Legislature(2009 - 2010)HOUSE FINANCE 519

04/11/2010 12:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 6:30 pm Today --
Moved CSHB 296(ENE) Out of Committee
Moved Out of Committee
Heard & Held
Moved CSHB 424(FIN) Out of Committee
Moved Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 424                                                                                                            
     "An Act providing  for and relating to  the issuance of                                                                    
     general obligation  bonds in a principal  amount of not                                                                    
     more  than $1,000,000  for the  purpose  of paying  the                                                                    
     cost of  education projects for public  schools and the                                                                    
     University of  Alaska; and  providing for  an effective                                                                    
6:26:02 PM                                                                                                                    
Co-Chair Hawker  MOVED to  ADOPT CS  HB 424(FIN)  Work Draft                                                                    
26-LS1649\P as a working document before the committee.                                                                         
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
JAMES   ARMSTRONG,  STAFF,   REPRESENTATIVE  BILL   STOLTZE,                                                                    
explained the CS.  He stated that HB 424 is  a request for a                                                                    
$384.2 million  general fund bond  authority and  if adopted                                                                    
would be sent to voters for the November 2010 general                                                                           
Mr. Armstrong presented a brief summary of the legislation                                                                      
by section:                                                                                                                     
     · Section 1, specifies the amount of the bond.                                                                             
     · Section 2, contains the education project fund. He                                                                       
        added that is the standard language for bond bills.                                                                     
     · Section 3, relates to the Mount Edgecombe High                                                                           
        School aquatic  facility  in  Sitka  and  the  State                                                                    
        Library Archives and Museum facility  in Juneau that                                                                    
        will be bonded in the amount of $20 million for each                                                                    
        project ($40 million total).                                                                                            
     · Section 4, identifies three school replacements and                                                                      
        renovations in western Alaska for a  total of $128.5                                                                    
Co Chair  Stoltze interjected that  these three  schools are                                                                    
referred to  as the  Kasayulie Schools  in reference  to the                                                                    
lawsuit and eventual judgment that  lead to changes in rural                                                                    
school funding.                                                                                                                 
Mr. Armstrong continued the sectional presentation with:                                                                        
     · Section 5 identifies the University of Alaska's                                                                          
        Valley Center for Art and Learning  on the Matanuska                                                                    
        Susitna (Mat-Su)  Campus,  the  Community Arena  and                                                                    
        Athletic  Center  in  Anchorage,  the  Life  Science                                                                    
        Classroom in Fairbanks,  two projects for  the Kenai                                                                    
        Campus's student  housing and  Career and  Technical                                                                    
        Education  Center  and  the   Prince  William  Sound                                                                    
        Community College  campus  renovation  and  renewal.                                                                    
        Total $161.8 million.                                                                                                   
     · Section 6 identifies the Department of Fish and                                                                          
        Game's Near Island  Research facility  {$20 million)                                                                    
        in Kodiak.                                                                                                              
     · Section 7 names the Department of Commerce,                                                                              
        Community and  Economic  Development  grants  for  a                                                                    
        total  of  $33.9  million.  He  noted  the  list  of                                                                    
        projects begin on  page 4,  of the  legislation. The                                                                    
        first seven projects are for library construction in                                                                    
        Anchorage,  Cordova,  Kenai,  Mat-Su,  North  Slope,                                                                    
        Petersburg,  and  Seward.   The  eighth   and  ninth                                                                    
        projects are located on Prince of Wales Island for a                                                                    
        vocational  education  center  in  Klawock  and  the                                                                    
        Northwest Magnate School and Kotzebue High School in                                                                    
        the Northwest Arctic Borough.                                                                                           
     · Section 8 appropriates the cost of issuing the bond                                                                      
        per the Department of Revenue; total $4,610.400.                                                                        
6:30:14 PM                                                                                                                    
Mr. Armstrong noted  that the bonds were  eligible under the                                                                    
Build  America Bond  Act  as part  of  the federal  stimulus                                                                    
program  (ARRA); the  bonds  would need  to  be sold  before                                                                    
December  31,   2010.  Upon   voter  approval   the  federal                                                                    
government  will pay  thirty five  percent  of the  interest                                                                    
over the twenty year life of the bond.                                                                                          
JERRY  BURNETT, DEPUTY  COMMISSIONER, DIVISION  OF TREASURY,                                                                    
DEPARTMENT  OF  REVENUE,  clarified  that  the  program  was                                                                    
extended through December 2011.                                                                                                 
Representative Doogan asked if  the identified projects were                                                                    
pieces  of   projects  rather   than  whole   projects.  Mr.                                                                    
Armstrong  replied  that  only   two  University  of  Alaska                                                                    
projects (projects  two and three) were  funded in portions,                                                                    
their  balance will  be included  in the  capital budget  as                                                                    
