1998-01-26                     House Journal                      Page 2136
HB 352                                                                        
HOUSE BILL NO. 352 by the House Rules Committee by request of                 
the Governor, entitled:                                                        
                                                                               
"An Act relating to the state's participation in the financing of             
construction and major maintenance of public school facilities;                
giving notice of and approving the entry into, and the issuance of             
certificates of participation in, lease-financing agreements for               
public school facilities; and providing an effective date."                    
                                                                               
was read the first time and referred to the State Affairs, Health,             
Education & Social Services and Finance Committees.                            
                                                                               
The following fiscal notes apply:                                              
                                                                               
Fiscal note, Dept. of Revenue, 1/26/98                                         
Indeterminate fiscal note, Dept. of Education, 1/26/98                         
Zero fiscal note, Dept. of Administration, 1/26/98                             
                                                                               
The Governor's transmittal letter dated January 23, 1998, appears              
below:                                                                         
                                                                               
"Dear Speaker Phillips:                                                        
                                                                               
Part of my Quality Schools Initiative is the provision of adequate, safe       
and well-maintained schools in which our children can learn.                   
Unfortunately, with declining general fund capital budgets, the backlog        
of needed school construction and major maintenance projects across            
our state has continued to grow.  Today I am introducing legislation           
that provides a plan and a funding mechanism for addressing the entire         
current statewide prioritized list of $744 million of capital projects         
over the next 10 years.                                                        

1998-01-26                     House Journal                      Page 2137
HB 352                                                                       
The Public School Facilities Financing Program authorizes the issuance         
of certificates of participation, a specialized type of revenue bond           
which has recently been issued by the state at very favorable interest         
rates.  These bonds will be repaid by revenues from cigarette taxes            
deposited into the designated School Fund.  In this way, up to $100            
million can be leveraged annually over the next six years.  After that,        
general funds will be utilized that are currently budgeted for the local       
school debt reimbursement program as local school bonds are retired.           
                                                                               
                                                                               
The program will balance the needs of rural and urban school districts,        
with an emphasis in the early years on critical major maintenance              
projects.  Annual funding is designed to meet critical projects quickly        
yet maintain a level that maximizes the use of in-state workers and            
companies.  This program will provide a predictable source of funds            
and certainty in project scheduling for local districts.                       
                                                                               
                                                                               
As in the current grant program, a local matching share would be               
required from 35% to 2% of total project costs depending on the tax            
base of the district.  However, unlike the current school debt                 
reimbursement program, school districts would be required only to              
come up with their match share and would not have to bond for the              
entire project amount.                                                         
                                                                               
                                                                               
Education is a top priority for most Alaskans and this Administration.         
To address the many challenges facing our schools and to advance               
quality in the education of our children, I have introduced legislation        
that 1) mandates standards, comprehensive testing, and remedial                
actions for deficient schools; 2) provides more resources for our              
strapped schools; 3) revises our foundation formula to more efficiently        
and equitably distribute state funds; and 4) provides adequate space           
and safety for students.  I urge your prompt and favorable action.             
                                                                               
                                                                               
							Sincerely,                                                              
							/s/                                                                     
							Tony Knowles                                                            
							Governor"