SENATE STATE AFFAIRS COMMITTEE  April 25, 1995 4:38 p.m. MEMBERS PRESENT Senator Bert Sharp, Chairman Senator Randy Phillips, Vice-Chairman Senator Loren Leman MEMBERS ABSENT Senator Jim Duncan Senator Dave Donley COMMITTEE CALENDAR SENATE BILL NO. 143 "An Act ratifying an agreement between the Alaska Housing Finance Corporation and the commissioner of revenue and making certain pledges to obligees of the corporation regarding that agreement; relating to the authorization for and the issuance of bonds by the Alaska Housing Finance Corporation to pay for the costs of repair and rehabilitation of student housing facilities of the University of Alaska; and providing for an effective date." SENATE BILL NO. 144 "An Act relating to the authorization for and the issuance of revenue bonds by the University of Alaska to pay for the costs of repair and rehabilitation of buildings and other structures, excluding student housing and dormitories, of the University of Alaska; expanding the uses of the Alaska debt retirement fund to allow financing of the repair and rehabilitation of University of Alaska facilities; and providing for an effective date." CS FOR HOUSE BILL NO. 13(STA) "An Act requiring persons filing for nomination for, or campaigning for election for, state elective office, persons authorized to make or incur political campaign expenditures before formally filing for nomination to state elective office, and groups acting on behalf of any of these, to file certain election campaign finance disclosure reports." CS FOR HOUSE BILL NO. 44(FIN) am "An Act relating to reporting by permittees, licensees, and vendors; relating to municipal regulation of charitable gaming; providing that a political group is not a qualified organization for purposes of charitable gaming, other than raffles, and relating to those raffles; relating to identification to the public of each permittee that will benefit from the sale of each pull-tab series and each bingo session; providing that the proceeds from charitable gaming, other than certain raffles conducted by a political organization, may not be contributed to a political party or other political group; and providing for an effective date." PREVIOUS SENATE COMMITTEE ACTION SB 143 - See State Affairs minutes dated 4/20/95. SB 144 - See State Affairs minutes dated 4/20/95. HB 13 - No previous senate committee action. HB 44 - No previous senate committee action. WITNESS REGISTER Dan Fauske, Executive Director Alaska Housing Finance Corporation Department of Revenue P.O. Box 101020, Anchorage, AK 99510-1020¶561-1900 POSITION STATEMENT: testified on SB 143 Bill Howe, Deputy Commissioner Department of Revenue P.O. Box 110405, Juneau, AK 99811-0405¶465-4880 POSITION STATEMENT: testified on SB 143 & SB 144 Wendy Redman University of Alaska P.O. Box 155000, Fairbanks, AK 99775¶474-7311 POSITION STATEMENT: supports SB 143 & SB 144 Jeff Logan, Aide to Representative Green State Capitol, Juneau, Alaska, 99801-1182¶465-4931 POSITION STATEMENT: prime sponsor of HB 13 Brooke Miles, Administrator Alaska Public Offices Commission P.O. Box 110222, Juneau, AK 99811-0222¶465-4864 POSITION STATEMENT: supports HB 13 Tom Anderson, Aide to Representative Martin State Capitol, Juneau, Alaska, 99801-1182¶465-3783 POSITION STATEMENT: prime sponsor of HB 44 ACTION NARRATIVE SSTA - 4/25/95 TAPE 95-20, SIDE A Number 001 SB 143 AHFC TRANSFERS TO GENERAL FUND; BONDS CHAIRMAN SHARP calls the Senate State Affairs Committee to order at 4:38 p.m. and brings up SB 143 as the first order of business before the committee. The chairman calls the first witness. Number 020 DAN FAUSKE, Executive Director, Alaska Housing Finance Corporation, testifying from Anchorage, thinks SB 143 represents a significant accomplishment, in that it would establish a prudent, manageable transfer of cash from AHFC to the state. It will also enable the corporation to issue bonds for University of Alaska deferred maintenance. Mr. Fauske notes he has submitted to the committee a press release from Standard & Poors (S&P) in support of the arrangement set out in SB 143. Number 095 BILL HOWE, Deputy