Legislature(2015 - 2016)SENATE FINANCE 532

03/23/2015 09:00 AM FINANCE

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as
Download Video part 1. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 30 Presentation: Overview FY17 Operating Budget TELECONFERENCED
Moved CSSB 30(FIN) Out of Committee
+ SB 64 SCHOOL BOND DEBT REIMBURSEMENT TELECONFERENCED
Moved CSSB 64(EDC) Out of Committee
+ SB 15 LIFE INSURANCE POLICY PREMIUM TAX TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
SENATE BILL NO. 64                                                                                                            
                                                                                                                                
     "An Act relating to school bond debt reimbursement;                                                                        
     and providing for an effective date."                                                                                      
                                                                                                                                
9:05:30 AM                                                                                                                    
                                                                                                                                
LAURA PIERRE,  STAFF, SENATOR  ANNA MACKINNON,  explained SB                                                                    
64. She  said that SB 64  would sunset the school  bond debt                                                                    
reimbursement program  for five years, and  would reduce the                                                                    
rates. Currently,  the reimbursement  rates were  70 percent                                                                    
for a  standard construction or  new build on a  school; and                                                                    
60 percent on non-standard expansion and construction.                                                                          
                                                                                                                                
Ms. Pierre discussed the Sectional Analysis (copy on file):                                                                     
                                                                                                                                
     Section  1: Amends  AS 14.11.014,  adds new  subsection                                                                    
     (d) Sunsets the bond  debt reimbursement provisions for                                                                    
     school  construction  and  major maintenance  for  five                                                                    
     years, January 1, 2015 - July 1, 2020.                                                                                     
                                                                                                                                
     Section  2:  Amends AS  14.11.100(a)  Page  6, line  21                                                                    
     restricts  reimbursement  of   bonds  authorized  after                                                                    
     January  1,  2015.  Page  7,  lines  1  -  11,  deletes                                                                    
    language relating to bonds authorized after May 1,                                                                          
     2015.                                                                                                                      
                                                                                                                                
     Section 3:  Amends AS 14.11.100(a)  Page 12, line  17 -                                                                    
     Page  13, line  2  inserts language  relating to  bonds                                                                    
     authorized on or after July  1, 2020. (18) For projects                                                                    
     approved under AS 14.11.100 (h),  (i), and (j)(2) - (5)                                                                    
     the reimbursement would be 50 percent.                                                                                     
                                                                                                                                
          (19) For projects approved under AS 14.11.100                                                                         
          (h), (i), and (j)(2), (3), and                                                                                        
          (5) the reimbursement would be 40 percent.                                                                            
                                                                                                                                
     Section 4: Amends AS 14.11.100, adds a new section (s)                                                                     
     Restricts   the   Commissioner    from   approving   an                                                                    
     application   for  bond   debt  reimbursement   between                                                                    
     January 1, 2015 - July 1, 2020                                                                                             
                                                                                                                                
     Section  5:  Amends  AS  14.11.102,  adds  new  section                                                                    
     (c)Restricts   the  Commissioner   from  approving   an                                                                    
     application   for  bond   debt  reimbursement   between                                                                    
     January 1, 2015 - July 1, 2020                                                                                             
                                                                                                                                
     Section 6: Repeals sections 1, 4,  and 5 of this act on                                                                    
     July 1, 2020                                                                                                               
                                                                                                                                
     Section 7: Retroactivity clause                                                                                            
                                                                                                                                
          Sections 1, 2, 4, and 5 of this act are                                                                               
          retroactive to January 1, 2015                                                                                        
                                                                                                                                
     Section 8: Section  3 of this act takes  effect July 1,                                                                    
     2020                                                                                                                       
                                                                                                                                
     Section 9: Sections 1, 2, 4,  5, and 7 of this act take                                                                    
     effect immediately                                                                                                         
                                                                                                                                
9:08:49 AM                                                                                                                    
                                                                                                                                
Senator Olson  remarked that  the bill  was a  positive move                                                                    
toward addressing the shortfall  in revenue. He wondered how                                                                    
the bill  affected the construction  of the  Kivalina School                                                                    
as related  to the Kasayulie  Case. Ms. Pierre  replied that                                                                    
the only school with projects  on a potential ballot was the                                                                    
Anchorage  School  District,  and their  election  would  be                                                                    
April  7,  2015. The  Anchorage  School  District would  not                                                                    
receive  reimbursement  for  the  bonds, if  the  bill  were                                                                    
signed and  passed into law  prior to the election.  She did                                                                    
not know how the other  school districts' bond packages were                                                                    
structured.                                                                                                                     
                                                                                                                                
Senator  Olson wondered  if the  bill affected  the Kivalina                                                                    
School   construction.   Ms.   Pierre   replied   that   the                                                                    
legislation   did    not   affect   the    Kivalina   School                                                                    
construction.                                                                                                                   
                                                                                                                                
Senator Bishop  wondered if  there would  be any  new budget                                                                    
requests for new projects.                                                                                                      
                                                                                                                                
