Legislature(1995 - 1996)

04/27/1995 02:05 PM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 HB 281 - AHFC TRANSFERS TO GENERAL FUND; BONDS                              
 HB 282 - FINANCING REPAIR/REHAB OF UA BUILDINGS                             
 CO-CHAIR BUNDE announced that since many of the bills being heard             
 today were being heard for the first time, if it appears to be in             
 the best interest of the committee, the bills will be held until a            
 HESS Committee meeting on Tuesday, May 2, 1995.                               
 Number 1024                                                                   
 WENDY REDMAN, Vice President, Statewide University System,                    
 University of Alaska, said HB 281 and HB 282 are bills introduced             
 by the Governor to begin to try and deal with the University of               
 Alaska's deferred maintenance problem.  HESS Committee members are            
 well aware of the problem the university is facing in this area.              
 Deferred maintenance is a problem that faces the entire state of              
 Alaska.  However, the university just happens to be the "biggest              
 MS. REDMAN said about 50 percent of all state facilities are                  
 University of Alaska facilities.  Over 80 percent of all the state            
 facilities over 40 years old belong to the university.  The                   
 university is therefore a very large part of the state's problem.             
 The university currently has a backlog of deferred maintenance                
 close to $157 million.                                                        
 MS. REDMAN asked to clarify a misperception that somehow this                 
 deferred maintenance problem has been created through gross                   
 mismanagement on the part of the university.  Although there may              
 have been mismanagement at the university over the last few decades           
 in one area or another, this problem was clearly not created                  
 through taking money from maintenance and moving it to other                  
 Number 1100                                                                   
 MS. REDMAN stated that in 1986, the university had a 20 percent               
 reduction, a mid-year "recision" of 12 percent in August of that              
 year, and the university took $1 million from maintenance at the              
 Fairbanks campus to keep the semester going. That $1 million was              
 then replaced the next year.                                                  
 MS. REDMAN said since that time the Board of Regents have mandated            
 a program.  The university has about a $12 million in underfunding            
 for the operating maintenance budgets throughout the system.                  
 Because there has never been a formula created over the years, the            
 board mandated all of those funds be reallocated from existing                
 resources to bring the maintenance budgets back up over the next              
 three years.                                                                  
 MS. REDMAN said the university knows it cannot depend on new state            
 money to do that, it must be done internally.  The Board of Regents           
 is absolutely committed to getting the deferred maintenance backlog           
 fixed, and assuring the university will never get into that                   
 situation again.  If that means, which it does, that the university           
 is going to have to reallocate money by shrinking programs and                
 campuses, then that is what it will do.  That is what the                     
 university is doing over the course of the next three years to                
 bring the budgets back up to par.                                             
 Number 1174                                                                   
 MS. REDMAN stated the problem has been complicated for the                    
 legislature as well.  Ms. Redman said this is her 18th session of             
 working with the legislature.  She noted that it is "not much fun"            
 to appropriate money to buy paint and fix things.  It is much more            
 fun to build new buildings.  Even though the university has not               
 been building many new buildings over the last decade, it has been            
 almost impossible to get money to fix old buildings.                          
 MS. REDMAN continued that the Governor has come up with a plan to             
 begin addressing these problems.  The plan relies on the use of the           
 Alaska Housing Finance Corporation (AHFC).  HB 281 appropriates $30           
 million to deal with the student housing deferred maintenance.  The           
 university has approximately $30 million worth of problems in                 
 university housing at the present time.  It is within the purview             
 of the AHFC to deal with the housing issue, and HB 281 would                  
 authorize the issuance of bonds to begin the repair and                       
 rehabilitation of those facilities.                                           
 MS. REDMAN noted that everyone would prefer cash.  However, it does           
 not appear that cash is available this year or in the future.  This           
 bill therefore provides the university with an option that is                 
 probably the best one at this point to solve the problem.                     
 Number 1247                                                                   
 MS. REDMAN said the second bill, HB 282, goes together with HB 281.           
 HB 282 has a delayed effective date because Governor Knowles is               
 still trying to figure out how to get cash in the future.  HB 282             
 says that if neither the Governor nor the legislature can come up             
 with at least $20 million for the university for next year, the               
 university would then authorize the AHFC, with a delayed effective            
 date, to again let $45 million worth of deferred maintenance bonds            
 with an effective date of July 1, 1996.                                       
 MS. REDMAN said the Governor feels that would give him time.  He is           
 planning to work during the interim with a group of people to try             
 and figure out a long-term plan for the deferred maintenance with             
 a cash approach.  That is always the university's first priority.             
