SENATE STATE AFFAIRS COMMITTEE  April 11, 1995 3:27 p.m. MEMBERS PRESENT Senator Bert Sharp, Chairman Senator Randy Phillips, Vice-Chairman Senator Loren Leman Senator Dave Donley OTHER SENATORS PRESENT Senator Rick Halford MEMBERS ABSENT Senator Jim Duncan COMMITTEE CALENDAR SENATE BILL NO. 136 "An Act making appropriations for capital project matching grant funds and to capitalize funds; making, amending, and repealing capital appropriations; and providing for an effective date." PREVIOUS SENATE COMMITTEE ACTION SB 136 - See Community & Regional Affairs minutes dated 3/29/95. WITNESS REGISTER Dan Fauske, CEO Alaska Housing Finance Corporation P.O. Box 101020, Anchorage, AK 99510-1020¶561-1900 POSITION STATEMENT: testified on SB 136 Les Campbell Alaska Housing Finance Corporation P.O. Box 101020, Anchorage, AK 99510-1020¶561-1900 POSITION STATEMENT: testified on SB 136 Darryl Johnson Div. of Mental Health & Developmental Disabilities Department of Health & Social Services P.O. Box 110620, Juneau, AK 99811-0620¶465-3370 POSITION STATEMENT: testified on SB 136 Tom Lehman Department of Health & Social Services P.O. Box 110601, Juneau, AK 99811-0601¶465-3030 POSITION STATEMENT: testified on SB 136 Tim Sullivan, Executive Director Alaska Craftsman Home Program POSITION STATEMENT: testified on SB 136 Wendy Redman University of Alaska P.O. Box 155000, Fairbanks, AK 99775¶474-7311 POSITION STATEMENT: testified on SB 136 Royce Weller, Budget Analyst Office of Management & Budget P.O. Box 110020, Juneau, AK 99811-0020¶465-4694 POSITION STATEMENT: testified on SB 136 ACTION NARRATIVE TAPE 95-17, SIDE A Number 001 SSTA - 4/11/95 SB 136 APPROP: FY 96 CAPITAL PROJECTS BUDGET CHAIRMAN SHARP calls the Senate State Affairs Committee to order at 3:27 p.m. and brings up SB 136 as the first order of business before the committee. The chairman calls the first witness. Number 020 DAN FAUSKE, CEO, Alaska Housing Finance Corporation (AHFC), introduces Les Campbell from AHFC's budget office. Mr. Fauske reads a written statement outlining AHFC's mission. Number 078 SENATOR DONLEY asks what the difference is between corporate match and corporate receipts. MR. FAUSKE responds both are corporate receipts. Number 090 LES CAMPBELL, from AHFC's budget office begins a brief description of line items in SB 136. MR. CAMPBELL informs the committee that HUD (Housing and Urban Development) will not allow public housing to be demolished unless the buildings are being replaced. Number 160 MR. CAMPBELL continues with his description of line items in SB 136. CHAIRMAN SHARP asks how much the corporate receipts were last year for line item #3. MR. CAMPBELL responds that last years corporate receipts were $1.5 million in the operating budget and $5.7 million in the capital budget. SENATOR DONLEY asks Mr. Campbell to find out how it was decided how much money goes to rural areas and how much money goes to urban areas. Number 240 CHAIRMAN SHARP asks for more information on the ISER (Institute for Social & Economic Research) survey. MR. FAUSKE replies that AHFC paid ISER to conduct the survey, which was done in the Anchorage Bowl area. Number 260 CHAIRMAN SHARP asks that all data on that survey be submitted to the committee. Number 270 MR. CAMPBELL continues with his review of line items in SB 136. Number 330 SENATOR DONLEY expresses concern over line item #7, which is a grant to replace homes in the event of a natural disaster, and asks AHFC to submit more information to the committee regarding that line item. MR. CAMPBELL continues with his review of line items in SB 136. Number 430 SENATOR DONLEY asks what the term "congregate housing" means. MR. CAMPBELL replies that the money goes to special needs groups. Either multi-family housing special needs, or for somebody with a disability. This money is not designated for seniors, although senior facilities could apply for the program. SENATOR DONLEY asks if it is a new program. MR. CAMPBELL responds it was funded last year under "other competitive grants." Number 450 MR. CAMPBELL continues with his review of line items in SB 