Legislature(1993 - 1994)

03/29/1994 09:10 AM CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
 The Senate Community & Regional Affairs Committee was called to               
 order by Chairman Randy Phillips at 9:10 a.m.  He brought  SB 62              
 (PUBLIC SCHOOL FOUNDATION PROGRAM) before the committee as the only           
 order of business.                                                            
                                                                               
 Number 020                                                                    
                                                                               
 SENATOR LEMAN moved that CSSB 62(CRA) (version o dated 3/28/94) be            
 adopted.  SENATOR TAYLOR objected for the purpose of asking                   
 questions.                                                                    
                                                                               
 Number 045                                                                    
                                                                               
 SENATOR TAYLOR asked if an adjustment had been made in the Area               
 Cost Differential or the manner in which Area Cost Differential is            
 calculated within the formula.  DUANE GUILEY responded that the               
 committee substitute does not require any change to the current               
 Area Cost Differential.                                                       
                                                                               
 Number 070                                                                    
                                                                               
 SENATOR RANDY PHILLIPS asked Shirley Armstrong to outline the                 
 differences in the new committee substitute.                                  
                                                                               
 SHIRLEY ARMSTRONG, Committee Aide, Senate Community and Regional              
 Affairs Committee, outlined the following three changes contained             
 in CSSB 62(CRA):                                                              
                                                                               
  (1)  On page 2, line 2, it requires the Department of                        
 Education to define funding communities to include no less than 16            
 students in average daily membership.  That was changed from 25               
 students in the first committee substitute.                                   
                                                                               
  (2)  On page 3, the repealer on the holdharmless that repealed               
 the current law has been removed from the new committee substitute,           
 thus retaining the current holdharmless provision in statute.                 
                                                                               
  (3)  The effective date of the legislation was changed from                  
 July 1, 1993 to July 1, 1994.                                                 
                                                                               
 Number 097                                                                    
                                                                               
 DUANE GUILEY explained that current statute provides for a three-             
 year holdharmless that is phased in at a 75 percent, 50 percent and           
 25 percent and then zero supplement to a district.  By removing               
 Section 8 it reverts back to the existing statutory holdharmless.             
                                                                               
 Number 136                                                                    
                                                                               
 SENATOR TAYLOR removed his objection to adopting CSSB 62(CRA).                
 Hearing no further objection, the Chairman stated the motion                  
 carried.                                                                      
                                                                               
 Number 147                                                                    
                                                                               
 SENATOR TAYLOR offered and moved the following Amendment No. 1:               
                                                                               
 Page 1, line 5:  After "shall" delete"include at least" and insert            
                  "be"                                                         
                                                                               
 Page 1, line 6:  Delete "the lesser of"                                       
                                                                               
 Page 1, line 7:  Delete "[1]"                                                 
                                                                               
 Page 1, line 10:  Delete "; or" and insert a period (.)                       
                                                                               
 Page 1, lines 11 & 12:  Delete paragraph (2) in its entirety                  
                                                                               
 Senator Taylor explained that his amendment would remove the                  
 provision that provides a local community would only be required to           
 pay up to 4 mills or 50 percent, whichever is least.  Mr.Guiley               
 added that the proposed amendment would affect currently three                
 districts in the state:  North Slope, Valdez and Unalaska.  He                
 suggested leaving paragraph (2) in for purposes of accomplishing              
 the task and changing that number to 100 percent so that a district           
 would be required to submit 4 mills or 100 percent of basic need,             
 or consider some way of recapturing that extra contribution over              
 and above 100 percent of basic need for redistribution throughout             
 the state.                                                                    
                                                                               
 Number 215                                                                    
                                                                               
 SENATOR RANDY PHILLIPS called for a hand vote on Amendment No. 1.             
 Senator Taylor and Leman voted "Yea" and Senators Phillips voted              
 "Nay."  Senator Leman changed his vote to "Nay."  The Chairman                
 stated Amendment No. 1 failed.                                                
                                                                               