Commissioner, Department of Revenue, distributes to committee members a draft copy of the agreement between the Commissioner of the Department of Revenue and AHFC. This agreement lists the proposed amounts of money that will be transferred from AHFC to the state. The amounts are: $70,000,000 in FY 1996, and $50,000,000 for FY 1997-FY 2000. Mr. Howe states AHFC and the Department of Revenue both feel this is a fair agreement. MR. HOWE informs the committee that if this agreement is approved, S&P will remove AHFC from a credit watch. Number 155 SENATOR RANDY PHILLIPS asks if other scenarios have been explored. Number 160 MR. FAUSKE replies other amounts and scenarios were discussed. But this was the agreement which was reviewed most extensively. SENATOR RANDY PHILLIPS asked if S&P is looking for stability. MR. FAUSKE responds that they are looking for stability and predictability. SENATOR RANDY PHILLIPS thinks it would be predictable for the legislature to take $235,000,000 right now, and not take anything else in the future. Are there any other scenarios S&P would approve? MR. HOWE believes S&P does not want to see more than the total amount the corporation earns per year taken out in any one year. However, he thinks there is some flexibility as to how much comes out when. Number 215 SENATOR RANDY PHILLIPS asks what happens if AHFC's bond rating is downgraded. MR. FAUSKE responds that if the bond rating went from AA to A, it would cost an additional $13,200,000 over the life of the bond. SENATOR RANDY PHILLIPS asked what the impact would be to individual borrowers. Number 235 MR. FAUSKE replies it would raise mortgage rates by a half to a full percent. Number 240 MR. HOWE adds that there are several larger risks seen by the administration than having the bond rating drop from AA to A. First, is the risk of ratings being withdrawn on outstanding bonds. That would have the effect of turning them into junk bonds. Secondly, the administration is concerned that AHFC will be unable to float new bonds. Number 265 CHAIRMAN SHARP thinks the legislature will have to give assurances regarding how much money will be withdrawn, and when it will be withdrawn. Hopefully we can arrive at a solution that will offer stability, while still returning some money to the general fund. Number 295 WENDY REDMAN, University of Alaska, urges passage of SB 143. Number 320 SENATOR LEMAN makes a motion to discharge SB 143 from the Senate State Affairs Committee with individual recommendations. CHAIRMAN SHARP, hearing no objection, orders SB 143 released from committee with individual recommendations. SSTA - 4/25/95 Number 325 SB 144 FINANCING REPAIR/REHAB OF U AK BLDGS SENATOR SHARP brings up SB 144 as the next order of business before the Senate State Affairs Committee and calls the first witness. Number 330 WENDY REDMAN, University of Alaska, informs the committee that SB 144 is a back-up measure, in case money is not available next year for deferred maintenance. Number 355 BILL HOWE, Deputy Commissioner, Department of Revenue, states SB 144 is predicated on the ability of AHFC to float bonds. CHAIRMAN SHARP asks if SB 144 is simply authorizing next year's needs. [Mr. Howe nods "Yes."] Number 365 SENATOR LEMAN makes a motion to discharge SB 144 from the Senate State Affairs Committee with individual recommendations. CHAIRMAN SHARP, hearing no objection, orders SB 144 released from committee with individual recommendations. SSTA - 4/25/95 Number 370 HB 13 CAMPAIGN FILINGS & DISCLOSURES SENATOR SHARP brings up HB 13 as the next order of business before the Senate State Affairs Committee and calls the first witness. JEFF LOGAN, Aide to Representative Green, prime sponsor of HB 13, relays information contained in the sponsor statement. Reasons for campaign disclosure include an informed electorate, deterrence of corruption and the avoidance of the appearance of corruption, and detecting violations of contribution limits. HB 13 would require candidates whose name is not going to be on the primary election ballot to make campaign disclosure reports, just as all other candidates are required