Legislature(2009 - 2010)HOUSE FINANCE 519
04/02/2010 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB171 | |
| HB357 | |
| HB344 | |
| HB317 | |
| HB355 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 317 | TELECONFERENCED | |
| + | HB 355 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 344 | TELECONFERENCED | |
| += | SB 171 | TELECONFERENCED | |
| += | HB 357 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
April 2, 2010
1:42 p.m.
1:42:12 PM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 1:42 p.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Vice-Chair
Representative Allan Austerman
Representative Mike Doogan
Representative Anna Fairclough
Representative Neal Foster
Representative Les Gara
Representative Reggie Joule
Representative Mike Kelly
MEMBERS ABSENT
Representative Mike Hawker, Co-Chair
Representative Woodie Salmon
ALSO PRESENT
Christine Marasigan, Staff, Senator Kevin Meyer; Deborah
Bitney, Director, Permanent Fund Dividend Division,
Department of Revenue; Ben Mulligan, Staff, Co-Chair
Stoltze; John Binkley, Chairman, Alaska Railroad
Corporation; John Cohen, Staff, Co-Chair Stoltze;
Representative Paul Seaton; Carl Rose, Executive Director,
Association of Alaska School Boards; Mary Francis,
Executive Director, Alaska School Administrators
Association (ASAA); Andi Story, Vice President, Juneau
School Board; Dave Jones, Assistant Superintendent, Kenai
Peninsula Borough School District; Amy Lujan, Executive
Director, Alaska Association of School Business Officials;
Eddy Jeans, Director, School Finances and Facilities,
Department of Education and Early Development;
Representative Max Gruenberg; Rick Svobodny, Deputy
Commissioner, Department of Law; Gretchen Staft, Staff,
Representative Max Gruenberg
PRESENT VIA TELECONFERENCE
Peter Hoepfner, School Board Member, Cordova School
District; Lon Garrison, President, Sitka School Board;
Karen Martinsen, Co-Chair, Vocational Technical Education
Providers, Sitka; Steve Bradshaw, Superintendent, Sitka
School District
SUMMARY
HB 317 EDUC. FUNDING: BASIC/SPEC NEEDS/TRANSPORT
HB 317 was HEARD and HELD in Committee for
further consideration.
HB 344 SALMON PRODUCT DEVELOP. TAX CREDIT
CSHB 344(FIN) was REPORTED out of Committee with
a "do pass" recommendation and a new fiscal note
from the Department of Revenue.
HB 355 CRIMINAL FINES FOR ORGANIZATIONS
CSHB 355(JUD) was REPORTED out of Committee with
a "do pass" recommendation and with previously
published zero fiscal note: FN1 (LAW).
HB 357 AK RAILROAD CORP. LAND SALES
CSHB 357(FIN) was REPORTED out of Committee with
no recommendation and with previously published
fiscal note: FN1 (CED).
SB 171 PERMANENT FUND DIVIDEND FOR DECEASED
HCS CSSB 171(FIN) was REPORTED out of Committee
with a "do pass" recommendation and with a new
fiscal note from the Department of Revenue and
previously published fiscal note: FN2 (REV).
1:42:29 PM
SENATE BILL NO. 171
"An Act relating to the permanent fund dividend of an
otherwise qualified individual who dies during the
qualifying year; and providing for an effective date."
CHRISTINE MARASIGAN, STAFF, SENATOR KEVIN MEYER, presented
the overview of the bill. The bill provides for an issuance
of a permanent fund dividend (PFD) check to a personal
representative of an estate or successor claiming the
personal property of the deceased, should an otherwise
eligible individual die during the qualifying year.
Co-Chair Stoltze added that the bill includes modifications
to "Pick, Click and Give". He inquired if Ms. Marasigan
agreed with those additions to the bill. She said she did.
1:44:48 PM
Vice-Chair Thomas MOVED to adopt Amendment 1:
Page 4, following line 31:
Insert a new bill section to read:
"*Sec.6 AS 43.23.062(f) is amended to read:
(f) The department may charge [ESTABLISH] an
application fee of $250 [NOT TO EXCEED $50] for each
educational organization, community foundation, or
charitable organization that files an application
under (d) of this section. The application fees shall
be separately accounted for under AS 37.05.142. The
annual estimated balance in the account maintained
under AS 37.05.142 for application fees collected
under this subsection may be appropriated for costs of
administering this section."
Renumber the following bill sections accordingly.
Page 5, line 16:
Delete "Sections 1 - 7"
Insert "Sections 1 - 8"
Co-Chair Stoltze OBJECTED for discussion.