 Number 227                                                                    
                                                                               
 SENATOR TAYLOR offered and moved the following Amendment No. 2:               
                                                                               
 Reinsert Section 8 to read as follows:                                        
    "* Sec. 8.  AS 14.17.031(b) is repealed."                                  
                                                                               
 Amend the percentage in the holdharmless provision from 10 percent            
 to 5 five percent.                                                            
                                                                               
 DUANE GUILEY explained that Senator Taylor's amendment would                  
 require adding a new section to the committee substitute that would           
 adjust the existing statute, AS 14.17.031(b).  The existing statute           
 requires the holdharmless to be effective when there is a 10                  
 percent drop in K-12 units.  It is a phasing out of the loss over             
 a period of four years, thereby allowing an opportunity for a                 
 district to adjust their program down to their new student                    
 enrollment number or the new revenue number.                                  
                                                                               
 SENATOR TAYLOR added that this would take care of the problem of              
 the projected enrollment drop by the Sitka school district.  Also,            
 Sitka is the only district in the state that would impacted by the            
 change.                                                                       
                                                                               
 Number 265                                                                    
                                                                               
 SENATOR RANDY PHILLIPS called for a hand vote on Amendment No. 2.             
 Senators Taylor, Leman and Phillips voted "Yea."  The Chairman                
 stated Amendment No. 2 was adopted.                                           
                                                                               
 Number 275                                                                    
                                                                               
 SENATOR TAYLOR offered and moved the following Amendment No. 3:               
                                                                               
 Reinsert the Area Cost Differential language that was deleted from            
 the original bill (Section 3 of SB 62).                                       
                                                                               
 DUANE GUILEY explained that if the state were to undertake a study            
 similar to the McDowell study that was done in 1983, current                  
 estimates are that an update to that study could cost as much as $1           
 million if the same firm and same type of process is used.  The               
 1988 update cost the state approximately $250,000.  He said the               
 section in the original SB 62 provides an opportunity for the                 
 department to develop a new Alaska School Price Index for the                 
 purpose of replacing the current Area Cost Differential.  It would            
 be developed through regulation and it does not mandate another               
 study, so the opportunity would exist for the department to review            
 the 1988 McDowell update and simply suggest that it be adopted as             
 the new Alaska School Price Index.                                            
                                                                               
 SENATOR RANDY PHILLIPS voiced his concern that an update could cost           
 up to $1 million.  SENATOR TAYLOR responded that could happen only            
 if they opt to go out and are authorized by the Finance Committee             
 to undertake a new study.  The department can do it by regulation             
 internally.                                                                   
                                                                               
 Number 300                                                                    
                                                                               
 SHIRLEY ARMSTRONG pointed out that Section 1 of the original SB 62            
 should also be added back in as part of the amendment as the two              
 sections work together.                                                       
                                                                               
 SENATOR TAYLOR amended Amendment No. 3 to include Section 1 of the            
 original SB 62.  SENATOR RANDY PHILLIPS called for a hand vote on             
 Amendment No. 3.  Senators Leman, Taylor and Phillips voted "Yea."            
 The Chairman stated Amendment No. 3 was adopted.                              
                                                                               
 Number 337                                                                    
                                                                               
 SENATOR TAYLOR moved Senator Adams' Amendment No. 1:                          
                                                                               
 Delete existing Section 1 and replace with:                                   
                                                                               
    "*Section 1.  AS 14.17.025(b)(2) is amended to read: 24 {23}             
 percent of the district's basic need for the fiscal year under AS             
 14.17.021(b), as adjusted AS 14.17.225(b)."                                   
                                                                               
 MARLA BERG, staff to Senator Adams, explained that instead of                 
 changing the local contribution requirement it would change the               
 allowable local effort from 23 percent to 24 percent.  Senator                
 Adams believes that this would address a problem for some of the              
 school districts in the state without making drastic changes to the           
 existing formula.  DUANE GUILEY pointed out that the amendment                
 would increase local capacity throughout the state by approximately           
 $15 million over and above existing capacity.                                 
                                                                               
