of 5-1-1. Senator Phillips cast the nay vote. Senator Torgerson was absent. Senator Pearce offered a motion to move from committee the amended CS SB 360 (FIN). Senator Phillips objected. The bill was moved from committee by a vote of 4-2-1. Senators Phillips and Donley cast the nay votes. Senator Torgerson was absent. SENATE BILL NO. 231 "An Act making and amending capital appropriations and reappropriations and capitalizing funds; and providing for an effective date." CS FOR SENATE BILL NO. 231(FIN) "An Act making and amending capital, supplemental, and other appropriations; making appropriations to capitalize funds; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." DOR #1: Senator Adams moved to rescind action on the amendment. Co-Chair Sharp stated that the reason he originally opposed the amendment was because there was only a request with no backup. Since that time, backup had been provided and he was willing to reconsider the request to upgrade data input and interface equipment for the mainframe. He noted that the mainframe was Year 2000 compliant but that the software and data entry equipment needed to be upgraded in order to comply. The amendment would allow permanent fund money to be used for this Permanent Fund Division equipment used to process and distribute dividends. Action taken on the amendment was RESCINDED without objection. Senator Adams moved for adoption of the amendment. Senator Phillips objected. The amendment was ADOPTED by a vote of 5-1-1. Senator Phillips cast the nay vote. Senator Torgerson was absent. TECH #4: Senator Donley moved for adoption. Co-Chair Sharp noted this amendment was to fine-tune a correction. The amendment was ADOPTED without objection. TECH #5: Senator Pearce moved for adoption. Senator Adams objected for a question. Co-Chair Sharp explained that this amendment would restrict the use of the state match that previously authorized federal aid highway projects. The funds could not be used for aviation or other projects. The amendment was ADOPTED without objection. TECH #6: Senator Pearce moved for adoption. Co-Chair Sharp explained the amendment would change the funding source definition to general fund from bond fund. The amendment was ADOPTED without objection. Senator Adams pointed out that he had submitted three amendments that were not included in the packets to be considered. Co-Chair Sharp promised to look into it. SUP #23: Senator Pearce moved for adoption. Senator Adams objected for a question. Senator Pearce spoke to her motion saying it would once again amend Section 16 from an earlier version, or Section 31 in the new CS. She again explained the amendment would give FY 98 tobacco tax receipts to the Department of Education for school construction. She noted there was a lapse date of June 31, 1999. This latest language was offered at the request of the drafter, she said. Senator Adams asked that since the funds were to come from the previous year's deficient for school construction, did that make available the exact amount of $15 million that was put in for school construction. He noted the replacement of general funds with the tobacco tax receipts. Senator Pearce said that if and when SB 11 passed with a retroactive payment for school districts that had already incurred bonds for school construction, the FY 98 funds would be available to make payments on those bonds during FY99. If the legislation did not pass, the funds would not be allocated. Senator Adams remembered the debt service amount for the previous year was about $68 million of general funds. Senator Pearce stated that this amendment would only allocate money if SB 11 or similar legislation passed. The amendment was ADOPTED without objection. BOND #3 REV: Senator Pearce moved for adoption. Senator Phillips objected. BOND #3A: Senator Pearce moved to amend BOND #3 REV to add language from BOND #3A. Senator Phillips objected. The committee took an At Ease resuming at approximately 9:35 p.m. TAPE MALFUNCTION - portion of the meeting not recorded The committee AMENDED the amendment by a vote of 5-2. Senators Phillips and Donley cast the nay votes. BOND #3B: Senator Torgerson moved to amend BOND #3 REV to add language from BOND #3B. Senator Phillips objected. The committee AMENDED the amended amendment by a vote of 6- 1. Senator Phillips cast the nay vote. BOND #3C: Senator Pearce moved to amend BOND #3 REV to add language from BOND #3C. Senator Phillips objected. The committee AMENDED the amended amendment by a vote of 6- 1. Senator Phillips cast the nay vote. Senator Phillips maintained his objection to the adoption the main amendment. The committee ADOPTED the amended amendment by a vote of 5- 2. Senators Phillips and Donley cast the nay votes. BOND #4: Senator Pearce moved for adoption. Senator Phillips objected. The amendment was ADOPTED by a vote of 6-1. Senator Phillips cast the nay vote. BOND #5: Senator Adams moved for adoption. Senator Phillips objected. Senator Adams spoke to his motion. The amendment FAILED to be adopted by a vote of 1-6. Senator Adams cast the yea vote. BOND #6: Senator Adams moved for adoption. Senator Phillips objected. Senator Adams spoke to his motion. The amendment FAILED to be adopted by a vote of 1-6. Senator Adams cast the yea vote. BOND #7: Senator Adams moved for adoption. Senator Phillips objected. Senator Adams spoke to his motion. The amendment FAILED to be adopted by a vote of 1-6. Senator Adams cast the yea vote. This concluded the amendments for the bill. Senator Pearce offered a motion to move from committee CS SB 231 (FIN). Senator Phillips objected. The bill was moved from committee by a vote of 5-2. Senators Phillips and Adams cast the nay votes. Co-Chair Sharp announced the next committee meeting would begin the next morning at 9:00. Senator Pearce announced a conference committee the next day at 3:30 p.m. ADJOURNMENT Co-Chair Sharp adjourned the meeting at approximately 9:45 p.m. SFC-98 (7) 5/4/98 pm