general funds.  In the  event the bonds  are not  adopted by                                                                    
voters the  two projects would move  forward with previously                                                                    
appropriated cash on  hand; $25 million for an  arena on the                                                                    
Anchorage Campus and $38 million  for a life sciences center                                                                    
for the Fairbanks campus.                                                                                                       
Co-Chair  Stoltze  interjected  that   $20  million  of  the                                                                    
existing funds are comprised of University revenue bonds.                                                                       
6:34:07 PM                                                                                                                    
Co-Chair Hawker announced that not  all of the bond projects                                                                    
in  HB 424  are for  entirely  new facilities.  Many of  the                                                                    
projects  such as  the Northwest  Magnet School  and library                                                                    
projects   are  for   renovations,  improvements,   etc.  He                                                                    
cautioned against creating public misperceptions.                                                                               
Mr. Armstrong mentioned that the  library projects on page 4                                                                    
were  currently  included in  the  Senate's  version of  the                                                                    
capitol budget and if approved  as part of the bond package,                                                                    
it was the  intent of the chair to remove  them in the House                                                                    
Representative Doogan  asked for more information  about the                                                                    
Near  Island   Research  Facility   listed  in   Section  6.                                                                    
Representative Austerman  explained that it will  be located                                                                    
in  Kodiak  next to  the  National  Oceanic and  Atmospheric                                                                    
Association   (NOAA)  and   the  University's   Fishery  and                                                                    
Technology  Center   buildings.  The  facility   will  house                                                                    
Department  of   Fish  and   Game  offices,   research,  and                                                                    
educational facilities.                                                                                                         
6:38:14 PM                                                                                                                    
Representative Gara  cited the  university projects  on page                                                                    
3, line  8, and asked  what the regent priorities  were. Co-                                                                    
Chair  Stoltze  stated  that projects  number  2  (Community                                                                    
arena  and athletic  center) and  3 (Life  Science Classroom                                                                    
and laboratory building) were  regents priorities. The other                                                                    
projects have been on the regents lists in the past.                                                                            
Mr. Armstrong pointed out that  all of the ten previous bond                                                                    
propositions put forward to voters  since statehood had been                                                                    
Representative   Foster   underscored  the   importance   of                                                                    
resolving the  Kasayulie case and  contended that  the three                                                                    
school projects were  a positive step. He  reported that the                                                                    
Alakanuk  School was  two hundred  and  twenty percent  over                                                                    
Co-Chair Hawker  relayed that the  three school  projects in                                                                    
HB 424 were  the three top schools by ranking  on the school                                                                    
construction list  prepared by  the Department  of Education                                                                    
and Early Development. Mr. Armstrong affirmed.                                                                                  
Representative  Gara asked  if any  projects in  HB 424  are                                                                    
included in the Senate version of the capital budget bill.                                                                      
6:41:36 PM                                                                                                                    
Mr. Armstrong listed  the seven library projects  on page 4,                                                                    
lines 1-12,  that are in  the Senate version of  the capital                                                                    
budget:  Loussac  Library,  Anchorage;  Cordova  Center  and                                                                    
Library    Cordova;  Community  Library  expansion    Kenai;                                                                    
Sutton  Community Library  and  Resource Center,  Matanuska-                                                                    
Susitna  ;  Tuzzy  Library expansion,  North  Slope;  Public                                                                    
Library, Petersburg; Community library ,Seward.                                                                                 
Co-Chair Stoltze closed public testimony.                                                                                       
Mr. Armstrong cited that the  Department of Revenue's fiscal                                                                    
note  accompanying  the  legislation   depicts  the  sum  of                                                                    
$29,095,000  in  expenditures  for  the out  years  FY  2012                                                                    
through FY 2016.  The amount will be decreased  in a revised                                                                    
fiscal note to $28,773,000.                                                                                                     
6:46:08 PM                                                                                                                    
Representative  Doogan  asked  if  the intent  was  to  find                                                                    
complete funding  for the  two projects  that would  only be                                                                    
partially funded  by the  general obligations  bonds, before                                                                    
the end of session. Co-Chair Stoltze affirmed.                                                                                  
Representative Gara  requested to  hear from  the university                                                                    
regarding  the  university  projects.  He  wondered  if  the                                                                    
university was in support of the list.                                                                                          
6:49:34 PM                                                                                                                    
WENDY   REDMAN,   VICE    PRESIDENT,   STATEWIDE   PROGRAMS,                                                                    
UNIVERSITY   OF  ALASKA,   responded  that   the  university                                                                    
supported  the projects.  She noted  that the  Life Sciences                                                                    
facility  in  Fairbanks  was  the  major  priority  for  the                                                                    
university  this year.  The other  projects  were on  campus                                                                    