Vice-Chair Thomas explained that the amendment would charge
an application fee of $250 for each educational
organization, community foundation, or charitable
organization that files an application under the "Pick,
Click, and Give" program. He reported that there has been
$815,000 committed to the program at this time. This is a
46 percent increase over last year. The amendment will
raise roughly $62,750.
Co-Chair Stoltze concluded that the fee would not be a
barrier for the organizations. Vice-Chair Thomas agreed.
1:47:26 PM
Representative Fairclough asked about uncollected remaining
costs of providing the service. She wondered if the $250
charge covered all costs of the program. Vice-Chair Thomas
noted the attempt to match 50 percent of the required
fiscal note.
Representative Fairclough inquired if 50 percent was
unmatched. Vice-Chair Thomas responded that $65,000 is the
unmatched amount. Representative Fairclough wondered why
the amount of $500 is not being requested. Vice-Chair
Thomas said it was because non-profits were paying for it.
Representative Fairclough noted she was sensitive to non-
profits, but she was also sensitive to the state's
position. She suggested that it seemed reasonable to reach
for 100 percent coverage.
Representative Foster asked if it was an annual or one-time
fee. Vice-Chair Thomas said it was an annual fee.
1:49:43 PM
Representative Austerman inquired if it was the only fee.
DEBORAH BITNEY, DIRECTOR, PERMANENT FUND DIVIDEND,
DEPARTMENT OF REVENUE, stated that it was the only fee
charged to the non-profits choosing to participate.
Representative Foster asked if there were many
organizations that don't receive $250 in contributions. Ms.
Bitney responded that there were 378 total non-profits
receiving pledges, and 61 received $250 or less in
contributions.
1:51:16 PM
Representative Doogan questioned the fiscal note of $86,700
a year. He wondered if it was the only fiscal note attached
to the bill. Co-Chair Stoltze thought there should be an
updated fiscal note.
Representative Foster requested more statistics related to
how much non-profits received.
Ms. Bitney related that 43 organizations received between
$275 and $500 in pledges. That leaves 274 organizations
that received $500 or more. It is anticipated that there
will be about $68,500 from application fees.
1:53:12 PM
Representative Fairclough did not wish to advocate for the
$500 fee this year due to the newness of "Pick, Click, and
Give". She spoke of other organizations which benefit by
the elimination of the middle man. She pointed out that it
creates technical challenges and additional paperwork for
the Department of Revenue. She agreed that $250 was the
right number for this year, but in the future it might be
revised.
Co-Chair Stoltze gave his opinion about another "check
off". He thought there ought to be a cut-off point for
organizations that don't profit by this avenue. He expected
to revisit the issue again.
1:56:24 PM AT EASE
2:08:52 PM RECONVENED
Vice-Chair Thomas WITHDREW Amendment 1.
Vice-Chair Thomas MOVED to ADOPT HCS for CSSB 171(FIN),
labeled 26-LS0804\C, Cook, 2/5/10, as the working document
before the committee.
There being NO OBJECTION, it was so ordered.
Vice-Chair Thomas MOVED to ADOPT Amendment 2:
Page 4, following line 31:
Insert a new bill section to read:
"*Sec.6 AS 43.23.062(f) is amended to read:
(f) The department shall charge [ESTABLISH] an
application fee of $250 [NOT TO EXCEED $50] for each
educational organization, community foundation, or
charitable organization that files an application
under (d) of this section. The application fees shall
be separately accounted for under AS 37.05.142. The
annual estimated balance in the account maintained
under AS 37.05.142 for application fees collected
under this subsection may be appropriated for costs of
administering this section."
Renumber the following bill sections accordingly.
Page 5, line 16:
Delete "Sections 1 - 7"
Insert "Sections 1 - 8"
Co-Chair Stoltze OBJECTED.
2:10:15 PM
Representative Austerman commented on the number of
organizations on the list that would not profit if the fee
were to be $500. The concept behind "Pick, Click, and Give"
is to enable the organizations to raise money. He was
opposed to having the higher fee.
Ms. Bitney noted there were 274 organizations that receive
more than $500 in pledges.
Representative Fairclough spoke of a time when community
members selected charities to support. She shared the
history of a United Way campaign in Anchorage. She
maintained that individual Alaskans show value for each
organization with their donation. Increasing the cost does
not disenfranchising charities. She shared a personal
experience with donations and concluded that the program
does not make it harder for charities, but increases the
load for the departments. She thought that the list should
contain a threshold. She spoke in support of the amendment.