 In case that does not happen, the university needs to have a plan             
 so it can begin laying out a bid plan to get these projects under             
 way.  The university is facing some crucial health and safety                 
 issues at this point.                                                         
 MS. REDMAN warned that soon, some buildings will have to be closed            
 down, particularly on the Fairbanks campus.  That is the oldest               
 campus.  However, the Anchorage campus also has a total of $35                
 million worth of deferred maintenance accrued on that campus alone.           
 As HESS Committee members know from their own homes, when a problem           
 is not taken care of, it accelerates very quickly.  Therefore,                
 within a couple of years, the newer Anchorage campus will be in as            
 bad shape as the Fairbanks campus.                                            
 MS. REDMAN concluded by saying that it is essential that these                
 problems be addressed.  These bills are the best way to approach              
 those problems at this point in time, and the university asked the            
 support of the HESS Committee members.                                        
 Number 1340                                                                   
 CO-CHAIR BUNDE stipulated that although there may not have been               
 gross mismanagement at the university, there may have been                    
 REPRESENTATIVE NORMAN ROKEBERG took exception, he felt that the               
 mismanagement was gross mismanagement.  He asked to summarize the             
 two bills.  He understood that HB 281 is a request for $30 million            
 and the authority to use the AHFC for maintenance of existing                 
 residential housing.  He asked if this has anything to do with the            
 new housing for Anchorage, Ketchikan and Juneau campuses as                   
 provided for in HB 309 and HCR 18; he also asked how much money the           
 university asked for in that legislation.                                     
 MS. REDMAN answered that Representative Rokeberg was correct, the             
 two are separate issues.  HB 309 and HCR 18 would provide the                 
 university with about $30 million for new housing.                            
 REPRESENTATIVE ROKEBERG asked if that $30 million was also from               
 AHFC, and Ms. Redman answered "yes."                                          
 Number 1444                                                                   
 REPRESENTATIVE ROKEBERG noted that HB 281 asks for $30 million, and           
 HB 282 asks for $45 million.   Therefore, Ms. Redman was asking for           
 $75 million.  Representative Rokeberg realized there was a                    
 "tripwire" in HB 282, which made it contingent upon whether the               
 Governor could come up with $20 million.  He asked if the                     
 university knew what the money would be spent on.                             
 MS. REDMAN said the university has a detailed list of deferred                
 maintenance needs.  The "tripwire" is that if next year the                   
 Governor comes up with $20 million in cash, HB 282 would not go               
 into effect.  The bill has a delayed effective date of one year               
 from the coming July.                                                         
 REPRESENTATIVE ROKEBERG asked for testimony from the AHFC. He asked           
 about the budget for the university over the last ten years, such             
 as in 1986, the year of the real estate and oil crash in Alaska.              
 He also asked what percentage of the university budget has been               
 allocated to repair and conduct operational maintenance.  He                  
 specified he was referring to the maintenance portion of the                  
 physical plant.                                                               
 MS. REDMAN said she did not have that information handy, although             
 she could get that information for Representative Rokeberg and                
 would do so presently.  She said it is based on a formula approach,           
 which is a nationally recognized formula for what is done for                 
 Number 1476                                                                   
 REPRESENTATIVE ROKEBERG asked if the university has been spending             
 according to that formula over the last ten years.                            
 MS. REDMAN answered that the university has not been spending that            
 amount over the last decade.  The university is bringing its budget           
 up to that level.  The general fund of the university for the                 
 current year, 1996, is exactly the same as it was in 1986.                    
 REPRESENTATIVE ROKEBERG asked if the problem with spending money on           
 maintenance is that the legislature has not given the university              
 enough money.                                                                 
 MS. REDMAN answered that was part of the problem.  The university             
 certainly could have made choices during the last decade as                   
 enrollment has gone up about 35 percent.  The university could have           
 made choices to not serve students, but that choice was not made.             
 That perhaps is where the "mismanagement" of funds that Co-Chair              
 Bunde spoke of occurred.  The university has been trying to respond           
 to enormous growth and need with a budget that has not kept up with           
 that need.                                                                    
 Number 1525                                                                   
 REPRESENTATIVE ROKEBERG felt it was unfortunate that the university           
 built new structures while not looking after the existing physical            
 plant as well as it could have.  Representative Rokeberg understood           
 that there were needs for new buildings.  But it is unfortunate               
 because state buildings other than those of the university have not           
 been properly maintained.  That is a serious situation.                       