ELIZABETH   NUDELMAN,   DIRECTOR,    SCHOOL   FINANCES   AND                                                                    
FACILITIES, DEPARTMENT  OF EDUCATION AND  EARLY DEVELOPMENT,                                                                    
explained  that  the  timeline  eligibility  throughout  the                                                                    
legislation  was voter  authorization.  Some  of the  voter-                                                                    
authorized  bonds were  not yet  applied to  the department,                                                                    
and some had not yet sold  all of the bonds. The legislation                                                                    
stated   that  the   commissioner   may   not  approve   and                                                                    
application  for indebtedness  authorized  by the  qualified                                                                    
voters of the municipality.                                                                                                     
                                                                                                                                
DAVID NEES, SELF,  ANCHORAGE (via teleconference), testified                                                                    
in support of the legislation.                                                                                                  
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
9:16:58 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:18:36 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:18:48 AM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon  discussed   the  retroactive  effective                                                                    
date. She  remarked that there  was some concerns  about the                                                                    
legality of  the retroactive  date of  January 1,  2015, and                                                                    
how it affected language consistent with statute.                                                                               
                                                                                                                                
Ms. Pierre explained that she  had some discussion regarding                                                                    
the  retroactive  effective   date.  The  legislative  legal                                                                    
department  suggested and  effective  date of  May 1,  2015,                                                                    
which reflected  current state  statute. The  statute stated                                                                    
that  districts  could issue  bond  debt  from October  2006                                                                    
through May  1, 2015.  She announced that  legislative legal                                                                    
did not  express concern regarding the  retroactive date, so                                                                    
long  as  the legislation  were  signed  and passed  by  the                                                                    
Anchorage election on April 7, 2015.                                                                                            
                                                                                                                                
Senator Olson  asked if the  administration was in  favor of                                                                    
the  legislation.  Ms. Pierre  responded  that  there was  a                                                                    
scheduled meeting with the governor to discuss the bill.                                                                        
                                                                                                                                
Co-Chair   MacKinnon   announced  that   local   communities                                                                    
currently had the  ability to indebt the state  to an amount                                                                    
that the  community determines, rather  than what  the state                                                                    
determines.                                                                                                                     
                                                                                                                                
Senator   Dunleavy  felt   that   SB   64  was   responsible                                                                    
legislation. He believed that  the legislature often invited                                                                    
lawsuits, but he  felt the fear of litigation  should not be                                                                    
a driving force behind supporting a bill.                                                                                       
                                                                                                                                
9:23:30 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:23:59 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
9:24:06 AM                                                                                                                    
                                                                                                                                
Senator Olson agreed  with the focus of  the legislation. He                                                                    
remarked that  school construction  was important,  but also                                                                    
very expensive. He felt that the legislation was prudent.                                                                       
                                                                                                                                
Senator Dunleavy  stressed that there was  no guarantee that                                                                    
the  state  would provide  funding,  because  it was  always                                                                    
subject  to appropriation.  Co-Chair  MacKinnon agreed  with                                                                    
that assertion.                                                                                                                 
                                                                                                                                
Vice-Chair Micciche  stated that the fiscal  note related to                                                                    
debt service.                                                                                                                   
                                                                                                                                
9:25:51 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:26:52 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair Micciche  expected the  bill to have  zero fiscal                                                                    
impact on the state.                                                                                                            
                                                                                                                                
Vice-Chair Micciche MOVED  to REPORT SB 64  out of committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
SB  64  was REPORTED  out  of  committee  with a  "do  pass"                                                                    
recommendation and  with one  new indeterminate  fiscal note                                                                    
from the Department of Education and Early Development.                                                                         
                                                                                                                                
9:28:03 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:33:09 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                

Document Name Date/Time Subjects
SB 64 - Explanation of Changes.pdf SFIN 3/23/2015 9:00:00 AM
SB 64
SB 64 - Sectional Analysis.pdf SFIN 3/23/2015 9:00:00 AM
SB 64
SB 64 - Sponsor Statement.pdf SFIN 3/23/2015 9:00:00 AM
SB 64
SB 64 EDC- Sectional Analysis.pdf SFIN 3/23/2015 9:00:00 AM
SB 64
SB 15 Sponsor Substitute Letter of Support.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 15 Sponsor Substitute Original Statute.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 15 Sponsor Substitute Research Alaska Life Insurance Facts.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 15 Sponsor Substitute Research Copy of Life Premium Taxes.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 15 Sponsor Substitute Research Life Insurance Industry.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 15 Sponsor Substitute Research on AK Life Insurance Companies.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 15 Sponsor Substitute Research on Revenue.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 15 Sponsor Substitute Research South Dakota Law.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 15 Sponsor Substitute Sectional Analysis.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 15 Sponsor Substitute Sponsor Statement.pdf SFIN 3/23/2015 9:00:00 AM
SB 15
SB 30 Public Testimony - Opposition to version X - Hale.pdf SFIN 3/23/2015 9:00:00 AM
SB 30
SB 30 work draft Version V.pdf SFIN 3/23/2015 9:00:00 AM
SB 30
SB 30 Version V Amendment 1.pdf SFIN 3/23/2015 9:00:00 AM
SB 30