2:15:14 PM
Representative Kelly pointed out that the cost of
fundraising for organizations was pretty high and $250 was
a bargain. He thought it was a great program and would be
self-selecting.
Representative Fairclough related that the advantage is
that it appears donations have gone up substantially.
Representative Foster believed that the seven-page of list
of organizations was comprehensive.
2:17:17 PM
A roll call vote was taken on the motion.
IN FAVOR: Doogan, Fairclough, Foster, Joule, Kelly, Thomas,
Stoltz, Gara
OPPOSED: Austerman
The MOTION PASSED (8-1)
BEN MULLIGAN, STAFF, CO-CHAIR STOLTZE, pointed out that in
the fund source section of the fiscal note the program
receipts total should be $68,500, not $18,800. This will
bring the total to $64,000, which will reduce the fiscal
impact by half.
Vice-Chair Thomas MOVED to report HCS CSSB 171(FIN) out of
Committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
HCS CS SB 171(FIN) was REPORTED out of Committee with a "do
pass" recommendation and with a new fiscal note from
Department of Revenue and previously published fiscal note:
FN2 (REV)
2:20:25 PM
HOUSE BILL NO. 357
"An Act relating to the sale of land owned by the
Alaska Railroad that is not needed for railroad
purposes."
Co-Chair Stoltze inquired about the reason that the Alaska
Railroad does not fall under the Budget Act and how fiscal
notes are issued.
JOHN BINKLEY, CHAIRMAN, ALASKA RAILROAD CORPORATION,
deferred to staff to answer.
Co-Chair Stoltze asked Mr. Binkley to read a letter he had
sent to committee members. Mr. Binkley reported on
strategies to work closer with the railroad's partners and
leaseholders. One is to change the requirement that
leaseholders pay a $300 fee whenever they are applying for
a renewal or an original lease. Another is to change to
electronic notices. He suggested a change to the
leaseholder's policy so that when an appraisal decreases,
the rent decreases. He proposed to have more meaningful
discussions to look for efficiencies for leaseholders, yet
protect investments for shareholders.
2:24:54 PM
Representative Gara questioned what the railroad would do
with money from land sales. The bill says that the
corporation should separately account for the money, but
does not say how the money is to be spent. The bill also
says, "Money in the account may be appropriated in
accordance with the Railroad Transfer Act." Representative
Gara asked if the money could go toward staff costs or
salaries.
Mr. Binkley did not think so.
2:26:24 PM
Co-Chair Stoltze noted that Legal Services pointed out a
possibility that a change made to the bill in the House
Transportation Committee may have violated the
constitution, so a new committee substitute was written.
Vice-Chair Thomas MOVED to ADOPT the CS for HB 357 (FIN),
26-LS1356\S, Bullock, 3/30/10, as the working document.
Co-Chair Stoltze OBJECTED.
JOHN COHEN, STAFF, CO-CHAIR STOLTZE, explained a one-word
change on page 2, line 9. The word "appropriated" was
changed to "used" by the House Transportation Committee.
The attached Legal Services memo explains that this was out
of compliance with the state constitution. It violates the
federally mandated dedicated fund for railroad
appropriation usage. The change in Version S reverts "used"
back to "appropriated".
Co-Chair Stoltze WITHDREW his OBJECTION. There being NO
further OBJECTION, CSHB 357(FIN) 26-LS1356\S, Bullock,
3/30/10 was adopted.
2:28:09 PM
Co-Chair Stoltze read the Letter of Intent for HB 357:
It is the intent of HB 357, "An Act relating to the
sale of land owned by the Alaska Railroad that it is
not intended for railroad purposes," to not impact any
outstanding Federal issue which has not been resolved
in regards to railroad lands, easements, or rights-of-
way. It is not the intent of this legislation to
impede, damage, or disrupt any ongoing claims, issues,
or cases involving the Alaska Railroad Corporation and
governmental, tribal, or private sector disputes.
Co-Chair Stoltze MOVED to ADOPT the Letter of Intent. There
being NO OBJECTION, it was so ordered.
2:29:05 PM
Representative Kelly remarked that the Letter of Intent
would cover the previously mentioned concern.
Vice-Chair Thomas MOVED to report CSHB 367(FIN) out of
Committee with individual recommendations, the Letter of
Intent, and the accompanying fiscal note.
Co-Chair Stoltze OBJECTED.
Representative Gara supported the sponsor's intent, but he
was not sure that the railroad should be allowed to sell
land that belongs to the state and keep the money.
Co-Chair Stoltze shared some of the same concerns.
