Legislature(2001 - 2002)

04/10/2001 02:00 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 10, 2001                                                                                           
                          2:00 PM                                                                                               
                                                                                                                                
TAPE HFC 01 - 79, Side A                                                                                                        
TAPE HFC 01 - 79, Side B                                                                                                        
TAPE HFC 01 - 80, Side A                                                                                                        
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Williams called the House  Finance Committee meeting                                                                   
to order at 2:00 PM.                                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bill Williams, Co-Chair                                                                                          
Representative Eldon Mulder, Co-Chair                                                                                           
Representative Con Bunde, Vice-Chair                                                                                            
Representative Eric Croft                                                                                                       
Representative John Davies                                                                                                      
Representative John Harris                                                                                                      
Representative Bill Hudson                                                                                                      
Representative Ken Lancaster                                                                                                    
Representative Jim Whitaker                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Carl Moses                                                                                                       
Representative Richard Foster                                                                                                   
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Fred  Dyson; Representative  Gretchen  Guess;                                                                   
Wess  Keller,   Staff,  Representative   Fred  Dyson;   Bruce                                                                   
Johnson,  Deputy Commissioner,  Department  of Education  and                                                                   
Early  Development; Eddy  Jeans, Manger,  School Finance  and                                                                   
Facilities  Section,   Department  of  Education   and  Early                                                                   
Development;   Sarah   Felix,    Deputy   Attorney   General,                                                                   
Department of  Law; Joe Balash,  Staff, Senate  State Affairs                                                                   
Committee.                                                                                                                      
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Brooke Miles,  Alaska Public Officers Commission,  Anchorage;                                                                   
Susie   Barnett,    Administrator,   Select    Committee   on                                                                   
Legislative  Ethics, Anchorage;  Debbie Ossiander,  Anchorage                                                                   
School Board,  Anchorage; Darroll  Hargraves, Alaska  Council                                                                   
of  School  Administrators; Larry  Semmens,  Aurora  Borealis                                                                   
School, Kenai;  Pat Hickey, Kenai Peninsula  School District,                                                                   
Kenai; Avrum Gross, Juneau;                                                                                                     
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 101    "An Act relating to  charter schools; and providing                                                                   
          for an effective date."                                                                                               
                                                                                                                                
          HB 101 was heard and HELD in Committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
HB 193    "An  Act  relating  to the  primary  election;  and                                                                   
          providing for an effective date."                                                                                     
                                                                                                                                
          HB 193 was heard and HELD in Committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
HB 203    "An Act making an appropriation  to the Legislative                                                                   
          Council for a study of school district cost                                                                           
          factors; and providing for an effective date."                                                                        
                                                                                                                                
          CSHB 203 (FIN) was REPORTED out of Committee with                                                                     
          a "do pass" recommendation.                                                                                           
                                                                                                                                
CSSB 103(FIN)                                                                                                                   
          "An Act relating to election campaigns and                                                                            
          legislative ethics."                                                                                                  
                                                                                                                                
          CSSB 103(FIN) was heard and HELD in Committee for                                                                     
          further consideration.                                                                                                
HOUSE BILL NO. 101                                                                                                            
                                                                                                                                
     "An Act relating to charter schools; and providing for                                                                     
     an effective date."                                                                                                        
                                                                                                                                
REPRESENTATIVE FRED  DYSON, SPONSOR, testified  in support of                                                                   
HB 101. He noted that the legislation  is nearly identical to                                                                   
a bill, which  nearly made it through the legislation  in the                                                                   
past  year. He  maintained  that  state of  Alaska's  charter                                                                   
school law is among the weakest in the nation.                                                                                  
                                                                                                                                
Representative  Dyson  discussed   changes  to  the  existing                                                                   
charter  school law  in HB  101.  He observed  that the  bill                                                                   
eliminates  the  2005  sunset  clause. It  also  extends  the                                                                   
allowable contract  length from 5 to 10 years  and eliminates                                                                   
the  geographic distribution  requirements.  The  legislation                                                                   
clarifies   that  charter   schools  are   not  exempt   from                                                                   
competency testing.                                                                                                             
                                                                                                                                
