Legislature(1997 - 1998)
04/24/1997 08:41 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 11 SCHOOL DEBT REIMBURSEMENT
BRETT HUBER testified regarding the changes
incorporated in the work draft CS, version F. Also
testifying were MICHAEL MORGAN and MIKE FORD. SENATOR
PHILLIPS MOVED Amendment #4. SENATOR ADAMS objected.
SENATOR PHILLIPS withdrew his motion and MOVED to adopt
the work draft CS. SENATOR DONLEY objected for the
purpose of discussion, then withdrew his objection.
Without further objection, CSSB 11(FIN) was ADOPTED.
SENATOR PHILLIPS MOVED Amendment #4. Without
objection, Amendment #4 was ADOPTED. SENATOR DONLEY
MOVED Amendment #5. COCHAIR SHARP objected, then
withdrew his objection. SENATOR PHILLIPS objected.
Amendment #5 FAILED by a 2 to 4 vote. SENATOR ADAMS
MOVED Amendment #6. SENATOR PHILLIPS objected.
Amendment #6 FAILED by a 2 to 4 vote. Amendment #3 was
not offered. CSSB 11(FIN) was HELD for further
consideration.
SENATE BILL NO. 11
"An Act relating to state aid for school construction debt;
and providing for an effective date."
BRETT HUBER, Legislative Staff to Senator Halford, addressed
the committee. He called attention to a CS work draft,
version F, that was before the committee and noted it
incorporated two previously adopted amendments. He
discussed the amendments and pointed out an error in the CS
draft wording on page 4, line 8. The word "payments" should
be "projects." He brought up the retroactive clause in
Section 6.
SENATOR ADAMS inquired what the Anchorage school debt was on
a yearly basis. MR. HUBER responded that the Anchorage bond
issues went forward without Department of Education
approval, but he thought the department may have an estimate
of the amount.
COCHAIR SHARP invited the bill drafter, Mike Ford, and
Department of Education representative, Mike Morgan, to the
committee table.
SENATOR ADAMS had questions about the Anchorage and Mat-Su
bond issues and the retroactivity clause that were addressed
by MR. HUBER. MICHAEL MORGAN, Manager, Facilities Section,
Department of Education (DOE), responded to SENATOR ADAMS'
questions also.
SFC-97, # 127 Side 1 (500)
COCHAIR SHARP inquired if the retroactive clause in
subsection (8) (page 4) opened a window for additional 70/30
funding. MICHAEL FORD, Attorney, Legislative Legal and
Research Services, indicated that the issuance of bonds
would have to have the DOE commissioner's approval by July 1
and be issued between July 1, 1995 and July 1, 1997. It was
determined that it would be unlikely that a bond package
could be put together, voted on, and approved by DOE before
July 1, but it could open the door for Anchorage.
End SFC-97 # 127, Side 1 (590)
Begin SFC-97 # 127, Side 2 (000)
SENATOR ADAMS inquired what the retroactive clause would
cost the state. Mr. Huber responded that DOE had begun the
analysis, but was still waiting for information from
Anchorage. He estimated a potential impact would be $5.8
million for Anchorage and Mat-Su projects.
There was discussion about a fiscal note dated 3/24/97 for
$3.9 million which represented only Mat-Su reimbursement.
MIKE FORD addressed technical changes to the bill that would
make it consistent with other provisions, as referenced in
his memorandum dated 4/10/97.
SENATOR PHILLIPS MOVED the suggested changes as Amendment
motion, then MOVED to adopt the CS work draft, version F, as
CSSB 11(FIN). Without objection, it was ADOPTED.
SENATOR PHILLIPS MOVED Amendment # 4. SENATOR DONLEY
objected for the purpose of discussion, then withdrew his
motion. Without further objection, Amendment #4 was
adopted.
SENATOR DONLEY MOVED Amendment #5, page 4, line 9, to delete
"before the sale or issuance of debt for the project".
COCHAIR SHARP objected, spoke to his objection, then
withdrew it. SENATOR PHILLIPS objected. There was
discussion about expanded eligibility of projects resulting
from the amendment.
A roll call vote was taken on the MOTION to adopt Amendment
IN FAVOR: Adams, Donley
OPPOSED: Parnell, Phillips, Sharp, Pearce
Amendment #5 FAILED by a 2 to 4 vote.
SENATOR ADAMS MOVED Amendment #6, page 4, lines 7-14, to
delete all material. SENATOR PHILLIPS objected.
A roll call vote was taken on the MOTION to adopt Amendment
IN FAVOR: Adams, Sharp
OPPOSED: Parnell, Phillips, Donley, Pearce
Amendment #6 FAILED by a 2 to 4 vote.
SENATOR PARNELL commented that the fiscal note was open-
ended in that there was no cap on the amount that could be
bonded for, so it was basically a blank check. He inquired
how much more could be expected above the $3.9 million. MR.
HUBER was unable to provide a number but spoke of the
sponsor's intent. Voters would scrutinize which projects
they would approve because they would be paying half the
bill. SENATOR PARNELL questioned how reimbursements would
fit in with the majority spending plan and if that had been
considered by the sponsor. MR. HUBER acknowledged that
there could be impact, but school construction would have to
come from some place. Currently, the only mechanism is
through capital appropriations at 100 percent project cost.
SENATOR ADAMS believed the fiscal note should reflect a
minimum of $5.8 million, noting that it could go up to
between $12-15 million in debt service. He agreed that it
would blow the five-year spending plan out of proportion,
but he supported it as a good cause.
COCHAIR SHARP commented that the bill represented a portion
of the majority's comprehensive education package, but
problems exist in doing it a piece at a time, particularly
with subsection (8). He was supportive of the 50/50 share
of the debt load. He requested a revised fiscal note that
reflected the total impact of additional debt service that
may be incurred due to bonds that have passed and may
qualify within the window provided under subsection (8).
Amendment #3 was not offered. SENATOR ADAMS commented that
the bill takes care of only one segment of the state, and
the whole state should be considered. He indicated he would
keep the amendment pending and try to find a solution to
take care of the "have nots."
COCHAIR SHARP requested a report of the last bond package
that passed showing whether Mat-Su got any of that money.
CSSB 11(FIN) was HELD for further consideration.
COCHAIR SHARP announced a ten minute recess at 10:00 A.M.
The meeting reconvened at 10:12 A. M.
End SFC-97, # 127, Side 2 (127)
Flip tape back to Side 1, (begins at 275)
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