Co-Chair Stoltze WITHDREW his objection
CSHB 357(FIN) was REPORTED out of Committee with no
recommendation and with previously published fiscal note:
FN1 (CED)
2:31:47 PM
HOUSE BILL NO. 344
"An Act relating to the salmon product development tax
credit; and providing for an effective date by
amending an effective date in sec. 7, ch. 57, SLA
2003, as amended by sec. 4, ch. 3, SLA 2006, and by
sec. 4, ch. 8, SLA 2008."
Co-Chair Stoltze WITHDREW his OBJECTION to adopting the CS
for HB 344. There being NO OBJECTION, it was so ordered.
Vice-Chair Thomas clarified that an ice making machine is
the internal parts of an ice house. The ice house is not
part of the tax credit.
Representative Doogan inquired about Alaska Glacier
Seafood's plan to increase its ice handling capacity and
widen the dock forty-five feet in order to add a new ice
facility. He assumed that the costs of that expansion would
not qualify for the tax credit.
Vice-Chair Thomas said that was true.
Co-Chair Stoltze noted the fiscal note, which remains
unchanged. It will reflect a change as a result of the new
CS.
Representative Fairclough asked if maintenance and repairs
of the items would qualify for the tax credit. Vice-Chair
Thomas thought that maintenance would not qualify, only the
actual capital construction of the ice-making portion.
Co-Chair Stoltze MOVED to report CSHB 344 (FIN) out of
Committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSHB 344(FIN) was REPORTED out of Committee with a "do
pass" recommendation and a new fiscal note from the
Department of Revenue.
2:37:17 PM
HOUSE BILL NO. 317
"An Act increasing the special needs funding and base
student allocation for public schools, and extending
the adjustment for student transportation funding; and
providing for an effective date."
REPRESENTATIVE PAUL SEATON, SPONSOR, explained that the
bill is intended to continue the policy direction thr state
has taken the last three years. One of the main purposes of
the bill is to prevent the rounds of teacher lay-offs that
have been occurring. It was the mechanism designed by the
Joint Legislative Education Funding Task Force to provide
budget information to school districts.
Representative Seaton related that Section 1 extends the
inflation adjustment for pupil transportation that was
established in 2008 through 2014. Those adjustments would
reflect any increases in consumer price increases. It would
ensure that if there was a negative adjustment, it would
not take place.
Representative Seaton explained that Section 2 of the bill
increases the block grant funding, which is 20 percent of
the amount a school district receives for the purposes of
special education, gifted and talented, vocational, and bi-
lingual education. The increase is 1.5 percent.
Representative Seaton referred to a Letter of Intent which
explains the goal of stimulating more spending and access
for the 70 percent of students that don't go to college. It
is directed to encourage vocational education across the
state. It is not category funding. Individual districts
have the ability to use funds as needed.
Representative Seaton said that Section 3 provides for the
same amount - 1.5 percent - the following year. Sections 4
and 5 increase the base student allocation (BSA) by $125
for each of the following years - FY 2012 and FY 2013. The
legislature originally provided for three years, but the
Task Force decided not to do that due to mid-session
timing. He explained the effective dates in the bill.
2:42:22 PM
Representative Doogan questioned the FY 2012 cost of $45
million. He wondered how much would be special needs
funding and how much would be BSA.
Representative Seaton responded that $30 million is the
$125 BSA increase and $14.7 million would be the intended
vocational increase.
Vice-Chair Thomas asked if any consideration is being given
to the dropout rate of between 30 percent and 40 percent.
Representative Seaton mentioned a number of solutions, such
as aligning curriculum. The Anchorage School District is
working on an advisor/advocate program for at risk students
and has increased the graduation rate by 5 percent. Six
schools on the Kenai Peninsula have also gone to advisor
programs and have increased the graduation rate by 12-15
percent. The BSA increase has allowed school districts to
accomplish the goal of decreasing dropout rates. There is
also another bill which looks at improving the rigor of the
high school curriculum.
Representative Seaton reported on successes in reducing the
dropout rate, but noted that there are still some problems
in some districts. He emphasized a need for more vocational
education, which the Letter of Intent directs.
Vice-Chair Thomas inquired why the Task Force is only
concentrating on the Anchorage and Kenai area and not the
entire state. He opined it should be shared statewide. He
spoke of dropout rates in his district. He wondered if
there were funds available for schools that did not qualify
for the Governor's Performance Scholarship (GPS) fund.