                                                                               
 Number 360                                                                    
                                                                               
 SENATOR TAYLOR stated he has consistently opposed an increase in              
 the cap until there is a rewrite of the formula because he believes           
 it is still inequitable, so he will continue to oppose an increase.           
                                                                               
 Number 398                                                                    
                                                                               
 SENATOR RANDY PHILLIPS called for a hand vote on the adoption of              
 Senator Adams' Amendment No. 1.  Senators Phillips, Leman and                 
 Taylor all voted "Nay."  The Chairman stated the amendment failed.            
                                                                               
 Number 402                                                                    
                                                                               
 SENATOR RANDY PHILLIPS brought the following Senator Adams'                   
 Amendment No. 2 before the committee:                                         
                                                                               
 Page 2, line 2:  Delete "16" and replace with "8"                             
                                                                               
 MARLA BERG explained that Senator Adams is recommending reducing              
 the number of the average daily membership of students from 16 to             
 8.  As drafted, the committee substitute would save approximately             
 $5 million, but would have a very negative impact on many school              
 districts.  The amendment would save the state $1.1 million and               
 would reduce the impacted school districts to seven.  SENATOR RANDY           
 PHILLIPS pointed out that the average daily membership was 25 and             
 was reduced down to 16 in the committee substitute.                           
                                                                               
 SENATOR RANDY PHILLIPS called for a hand vote on Senator Adams'               
 Amendment No. 2.  Senators Phillips, Leman and Taylor all voted               
 "Nay."  The Chairman stated the amendment failed.                             
                                                                               
 Number 425                                                                    
                                                                               
 SENATOR TAYLOR offered and moved the following Amendment No. 4:               
 Page 2, line:  Delete "16" and replace with "10"                              
                                                                               
 Senator Taylor explained that his amendment would give the                    
 department up front what they were going to do in the year 2000               
 anyway.                                                                       
                                                                               
 SENATOR RANDY PHILLIPS called for a hand vote on Amendment No. 4.             
 Senator Taylor voted "Yea" and Senators Leman and Phillips voted              
 "Nay."  The Chairman stated the amendment failed.                             
                                                                               
 Number 442                                                                    
                                                                               
 SENATOR RANDY PHILLIPS brought the following Amendment No. 3 by               
 Senator Adams before the committee:                                           
                                                                               
 Page 2:  Delete Section 3 and renumber the following sections.                
                                                                               
                                                                               
 MARLA BERG explained the amendment deletes Section 3 which relates            
 to changing the devisor from 16 to 17.  She added that Section 3              
 will cost the state $11.7 million with most of the benefit going to           
 urban communities.                                                            
                                                                               
 SENATOR RANDY PHILLIPS called for a hand vote on Senator Adams'               
 Amendment No. 3.  Senators Leman, Taylor and Phillips voted "Nay."            
 The Chairman stated the amendment failed.                                     
                                                                               
 Number 452                                                                    
                                                                               
 SHIRLEY ARMSTRONG pointed out that in the original SB 62, Section             
 3 speaks to the Area Cost Differential, but on page 4, line 14,               
 Section 6 speaks to the Alaska School Price Index.  Mr. Guiley has            
 suggested adding language which says that the department shall                
 establish the Alaska School Price Index by regulation.                        
                                                                               
 SENATOR TAYLOR moved a conceptual amendment that the language                 
 within the legislation be amended to reflect that the department              
 may accomplish both the survey and the method of calculating                  
 through regulations.  Hearing no objection, the Chairman stated the           
 conceptual amendment was adopted.                                             
                                                                               
 Number 472                                                                    
                                                                               
 SENATOR TAYLOR moved that CSSB 62(CRA), as amended, be passed out             
 of committee with individual recommendations.  Hearing no                     
 objection, it was so ordered.                                                 
                                                                               
 There being no further business to come before the committee, the             
 meeting was adjourned at 9:45 a.m.                                            

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