 Number 1557                                                                   
 REPRESENTATIVE ROBINSON asked if it was not also true that many new           
 facilities have been built to bring the university into compliance            
 so other federal dollars could be gained.                                     
 MS. REDMAN said in fact, the university has only built two new                
 facilities in the recent past.  Fairbanks has a new natural                   
 sciences facility, which is the first new facility on that campus             
 in 20 years.  The Anchorage campus has a new business building,               
 built about four years ago, which is their first new building in              
 about 12 years.  The university has not been building new                     
 buildings.  Ms. Redman noted that the library on the Juneau campus            
 was the last facility built.                                                  
 CO-CHAIR BUNDE said the buildings have received blame for being               
 where all the money went, however, money has been spent on programs           
 on which reasonable people can disagree as to whether the money was           
 well spent.                                                                   
 Number 1603                                                                   
 REPRESENTATIVE GARY DAVIS assumed the university has a list of what           
 needs to be done first, second, etc.                                          
 MS. REDMAN said the university has a detailed list on file with the           
 Office of Management and Budget.  Ms. Redman offered to provide it            
 to HESS Committee members.                                                    
 CO-CHAIR TOOHEY agreed that the university has probably taken in              
 more students than it has room for.  She asked if the university              
 was going to begin levelling off enrollment and accept the fact               
 that it can no longer keep expanding enrollment.  She asked if the            
 university was ever going to catch up to its enrollment.                      
 MS. REDMAN said that the university has hit that point,                       
 particularly in Anchorage.  The Anchorage campus has simply topped            
 out, and it topped out in the fall semester of 1994.  Without                 
 additional operating funds for faculty, the university simply                 
 cannot take anymore students.  Four hundred classes close out at              
 the Anchorage campus each semester within the first day of                    
 registration.  The university is overbooked.                                  
 MS. REDMAN said that is a sad situation to be in, and the                     
 university must tell Alaskan residents, "Sorry, there just is no              
 room for you."                                                                
 Number 1669                                                                   
 CO-CHAIR TOOHEY did not feel that was a sad situation.  Every                 
 university has a capacity, and the university has been ignoring               
 that capacity.  The buildings are going to crumble and the                    
 university is going to close.  Then the university will be spread             
 out with little campuses here and there.  The university must cut             
 back, and begin looking at using grade schools and facilities that            
 are already built.                                                            
 MS. REDMAN said the Anchorage campus uses every available classroom           
 in the city of Anchorage.  Every night, except Friday night, the              
 university is using over 150 classrooms in schools.  The university           
 uses many classrooms.  All of the community colleges use community            
 CO-CHAIR BUNDE said the one step that has not been made is weekend            
 classes.  There are some weekend classes, but not many.  A choice             
 has to be made between no classes and weekend classes.                        
 MS. REDMAN said Co-Chair Bunde will be pleased to hear that the               
 Anchorage campus is now moving to a Monday-Wednesday-Friday                   
 sequence.  Chancellor Gorsuch is also investigating the Tuesday-              
 Thursday-Saturday model.  For some programs, that will work.                  
 However, some students just simply do not show up.                            
 MS. REDMAN also noted that the Anchorage campus is the only one               
 that has not scheduled Friday classes.                                        
 Number 1772                                                                   
 BILL HOWE, Deputy Commissioner, Treasury Division, Department of              
 Revenue, noted that HB 281 references a plan to be worked out by              
 the commissioner of revenue and the AHFC for an orderly transfer of           
 excess capital at the AHFC to the general fund.  This morning, the            
 AHFC board met and adopted the plan that Mr. Howe distributed to              
 HESS Committee members.                                                       
 MR. HOWE discussed the plan in an attempt to tie it to HB 281.  He            
 said page 2, lines 9 through 13 of HB 281 references the transfer             
 agreement, which is now before the HESS Committee members.  The               
 agreement is supported by a financial schedule, in which Mr. Howe             
 highlighted some key numbers that will put his remarks in context.            
 The number he highlighted in the upper left-hand column shows that            
 at the end of the 1995 fiscal year (FY 95), AHFC will have about              
 $615 million in unrestricted cash on its books.                               