Representative Dyson  observed that the previous  legislation                                                                   
mandated   that  school  districts   provide  an   accounting                                                                   
statement  for  student allotment  and  local  contributions.                                                                   
This has been  eliminated. The new legislation  also abandons                                                                   
the attempt to  mandate distribution of a pro-rated  share of                                                                   
local contributions to charter schools.                                                                                         
                                                                                                                                
Representative  Dyson explained  that  the legislation  would                                                                   
allow charter schools  to be counted as a separate  school if                                                                   
the  ADM is  over  150  (AS 14.17.905).  He  emphasized  that                                                                   
charter schools  tend to be small  and that this  would allow                                                                   
them  to receive  the  same funds  as  other  schools in  the                                                                   
district per  student. The legislation  also provides  a one-                                                                   
time 'start-up" grant  of $500 dollars per person  and allows                                                                   
for  charter  school  use  of   safe  public  buildings  with                                                                   
district superintendent approval.                                                                                               
                                                                                                                                
Vice-Chair  Bunde observed  that charter  schools funds  come                                                                   
from  the district's  total  state support.  The  legislation                                                                   
would free funds for the district.                                                                                              
                                                                                                                                
Representative Croft questioned  if the legislation is a cost                                                                   
shifting measure. Representative  Dyson acknowledged that the                                                                   
fiscal note  would provide an  additional $2 million  dollars                                                                   
to education.                                                                                                                   
                                                                                                                                
REPRESESNTATIVE   GRETCHEN   GUESS    emphasized   that   the                                                                   
legislation would  provide additional funds; funds  would not                                                                   
be shifted from one district to another.                                                                                        
                                                                                                                                
Co-Chair Williams  observed that the  sunset would be  in the                                                                   
year 2005. He questioned if charters  have to be for 5 years.                                                                   
                                                                                                                                
WESS  KELLER,  STAFF, REPRESENTATIVE  FRED  DYSON,  explained                                                                   
that current contracts  could not exceed 2005.  New contracts                                                                   
would not exceed the sunset date.                                                                                               
                                                                                                                                
Vice-Chair  Bunde  asked  if  the  money  would  only  go  to                                                                   
districts that have charter schools.                                                                                            
                                                                                                                                
Representative  Guess replied  that the  fiscal note  has two                                                                   
parts:  the startup  grant  and a  change  to the  foundation                                                                   
formula. The  funds would go  to the school district.  School                                                                   
districts without a charter school would not receive funds.                                                                     
                                                                                                                                
Vice-Chair  Bunde pointed  out that a  school district  would                                                                   
not be  legally bond to provide  the additional funds  to the                                                                   
charter school, but acknowledged the moral obligation.                                                                          
                                                                                                                                
Representative  Dyson  maintained  that  the State  Board  of                                                                   
Education and  Department of Education and  Early Development                                                                   
would  track  the funding.  Vice-Chair  Bunde  observed  that                                                                   
accountability   would   come    through   parent   feedback.                                                                   
Representative Dyson  acknowledged that there  is no specific                                                                   
report   to   the   legislature,    but   emphasized   parent                                                                   
involvement.                                                                                                                    
                                                                                                                                
Representative  John  Davies  asked what  the  fiscal  impact                                                                   
would  be if  the  number for  full funding  eligibility  was                                                                   
dropped  from  150  to  100  students.  Representative  Dyson                                                                   
understood  that  there would  be  three more  schools  added                                                                   
under  the change  to 150  students. He  estimated that  this                                                                   
would be  increased by a multiple  of 2 or  3. Representative                                                                   
Guess interjected  that it would result in a  decrease in the                                                                   
foundation formula.                                                                                                             
                                                                                                                                
Representative  John Davies assumed  that if the  fiscal note                                                                   
were approved,  there would not  be an objection  to lowering                                                                   
the number.  Representative  Dyson stated  that he would  not                                                                   
object if the  charter school legislation were  not adversely                                                                   
affected.                                                                                                                       
                                                                                                                                
Representative  Lancaster  asked  if  there were  a  need  to                                                                   
double the  number of charter  schools to 60.  Representative                                                                   
Dyson  maintained that  the change  is  needed. He  estimated                                                                   
that there  would be 45 or 50  schools in the next  two years                                                                   
if  the   legislation  is  passed.   He  observed   that  the                                                                   
University of Alaska would like  to start three schools to be                                                                   
used  as  laboratory   schools.  He  reviewed   a  number  of                                                                   
proposals with  different emphasis  such as preserving  local                                                                   
languages and addressing deaf students.                                                                                         
                                                                                                                                