2:49:01 PM
Representative Seaton pointed out that efforts were taking
place in the Chugiak School District and in Prince William
Sound, which now has a 98 percent graduation rate. There
are successes in rural locations, as well as in urban
locations. The use of traveling teachers is also being
considered. He pointed out that the bill emphasizes
vocational education as a solution to increasing graduation
results. He spoke of another bill that would coordinate
efforts between models used in various districts. He
invited everyone to attend an upcoming Joint Education
Committee meeting regarding Moore vs. Alaska.
2:51:39 PM
Co-Chair Stoltze appreciated Representative Seaton's work
on the bill and on the GPS.
Representative Fairclough asked if the Education Committee
has taken on the issue of Continuing Learning Credits;
aligning them with curriculum and teachers across Alaska.
Representative Seaton inquired if Representative Fairclough
was referring to teacher education. She said she was
referring to required continuing learning credits.
Representative Seaton reported that the University of
Alaska has presented a report to the legislature on that
topic. The committee is looking at aligning and promoting
those credits. The goal is to improve teachers in
education, not just in subject matter.
Representative Fairclough heard that teachers could choose
to get credits in subjects other than the ones they were
teaching. She asked how the committee was implementing
strategies outlined by the Task Force. She noted that all
of the money had been implemented, but thought many issues
remained.
Representative Seaton related that most of the issues have
been addressed. Representative Seaton explained that the
questions were given a written response.
2:55:52 PM
Representative Fairclough requested more information about
a planned committee whose task it was to address Task Force
issues. She offered to meet at a later date to discuss it.
Representative Seaton reported that an interim commission
was drawn up and the members have recently been appointed.
2:56:43 PM
Representative Kelly asked what happens to the BSA after
the three-year plan and the meeting requirements have been
met. He requested the incremental cost. Representative
Seaton thought it was about $17 million, or 1.5 percent,
but offered to get back with the exact number.
Representative Kelly inquired how the carry forward was
reflected on the $17 million. Representative Seaton asked
if he was referring to reducing the intensive needs
funding.
Representative Kelly reworded his question. Representative
Seaton explained that it is mostly reflected in the 1.5
percent increase to the BSA for vocational technical
education. He added that education was seen as an intensive
needs piece that was accomplished. The piece that is
lacking is vocational education. About 70 percent of
students will not go through a college curriculum;
therefore, more efforts should be spent on vocational
course work.
3:00:46 PM
PETER HOEPFNER, SCHOOL BOARD MEMBER, CORDOVA SCHOOL
DISTRICT (via teleconference), read a statement from
Superintendent Jim Nygaard. The letter emphasized that the
bill is critical to vocational programs, staffing, and
equipment needs in Cordova. He spoke in support of the
forward funding provided in the bill.
Mr. Hoepfner supported the bill and future funding. It
would help with special needs, as well as with the gifted
and learning program which has been lost.
3:03:50 PM
Vice-Chair Thomas asked if the last three years' increase
in BSA has seen any success in decreasing the dropout rate.
Mr. Hoepfner noted that the dropout rate in Cordova was not
very high. He pointed out that dropouts tend to be the more
gifted students and that may be due to the elimination of
the Gifted and Talented Program. He appreciated the funding
of computers.
3:05:39 PM
LON GARRISON, PRESIDENT, SITKA SCHOOL BOARD (via
teleconference), testified in support of HB 317 and the
continued good work of the Education Task Force. The block
grant, increased BSA, and intensive-needs multiplier are
extremely important to Sitka and other coastal communities.
He spoke of reduced funding sources in Sitka which would
have a negative impact on schools. He appreciated the
funding predictability contained in HB 317. He noted that
Sitka has a low drop-out rate of only 5 percent. He hoped
to continue to engage students with the assistance of
multi-year funding.
3:08:59 PM
KAREN MARTINSEN, CO-CHAIR, VOCATIONAL TECHNICAL EDUCATION
PROVIDERS, SITKA (via teleconference), reminded the
committee that recently the Department of Education and the
Department of Labor have combined efforts to create a
statewide Career and Technology Education (CTE) Plan. She
opined that the bill would begin to meet the need to turn
around the decline of a qualified workforce. She emphasized
that CTE is one of the fourteen best practices to prevent
dropouts. Rural schools have a strong network of regional
training centers throughout the state. She spoke in strong
support of the bill.
STEVE BRADSHAW, SUPERINTENDENT, SITKA SCHOOL DISTRICT (via
teleconference), responded to the dropout question. Sitka
School District has been involved in a dropout prevention
grant, along with Juneau and Ketchikan, in order to attempt
to add a cultural awareness piece to the curriculum. At a
meeting with the Departments of Education, Justice, Labor,
and Health and Human Services in the Governor's Office,
there was discussion about how to enforce student
attendance. He spoke in support of the bill and thanked the
House Education Committee for their work. He spoke of a
history of cuts in vocational education.