 MR. HOWE said the Governor's plan that has been adopted by the AHFC           
 board is to transfer $270 million over the next five fiscal years             
 to the general fund.  Beginning in FY 96, $70 million will be                 
 transferred, with $50 million being transferred in each of the                
 following four years.  In addition to that, the AHFC will maintain            
 its capital projects and grants at the $50 million level through              
 this whole period of time.                                                    
 MR. HOWE added that of course, the capital budget is submitted to             
 the legislature for review.  There is no assumption that all $50              
 million will be granted.  There may be some play between the                  
 unfunded in the capital grant line and what would be transferred to           
 the general fund.                                                             
 MR. HOWE explained that HB 281 says that the AHFC has $1 million a            
 year available for spending.  The recommendation from the AHFC                
 board which the HESS Committee members were just given states that            
 after this year, $50 million of that will be transferred every year           
 to the general fund.  The balance will be used to fund housing-               
 related capital projects such as new public housing.                          
 MR. HOWE said those capital projects will be submitted to the                 
 legislature for review.  Most importantly, this schedule was                  
 reviewed by the bond rating agencies in New York.  Those agencies             
 have issued a press release saying if this bill and this program is           
 adopted, even though it means taking (in one form or another) $100            
 million out of AHFC every year, the credit rating agencies will               
 take the AHFC off its current credit watch status and will re-                
 establish it with an "A plus" bond rating.                                    
 MR. HOWE mentioned that because there are competing proposals.                
 Some are from the university and some are from other places on how            
 to use the AHFC cash.  When SB 40 was introduced, it called for a             
 withdrawal of $350 million in cash over the next two years, and no            
 commitments whatsoever as to how much would be taken out in future            
 years.  The immediate result of that was the bond rating agencies             
 put the AHFC on the credit watch list with a negative rating.                 
 MR. HOWE said if the legislature continues with proposals like SB             
 40, the AHFC bonds will be junk bonds.  They will not be worth the            
 rating.  This is why it is so significant that the current plan was           
 approved by the rating agencies.                                              
 Number 1993                                                                   
 MR. HOWE was asked while giving testimony previously if this $100             
 million a year is some kind of magic number.  He was also asked if            
 more could be retrieved from the AHFC and still maintain the                  
 current rating.  In the judgement of Mr. Howe, the reason the                 
 rating agencies agree to HB 281 is because it is equivalent to what           
 the AHFC earns each year.  Therefore, as long as the AHFC basically           
 does not cut into the capital base that essentially secured the               
 outstanding bonds, the credit agencies will go along with this                
 Number 2030                                                                   
 MR. HOWE said part B of the bill is about issuing the $30 million             
 in bonds and basically giving that money to the university to                 
 rehabilitate the student housing primarily at the Fairbanks campus,           
 where most of the residential housing is.  The AHFC will issue and            
 service the bonds, and will basically be part of the university's             
 capital budget.  The AHFC will be subsidizing the university in               
 that regard.                                                                  
 MR. HOWE said when HB 309, which had to do with new student                   
 housing, was discussed in the HESS Committee, the amount asked for            
 was $36.5 million.  The AHFC would issue $36.5 million of new bonds           
 and subsidize the interest rate.  That would be in addition to the            
 amount of money asked for in HB 281.  Mr. Howe reiterated that all            
 bills dealing with the AHFC in some manner must be looked at                  
 together and within the context of the overall program.                       
 MR. HOWE said HB 281 is the Governor's and the Commissioner of                
 Revenue's overall program for the AHFC for an orderly transfer of             
 assets that will maintain itself as a business entity.                        
 Number 2089                                                                   
 CO-CHAIR TOOHEY asked if she could summarize what Mr. Howe just               
 said for the information of the committee.  The $270 million is to            
 do deferred maintenance, etc., in Fairbanks, and again Anchorage is           
 being thrown to the wolves.                                                   
 MR. HOWE disagreed.  He said the $270 million goes to the general             
 fund, and is appropriated as the legislature sees fit.  Part B of             
 the bill says that the AHFC will issue $30 million in bonds.  If              
 this program is approved, the AHFC will still have a bond rating,             
 and will again be able to issue A plus bonds at attractive rates,             
 raise the $30 million, and have that $30 million to use in the                
 Governor's highest priority program.  That is to rehabilitate                 
 existing buildings that are not usable.                                       
 MR. HOWE said that is the Governor's program as encompassed in HB             
 281.  The Anchorage housing program is a separate issue.  HB 309              
 stated that the AHFC would raise $36.5 million of additional bonds.           