priority lists.                                                                                                                 
Representative   Gara   inquired  about   the   university's                                                                    
priority for funding for engineering  buildings.  Ms. Redman                                                                    
replied  that  the  university  requested  $10  million  for                                                                    
planning  engineering  facilities   for  the  Anchorage  and                                                                    
Fairbanks campuses.  She reported  that the request  was not                                                                    
included in the governor's  budget. They were considered the                                                                    
most important  projects that the university  wanted to move                                                                    
forward  after  the  Life   Sciences  building.  The  Senate                                                                    
included $5 million in the  capital budget for the Anchorage                                                                    
engineering facility and nothing for Fairbanks.                                                                                 
Co-Chair Stoltze  suspected that all the  bond projects were                                                                    
on the regents' list at some point.                                                                                             
6:53:14 PM                                                                                                                    
Representative  Gara voiced  frustrations with  the shortage                                                                    
of  university  housing  in Anchorage.  He  felt  that  more                                                                    
housing at  the main  campuses of Anchorage,  Fairbanks, and                                                                    
Juneau would create a  vibrant, statewide university system.                                                                    
Ms. Redman reported that the  university created a committee                                                                    
to work on housing in  collaboration with AHFC to facilitate                                                                    
the  project  and  to  expect  a plan  to  come  before  the                                                                    
legislature in the near future.                                                                                                 
Representative Fairclough reported that  she had two boys at                                                                    
the University  of Alaska  in Fairbanks,  in order  to avoid                                                                    
any conflicts of interest.                                                                                                      
Representative Gara  inquired if the $20  million Department                                                                    
of Fish and Game Near  Island facility was a state priority.                                                                    
Representative Austerman explained that  the project was the                                                                    
top priority  on the capital  improvement list for  the City                                                                    
and Borough of Kodiak.                                                                                                          
Representative Gara  wondered if it  was a priority  for the                                                                    
Department of  Fish and  Game. Representative  Austerman was                                                                    
not certain.                                                                                                                    
6:58:51 PM                                                                                                                    
Representative  Fairclough spoke  in support  of the  "Build                                                                    
America Bond"  projects. She commented that  projects had to                                                                    
be  chosen that  met the  requirements of  the program.  She                                                                    
voiced  that she  supported the  legislation  and liked  the                                                                    
concept  of the  thirty five  percent interest  payback. She                                                                    
believed the  package helped the  state save money  on these                                                                    
Representative Salmon  wondered if  the bond  package amount                                                                    
was going to  grow. Co-Chair Stoltze stated that  he did not                                                                    
think the amount could grow. He  felt that there was a limit                                                                    
to the  debt threshold the  voters would approve.  He stated                                                                    
that the legislature would act  responsibly and leverage the                                                                    
available federal money over a  fair geographical balance in                                                                    
the state according to the constraints of the bond program.                                                                     
Representative Gara  thought that  there has  been a  lot of                                                                    
criticism of the  federal government within the  state but a                                                                    
readiness to accept  federal funds. He pointed  out that the                                                                    
bill  was an  example of  something the  President has  done                                                                    
that was getting people back to work.                                                                                           
7:02:28 PM                                                                                                                    
Co-Chair Hawker MOVED to report CSHB 424(FIN) out of                                                                            
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
CSHB 424(FIN) was REPORTED out of Committee with a "do                                                                          
pass" recommendation and with attached new fiscal note by                                                                       
the Department of Revenue.                                                                                                      

Document Name Date/Time Subjects
Energy Savings Performance Contracting Summary-DOT.pdf HFIN 4/11/2010 12:30:00 PM
HB 296
HB 296 AHFC SEP BondsL Sec Analysis.pdf HFIN 4/11/2010 12:30:00 PM
HB 296
HB 296 SEP bonds Sponsor Statement[1].pdf HFIN 4/11/2010 12:30:00 PM
HB 296
HB416 Sectional Analysis ver R.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Sponsor Statement ver R.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Supporting Documents History UMIFA and UPMIFA.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Supporting Documents UPMIFA_map.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Supporting Documents-Letter AG 3-18-10.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Supporting Documents-Letter AG 3-18-10.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Supporting Documents-Letter Foreaker Group.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
HB416 Supporting Documents-Why Adopt UPMIFA.pdf HFIN 4/11/2010 12:30:00 PM
HB 416
10 HB 421 FN - pay raise 2010.pdf HFIN 4/11/2010 12:30:00 PM
HB 421
HB421-LEG-LEG-3-30-10NEW.pdf HFIN 4/11/2010 12:30:00 PM
HB 421
HB 421 Gov Transmittal Letter.pdf HFIN 4/11/2010 12:30:00 PM
HB 421
hearing_req_HB421_040710.pdf HFIN 4/11/2010 12:30:00 PM
HB 421
SUmmary by Dept hb 421 SB 310.pdf HFIN 4/11/2010 12:30:00 PM
HB 421
SB 310
H FIN letters of support.pdf HFIN 4/11/2010 12:30:00 PM
SB199-DHSS-MAA-2-9-10.pdf HFIN 4/11/2010 12:30:00 PM
SB 199
SFIN backup information.pdf HFIN 4/11/2010 12:30:00 PM
SB 199
sponsor statement.pdf HFIN 4/11/2010 12:30:00 PM
SB 199
HB421-Ex Branch-4-8-10.pdf HFIN 4/11/2010 12:30:00 PM
HB 421
CSHB424(FIN)-DOR-TRS-4-10-10 GO Bonds for Education.pdf HFIN 4/11/2010 12:30:00 PM
HB 424
HB 424 Sample Ballot.pdf HFIN 4/11/2010 12:30:00 PM
HB 424
CS WORKDRAFT HB424 (FIN) P VERSION and Sectional.pdf HFIN 4/11/2010 12:30:00 PM
HB 424