3:14:43 PM
CARL ROSE, EXECUTIVE DIRECTOR, ASSOCIATION OF ALASKA SCHOOL
BOARDS, spoke in support of HB 317. The operational
stability of school districts depends on knowing what kind
of funding there will be. There needs to be a smooth
teacher retention transition from year to year. He
responded to the dropout issue by stating that there are 53
school districts in the state and each one experiences a
different school climate. There is improved student
performance in schools where students feel safe and cared
for. School partnerships with communities also make a
difference. Students need to be engaged to be successful.
The Consortium for Digital Learning shows that attendance
increases when students are engaged. Digital Learning will
improve school achievement. Many school districts are also
offering additional instruction.
Mr. Rose related that he served on the Funding Task Force,
which addressed a number of issues. The bill extends the
task force's work for two years, addresses career
technology through the block grant, ensures increases in
the Consumer Price Index (CPI), but not decreases in
transportation, and is an opportunity to increase funding
for FY 2012 and FY 2013.
3:20:40 PM
Representative Doogan asked if the BSA amount the three
previous years was $100. Mr. Rose said that was correct.
Representative Doogan requested an explanation for the
necessity to increase that amount to $125. Mr. Rose
recalled discussion of that decision. He thought that $125
was an appropriation amount. He pointed out that there had
not been an increase in the block grant since SB 36 in
1998.
Representative Doogan wondered if there was another reason
to move from $100 to $125 for the next two years. Mr. Rose
answered that the amount was $100 per year the last two
years and for the current year. It was recognized that
there are intensive needs, where actual cost per child can
run from $75,000 to $500,000. As costs continue to
increase, the goal was to try to keep up with those costs.
3:23:04 PM
Representative Gara commented on keeping school funding up
with inflation. He did not feel obligated to keep the
funding at $100 because the task force left the amount
unresolved. He spoke of an increase in special needs
funding and in the cost differential. He voiced concern
about schools not being able to keep up and having to dip
into other money. The Anchorage CPI inflation increase for
2008 was 4.6 percent and for 2009 it was 1.2 percent. The
last three-year average was roughly 2.7 percent. He
concluded that $125 for two years would result in a 2.2
percent increase and not keep up with inflation. He asked
Mr. Rose to comment.
Mr. Rose replied that there is concern about inflation and
there has been talk of inflation-proofing the foundation
formula and transportation.
Representative Gara reported that schools received benefits
the last two years in the form of special needs funding and
area cost differential. He asked if his analysis of
inflation was correct and if special needs funding and cost
differential funding would be used to combat inflation.
Mr. Rose responded that regular instruction funds would be
used to cover special needs programs, which are mandated.
The students who generate the majority of the money in
regular instruction are supplementing the rest of the
budget. With the increase in the block grant and with the
Letter of Intent that looks at career and technical
education, special education will still need to be
subsidized. There are unmet needs everywhere. He saw HB 317
as a means of being able to plan ahead.
Representative Gara asked if Mr. Rose could recommend a
number that would prevent the need to dip into
instructional costs. Mr. Rose said he could not.
3:28:57 PM
MARY FRANCIS, EXECUTIVE DIRECTOR, ALASKA SCHOOL
ADMINISTRATORS ASSOCIATION (ASAA), recalled her experience
as a former superintendent and praised forward funding for
school districts. She said she represents a group that
supports HB 317. She mentioned that the additional money
for Career and Vocational Education is much needed. The
Alaska Staff Network, a division of ASAA, offers dropout
preventions symposiums throughout the year. She spoke in
support of the bill.
Representative Gara asked Ms. Francis if she has any
concern about the level of the BSA proposed in the bill not
keeping up with inflation. Ms. Francis shared concerns
about keeping up with inflation and stated support for
inflation-proofing the BSA.
3:31:21 PM
ANDI STORY, VICE PRESIDENT, JUNEAU SCHOOL BOARD, testified
on behalf of the board and in support of HB 317. The bill
helps schools plan efficient budgets, lays out a foundation
of stability, and maximizes resources for students. She
spoke of the difficulties small districts experience when
they are not able to plan ahead. She pointed out that it is
important to remember that the block grant has not
increased since 1998. She shared information about the four
levels covered by the block grant. There is an increased
need for a highly skilled workforce in Alaska at this time.
She informed the committee that Juneau's graduation rate
has increased to 77 percent, an increase of 7 percent. She
spoke in strong support of the bill because it will benefit
students every day.