 The bond proceeds would be utilized by the university to build new            
 student housing, as opposed to rehabilitating old housing, in                 
 Anchorage, Juneau and Ketchikan.  The only further involvement that           
 AHFC would have, in addition to raising the bonds, would be to                
 subsidize the interest rate by a factor of about 3 percent a year.            
 Three percent a year on $36 million in bonds is approximately a               
 million a year.  That would be a continuing subsidy on the part of            
 the AHFC.                                                                     
 Number 2177                                                                   
 REPRESENTATIVE ROKEBERG asked if the Governor has another bill                
 before the body to implement the transfer agreement as found in               
 Section 2 of HB 281.                                                          
 MR. HOWE answered that HB 281 is the only bill that the Governor              
 has introduced in this area.                                                  
 REPRESENTATIVE ROKEBERG asked if Mr. Howe knew why the Governor               
 chose to tie the bond authorization with the transfer act.                    
 CO-CHAIR BUNDE noted that companion bills have been introduced into           
 the Senate.  Senate bills 143 and 144 are the same as Hbs 281 and             
 282.  Those bills are currently in Senate Finance.                            
 REPRESENTATIVE ROKEBERG concluded that there is not another bill              
 that accomplishes the Alaska Housing transfer of the $270 million             
 to the general fund.  HB 281 is the only bill.                                
 CO-CHAIR BUNDE corrected him by saying that SB 143 is a companion             
 bill, similar to HB 281.                                                      
 REPRESENTATIVE ROKEBERG said the reason he asked is because there             
 are two different things going on in HB 281.  Money is transferred            
 from the equity of the AHFC to the state general fund; and there is           
 also authorization for the AHFC to pay for and service a debt of an           
 additional new bond issue.  Those two elements are not even                   
 CO-CHAIR BUNDE suggested that the elements are related because they           
 both aim to take money from the AHFC.                                         
 REPRESENTATIVE ROKEBERG agreed.  He said it is clear in HB 281 that           
 the entire debt service of both the principal and interest of the             
 $30 million is going to be paid for by the AHFC.  Mr. Howe also               
 mentioned that, regarding the $270 million transfer, that the bond            
 rating would not be severely impacted because this was the                    
 perceived net profits throw-off of the AHFC on an annual basis.               
 But there is another situation in which the annual debt service is            
 about $1.8 million on this particular bond issue.  This  will be an           
 additional drain on the equity and the balance sheet of the AHFC.             
 That is in addition to anything else that may come around.                    
 MR. HOWE responded that the additional debt service, both principal           
 and interest over a 20-year period of time, related to the $30                
 million worth of bonds for rehab housing is included in the capital           
 expenditure line on the schedule passed out to HESS Committee                 
 members.  The additional debt service is part of the $50 million.             
 In fact, that is the reason the AHFC moved from $50 million a                 
 period to $53,974,000.  The $3,974,000 represents the debt service            
 on the bonds that HESS Committee members are discussing.                      
 MR. HOWE noted that he was referring to the handout and had                   
 highlighted the numbers under the Family Housing Programs.  That              
 would be considered as student housing within the concept.  To the            
 degree that all these other bills that come before the HESS                   
 Committee utilize AHFC's cash assets or debt service ability, the             
 $53 million is being counted against.                                         
 REPRESENTATIVE ROKEBERG asked to clarify.  He used FY 97 as an                
 example.  Under the Family Housing Program line item, as seen in              
 the handout, the amount is $53,974,000.  He asked if that amount              
 was in addition to the $50 million, or if that was the totality of            
 all the housing programs and debt service.                                    
 Number 2344                                                                   
 MR. HOWE said that was the totality of the grants.                            
 TAPE 95-43, SIDE B                                                            
 Number 000                                                                    
 MR. HOWE continued that for the 1996 capital budget, the capital              
 request is approximately $50 million, of which $20 million is used            
 for federal matching.  Whether or not the legislature fully                   
 appropriates or allows the AHFC to use corporate receipts for that            
 purpose is problematic at this point.  Therefore, to answer                   
 Representative Rokeberg's question about where does the university            
 housing funding come from, that is part of the $53 million on the             
 handout schedule.                                                             
 MR. HOWE continued that to the degree that these amounts are                  
 appropriated by the legislature means that there is less money for            
 other programs.                                                               
 REPRESENTATIVE ROKEBERG said therefore, the $50 million, using FY             
 97 as an example, goes into the general fund unencumbered.  Then              
 $53 million is for other programs.  He asked if the programs were             
 new programs brought forward by the Governor.   He asked what makes           
 up the $53 million.                                                           
 Number 094                                                                    
 MR. HOWE answered that approximately $20 million of the $50 million           
 are state matching funds for federal loans such as Housing and                
 Urban Development (HUD) programs through regional housing                     
 authorities.  There is another $20 million related to the old                 
 Alaska State Housing Authority (ASHA) activities that the AHFC two            
 years ago was asked to absorb.  There are a number of projects in             
 that area that need to be totally renovated.                                  