to do. The sponsor has worked with APOC on this legislation, and APOC supports this legislation. There is a zero fiscal note. HB 13 passed the house with no opposition. Number 415 BROOKE MILES, Administrator, Alaska Public Offices Commission, states APOC has worked with the sponsor of HB 13 and supports the bill. HB 13 will not have a fiscal impact. This bill would require complete disclosure. SENATOR LEMAN makes a motion to discharge HB 13 from the Senate State Affairs Committee with individual recommendations. Number 430 CHAIRMAN SHARP, hearing no objection, orders HB 13 released from committee with individual recommendations. SSTA - 4/25/95 Number 434 HB 44 GAMING PROCEEDS/DEFINE CHARITABLE ORG'NS SENATOR SHARP brings up HB 44 as the next order of business before the Senate State Affairs Committee and calls the first witness. Number 440 TOM ANDERSON, Aide to Representative Martin, prime sponsor of HB 44, states that Representative Martin is begrudgingly pushing on with the bill; he believes it has been gutted, with it's intent and effectiveness severely dampened. The original intent was to eliminate any monies from charitable gaming being contributed to political candidates; but currently, that is not how the bill reads. We are just looking at removing permits from political groups. Political groups would only be allowed to hold raffles. Number 476 SENATOR LEMAN makes a motion to adopt amendment #1 to HB 44. SENATOR RANDY PHILLIPS asks to be shown as a co-sponsor on amendment #1. Amendment #1 by Leman and Phillips: Page 4, lines 24-26: Delete "a political party as defined under AS 15.60, or to an organization or club organized under or formally affiliated with a political party" Insert "(i) a political party as defined under AS 15.60; (ii) an organization or club organized under or formally affiliated with a political party; (iii) a political group as defined under AS 15.13.130, including a group that seeks to influence the opinions of voters concerning the election of a candidate for public office, a constitutional amendment, an initiative, or another ballot measure" Page 5, line 3: Delete "or" Insert "," Page 5, line 4, after "party,": Insert "to a political group as defined under AS 15.60, to a group as defined under AS 15.30.130," Number 483 CHAIRMAN SHARP, hearing no objection, states amendment #1 to HB 44 has been adopted. Number 485 CHAIRMAN LEMAN makes a motion to adopt amendment #2 to HB 44. Amendment #2 by Leman: Page 3, lines 4-6: Delete "permittees to a political(A) candidate or the candidate's campaign organization; or(B) group;" Insert "permittees, licensees, and vendors to a political candidate; reports must include all donations or contributions made from the last date covered by any previous report to three days before the due date of the report and shall be made at the following times: (A) 30 days before an election involving the candidate; (B) one week before an election involving the candidate; (C) 10 days after an election involving the candidate; and (D) February 15 for donations and contributions made that were not reported during the previous year; the department shall, for a period of time set by the department, suspend or revoke the permit, license, or vendor registration of a permittee, licensee, or vendor that fails to report at the times and in the manner provided in this paragraph;" Number 490 CHAIRMAN SHARP, hearing no objection, states amendment #2 to HB 44 has been adopted. Number 492 SENATOR LEMAN makes a motion to adopt amendment #3 to HB 44. Amendment #3 by Leman (conceptual amendment): Add language requiring donating entities to notify candidates if any of their donations come from gaming sources. Number 500 CHAIRMAN SHARP, hearing no objection, states amendment #3 to HB 44 has been adopted. SENATOR LEMAN makes a motion to discharge HB 44 from the Senate State Affairs Committee with individual recommendations. Number 505 CHAIRMAN SHARP, hearing no objection, orders HB 44 released from committee with individual recommendations. Number 508 CHAIRMAN SHARP adjourns the Senate State Affairs Committee meeting at 5:15 p.m.