136. Number 590 [It is clarified by AHFC that "other receipts" is not necessarily always "corporate receipts."] TAPE 95-17, SIDE B Number 595 MR. CAMPBELL continues with his review of line items in SB 136. MR. CAMPBELL notes that most assistance doesn't go directly to individuals; It goes into a project. Number 492 SENATOR DONLEY asks the chairman if he was intending to make revisions or amendments to SB 136 today in committee. CHAIRMAN SHARP responds he would just like to compile information and recommendations for the Finance Committee. He hopes that input and follow-up information can be submitted to the Finance Committee. SENATOR DONLEY asks about line items #25 and #26. Number 480 MR. CAMPBELL informs the committee that #26 was under a different program in prior years, but #25 is a new program. CHAIRMAN SHARP asks Mr. Campbell if #26 was general funds in prior fiscal years. MR. CAMPBELL responds that is correct. Number 475 SENATOR DONLEY asks where corporate receipts come from. MR. FAUSKE replies that corporate receipts come from a combination of federal funds and also from redirection of profits made by AHFC. SENATOR DONLEY asks, since people making mortgage payments to AHFC are funding these programs, if we shouldn't just cut some of these programs in order to lower mortgage payments. MR. FAUSKE responds that interest rates for mortgages are based on bond programs and the prevailing market rate. Also, people making mortgage payments to AHFC are only one source of revenue. Number 450 CHAIRMAN SHARP asks what the anticipated net profit for AHFC will be in FY 96. MR. CAMPBELL replies that in 1995, it was $68,000,000; in 1994 it was $100,000,000; in 1993 it was $79,000,000. SENATOR DONLEY asks for clarification on whether or not AHFC has to pay taxes on its' profits. MR. CAMPBELL responds that AHFC issues both taxable and tax-exempt debt. CHAIRMAN SHARP asks how many of these projects were in existence under ASHA (Alaska State Housing Authority) before the merger of ASHA and AHFC. Number 415 MR. CAMPBELL replies that the public housing projects are ASHA projects. Number 385 DARRYL JOHNSON, Division of Mental Health & Developmental Disabilities, Department of Health & Social Services, informs the committee that item #25 is necessary to build special housing for 12 people still in Harborview Developmental Center. Without those funds, the department will not be able to close down Harborview. Number 377 SENATOR HALFORD asked where item #25 was originally funded, or if it is a new budget item. MR. JOHNSON replies he does not know and will have to get back to the committee regarding that question. TOM LEHMAN, Department of Health & Social Services, adds that item CHAIRMAN SHARP asks if item #25 could qualify for the program under item #12. MR. CAMPBELL responds it could qualify under item #12. TIM SULLIVAN, Executive Director, Alaska Custom Home Program, speaks regarding item #16, and explains the program. Number 330 CHAIRMAN SHARP announces that this meeting is to gather information in order to report to the Finance Committee. The Finance Committee does not intend to finance new projects or programs, or expand existing programs without a lot of scrutiny. Number 300 WENDY REDMAN, University of Alaska, notes that a handout from the university was distributed to committee members. The handout contains a summary of the university's total capital requests. Ms. Redman gives a brief overview of the university's capital projects. Number 195 CHAIRMAN SHARP notes that the negative appropriation listed under the Alaska Railroad Corporation is a lapse of funds back into the general fund. The chairman calls for an at ease at 4:51 p.m. CHAIRMAN SHARP calls the Senate State Affairs Committee back to order at 4:55 p.m. SENATOR RANDY PHILLIPS makes a motion to discharge SB 136 from the Senate State Affairs Committee with individual recommendations. Number 168 CHAIRMAN SHARP, hearing no objection, orders SB 136 released from committee with individual recommendations. CHAIRMAN SHARP adjourns the Senate State Affairs Committee meeting at 4:55 p.m.