3:35:33 PM
DAVE JONES, ASSISTANT SUPERINTENDENT, KENAI PENINSULA
BOROUGH SCHOOL DISTRICT, testified in support of the
forward funding provided in HB 317. He thanked the
committee for forward funding in the three previous years,
which enabled the Kenai Schools to have a long-range
educational plan called Programmatic Staffing. This program
increased staffing in targeted areas with the goal of
improving the graduation rate. At Monday's board meeting
non-tenured contracts will be issued - the earliest date
ever in the Kenai District.
Co-Chair Stoltze asked what the tenure length is. Mr. Jones
replied that it was three years and one day. He added that
HB 317 would allow the district to move along in the
program and continue to improve in the areas targeted. He
noted that federal health care reform will have a major
affect on school board budgets.
3:40:42 PM
Representative Doogan observed that there would have been
no problems with pink slips for non-tenured teachers, if
people had supported a previous bill that would have
changed school funding deadlines.
3:41:55 PM
AMY LUJAN, EXECUTIVE DIRECTOR, ALASKA ASSOCIATION OF SCHOOL
BUSINESS OFFICIALS, testified in support of past forward
funding for schools. She shared her experience with being
able to plan budgets in schools. Adding certainty to the
funding process helps schools lessen the dropout rate. She
spoke in support of HB 317.
EDDY JEANS, DIRECTOR, SCHOOL FINANCES AND FACILITIES,
DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, introduced
himself. He took questions to be answered at a later date.
Representative Kelly wanted information about the higher
education CPI.
Representative Joule wanted to hear why Alaska is not
participating in the Race for the Top.
Representative Kelly requested information on school
graduation rates.
Representative Gara asked for statistics on inflation and
how BSA might meet inflation increases.
Mr. Jeans replied that the only component in the
department's budget that is adjusted for inflation is the
Pupil Transportation Grant program, which uses a three-year
average.
3:47:01 PM
Vice-Chair Thomas inquired if there was anything in the
bill which addresses the Moore vs. Alaska case. Mr. Jeans
reported that there would be a Joint Education Committee
meeting to present the department's side of the Moore case.
HB 317 was HEARD and HELD in Committee for further
consideration.
3:48:44 PM
HOUSE BILL NO. 355
"An Act relating to criminal fines for organizations."
REPRESENTATIVE MAX GRUENBERG talked about Version P, the
House Judiciary version of HB 355, which raises the amount
of fines for corporations and other criminal organizations,
as shown on lines 7-13, page 1. It has been a number of
years since those fines were raised. The size of necessary
deterrents has not kept pace with the crimes, which are
often large. Under AS 11.16.130, a corporation or
partnership is legally accountable in a criminal sense for
the operations or conduct of an agent employed by the
company. The criminal fine section is key in deterring
organizational crime.
Representative Gruenberg addressed the second purpose of
the bill, which begins on page 2, lines 1-7, and closes a
loophole. He gave an example of a bribe whose purpose was
to stop a tax. The tax went through any way, resulting in
no gain to the defendant and no loss to the victim. He
termed the example a conspiracy - a criminal contract to
commit a crime.
Representative Gruenberg described the third category
covered in the bill, criminal solicitation - a request for
someone else to commit a crime. The statute is crafted so
that the maximum a judge can order is three times the gain
to the defendant, or three times the loss to the victim.
This provides for a reasonable deterrent.
Representative Gruenberg added that there is no fiscal
impact from the bill. All fines collected would go into the
general fund.
Co-Chair Stoltze questioned the inclusion of the
applicability section on page 2, lines 10-11.
Representative Gruenberg responded that it is in the bill
so there's no question that it would be applied in an
unconstitutional ex post facto manner.
3:56:36 PM
RICK SVOBODNY, DEPUTY COMMISSIONER, DEPARTMENT OF LAW,
introduced himself. He noted that the Department of Law
supports the bill.
Representative Fairclough inquired when the fines were last
raised or adjusted. Mr. Svobodny replied that there was a
raise in the penalty provisions for non-corporate crimes
three years ago, but he did not know if corporate crimes
were included.
GRETCHEN STAFT, STAFF, REPRESENTATIVE GRUENBERG, noted the
fines on page 1, lines 9-13, were last set in 1990. The
amount on page 1, line 7, was set in 2002.
Representative Fairclough asked what the increase prior to
2002 was. Ms. Staff said she would have to research that
information. She believe it increased from $500,000 to $1
million.
Representative Foster inquired how these amounts compare to
other states. Ms. Staff replied that they were slightly
higher than other states, but they are maximums and the
court can set a lower fine.