 MR. HOWE said old age housing is also an element, taking another              
 $20 million.  The balance is comprised of various programs that are           
 heavily supported by the Alaska Builders' Association.  There are             
 credits applied for weatherization that assist people in both urban           
 and rural areas to improve heat efficiencies in that program.                 
 MR. HOWE said that each of those programs each year is reviewed by            
 the legislature and either adopted or not.                                    
 Number 207                                                                    
 REPRESENTATIVE ROKEBERG said he was not trying to hold up the                 
 discussion, he was just trying to clarify exactly what the bill was           
 going to do.  The various programs just described by Mr. Howe,                
 along with any new legislation that may be adopted is covered under           
 this line item, which is a cost on an annualized basis to the AHFC.           
 Therefore, it has an impact on the AHFC balance sheet and                     
 REPRESENTATIVE ROKEBERG referred again to the example of FY 97.  He           
 asked if the cash flow requirement for the one $30 million bond               
 issue, which is approximately $1.8 million, is in the line item.              
 MR. HOWE answered yes.                                                        
 REPRESENTATIVE ROKEBERG asked if Mr. Howe was aware of any other              
 requests of the AHFC this year of which perhaps the HESS Committee            
 members are not aware.                                                        
 Number 240                                                                    
 MR. HOWE said his understanding of the current state of the capital           
 budget of the AHFC as submitted totals approximately $53 million.             
 It is highly problematic whether or not the legislature will fund             
 all of that.  He would expect that the legislature would fund                 
 something less than that.                                                     
 REPRESENTATIVE ROKEBERG said most of the funding is already                   
 committed money, it is already annualized.                                    
 MR. HOWE said that was not correct.  Other than the type of program           
 that would be adopted in the bill, where a specific bond issue was            
 authorized and the AHFC was directed to service that issue over a             
 period of time, that would be a "carry-forward commitment."  But              
 the other elements in that $53 million number are subject to annual           
 Number 300                                                                    
 CO-CHAIR BUNDE asked if Representative Rokeberg could perhaps                 
 explore the AHFC further at another time.  He brought up another              
 issue that may necessitate the holding of the bills until the next            
 week.  Co-Chair Bunde said he was not trying to close the previous            
 conversation completely, he just wanted to bring up another point             
 to discuss.                                                                   
 REPRESENTATIVE ROBINSON interjected that unfortunately the House              
 State Affairs Committee was meeting presently to close out the rest           
 of the bills for the rest of the session.  She was needed for a               
 quorum in about two minutes, and they asked her to stay for about             
 15 minutes.                                                                   
 CO-CHAIR BUNDE asked her to wait until he presented an amendment,             
 and then HB 281 and HB 282 would be held until Tuesday, May 2.                
 Number 396                                                                    
 CO-CHAIR BUNDE proposed an amendment.  He called Section 3 of HB              
 281 a "blackmail clause."  It essentially says, if the provisions             
 of the bill are followed, the AHFC's financial assets are off the             
 table to any other legislative action.  Many times in the last few            
 days comments have been made that nothing this legislature does can           
 bind a future legislature.  HB 281, Section 3 is an attempt to bind           
 a future legislature.  Perhaps it is also making pledges and                  
 promises that future legislatures may not want to fulfill.  Should            
 oil prices crash, Co-Chair Bunde doubted that the state would want            
 to honor that pledge.                                                         
 CO-CHAIR BUNDE said perhaps the state will want to cash out the               
 AHFC in its entirety, and operate with that money instead of using            
 the constitutional budget reserve.                                            
 CO-CHAIR BUNDE said he would like HESS Committee members to peruse            
 the proposed amendment, and hold Hbs 281 and 282 until the                    
 following Tuesday.                                                            
 REPRESENTATIVE ROBINSON left the meeting at 3 p.m.                            

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