4:00:11 PM
Ms. Staff read that the fines depend on the type and level
of the crimes. Some states do not separate felony from
misdemeanor crimes. She gave examples of fines in various
states.
Co-Chair Stoltze requested the data in writing.
Representative Gruenberg pointed out that the numbers were
suggestions. He left the decisions up to the committee.
Representative Fairclough wanted further justification for
increasing the fines.
4:02:43 PM
Mr. Svobodny gave an example of a fine. Three years ago the
state was in a process of investigating BP for the shutdown
of the North Slope oil fields based on BP's negligence. At
that time the maximum fine would have been $500,000. The
state ultimately agreed to join with the federal government
in a resolution of that case which resulted in a penalty of
$4 million. Some corporations have conduct that can result
in fairly large penalties.
Co-Chair Stoltze spoke in support of the bill.
4:04:41 PM
Representative Kelly commented that it looked like a huge
disparity compared with other states. He thought it wasn't
business friendly.
Co-Chair Stoltze maintained that the state was only being
unfriendly to businesses that commit a crime.
Representative Doogan thought the amount might not be
enough for some of the kinds of crimes imagined.
4:05:59 PM
Representative Gara commended the closing of a loophole in
the bill.
Co-Chair Stoltze referred to a zero fiscal note.
Vice-Chair Thomas MOVED to report CSHB 355(JUD) out of
Committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSHB 355(JUD) was REPORTED out of Committee with a "do
pass" recommendation and with previously published zero
fiscal note: FN1 (LAW)
ADJOURNMENT
The meeting was adjourned at 4:08 PM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 3.Letter of intent CSHB317.pdf |
HFIN 4/2/2010 1:30:00 PM |
HB 317 |
| 4.HB 317 sponsor statment.docx |
HFIN 4/2/2010 1:30:00 PM |
HB 317 |
| 5.HB317 changes between original and CS.docx |
HFIN 4/2/2010 1:30:00 PM |
HB 317 |
| 10.Increases to education funding chart from DEED.pdf |
HFIN 4/2/2010 1:30:00 PM |
HB 317 |
| 11.AMYAHouseEdCommQuestions.pdf |
HFIN 4/2/2010 1:30:00 PM |
HB 317 |
| 12.support.pdf |
HFIN 4/2/2010 1:30:00 PM |
HB 317 |
| 01 HB355 Sponsor Statement[1].pdf |
HFIN 4/2/2010 1:30:00 PM |
HB 355 |
| HB 355 Explanation of Changes.pdf |
HFIN 4/2/2010 1:30:00 PM |
HB 355 |
| HB 355 Law Review Article.pdf |
HFIN 4/2/2010 1:30:00 PM |
HB 355 |
| HB 317 Amendment #1 Gara.pdf |
HFIN 4/2/2010 1:30:00 PM |
HB 317 |
| SB 171 Amendment Thomas.pdf |
HFIN 4/2/2010 1:30:00 PM |
SB 171 |
| CSSB 171 Sponsor Statement.pdf |
HFIN 4/2/2010 1:30:00 PM |
SB 171 |
| CSSB 171 Memo on changes 04092009.pdf |
HFIN 4/2/2010 1:30:00 PM |
SB 171 |
| CSSB171(FIN)-REV-PFD-02-09-10NEW PFD for Deceased Individuals.pdf |
HFIN 4/2/2010 1:30:00 PM |
SB 171 |
| HB 357 WORKDRAFT CS 26-LS1356 S Version.pdf |
HFIN 4/2/2010 1:30:00 PM |
HB 357 |
| HB 357 Letter of Intent.pdf |
HFIN 4/2/2010 1:30:00 PM |
HB 357 |
| HB 357 Legal Memo.pdf |
HFIN 4/2/2010 1:30:00 PM |
HB 357 |
| HB 357 City of Whittier Letter.pdf |
HFIN 4/2/2010 1:30:00 PM |
HB 357 |
| HB357 Sponsor Statement.pdf |
HFIN 4/2/2010 1:30:00 PM |
HB 357 |
| HB 317 Gara Amendment Backup.pdf |
HFIN 4/2/2010 1:30:00 PM |
HB 317 |
| HB 317 Amendment Gara #2.pdf |
HFIN 4/2/2010 1:30:00 PM |
HB 317 |
| SB 171 CS WORKDRAFT 26 LS0804 C Version.pdf |
HFIN 4/2/2010 1:30:00 PM |
SB 171 |
| SB 171 Fiscal Note DOR.pdf |
HFIN 4/2/2010 1:30:00 PM |
SB 171 |