Representative Hudson  referenced correspondence  schools. He                                                                   
asked  if   the  legislation   would  affect   correspondence                                                                   
schools. Representative  Dyson stated  that there  is concern                                                                   
that students not "double dip".                                                                                                 
                                                                                                                                
Co-Chair  Mulder referenced  SB 36  and noted  that the  hard                                                                   
count  provides a  name with a  number, which  makes it  more                                                                   
difficult to cheat.                                                                                                             
                                                                                                                                
Co-Chair Williams observed that  charter schools have closed.                                                                   
Representative  Dyson noted that  his daughter worked  in the                                                                   
Anchorage   charter  school,   which   recently  closed.   He                                                                   
maintained that the school would  have been successful with a                                                                   
lower student count. Funding killed the school.                                                                                 
                                                                                                                                
BRUCE JOHNSON,  DEPUTY COMMISSIONER, DEPARTMENT  OF EDUCATION                                                                   
AND  EARLY   DEVELOPMENT,  observed  that  the   State  Board                                                                   
supports the mission  of charter schools in  assisting in the                                                                   
general improvement of education.  The Board supports efforts                                                                   
to  assure  that charter  schools  receive  a fair  share  of                                                                   
funding, including reasonable  startup funding and urges that                                                                   
the  startup funding  be new  money. The  Board supports  the                                                                   
elimination of  geographical restrictions and  the designated                                                                   
number  of charter schools  in urban  communities. The  Board                                                                   
observed  that it  has taken  5  years to  reach the  current                                                                   
number of  17 schools  and does not  believe that  the number                                                                   
needs to be expanded  at this time. The Board  noted that the                                                                   
number could be expanded at a future time.                                                                                      
                                                                                                                                
Vice-Chair Bunde referred to the fiscal note.                                                                                   
                                                                                                                                
EDDY JEANS,  MANGER, SCHOOL  FINANCE AND FACILITIES  SECTION,                                                                   
DEPARTMENT OF EDUCATION AND EARLY  DEVELOPMENT, affirmed that                                                                   
funding  would  go  directly to  the  school  district.  Each                                                                   
charter  school   negotiates  a  contract  with   the  school                                                                   
district   for  administrative   overhead.   The   Department                                                                   
calculates basic  need for each  charter school based  on the                                                                   
number students.                                                                                                                
                                                                                                                                
Vice-Chair Bunde  clarified that a school district  without a                                                                   
charter   school  would   not   receive   funding  from   the                                                                   
legislation.                                                                                                                    
                                                                                                                                
Representative  John  Davies  agreed, but  pointed  out  that                                                                   
school districts  would receive the same amount  of funds per                                                                   
student. Mr.  Jeans pointed out  that some of  these students                                                                   
would  be home  schooled  without  a charter  school  option.                                                                   
Home-schooled students  do not generate money  for the school                                                                   
district through  the foundation formula. Funding  depends on                                                                   
school size. If  a student were enrolled in  a charter school                                                                   
the funding  would go to the  district. The district  and the                                                                   
charter school  would negotiate a contract to  distribute the                                                                   
funds. The  statute, as it  is currently written,  allows the                                                                   
school  district to  take indirect  costs for  administrative                                                                   
expenses from  the funding generated  by the charter  school.                                                                   
Through the negotiation  of the contract, the  charter school                                                                   
may elect to give the district  additional money for services                                                                   
such as special education and library services.                                                                                 
                                                                                                                                
Representative  John   Davies  questioned  the   fiscal  cost                                                                   
associated with  a school size  change of 100 students.   Mr.                                                                   
Jeans emphasized  that he could  only make a rough  guess and                                                                   
replied  that  the  cost  for  the  additional  four  schools                                                                   
identified would  be $2 - $2.7 million dollars.  He explained                                                                   
that  the students  are already  in the  charter school,  but                                                                   
because  they are under  the 200-student  threshold  they are                                                                   
being counted  in the largest  school in the  district, which                                                                   
is  the high  school,  which generates  the  least amount  of                                                                   
money. Below 100, the adjustment would be substantial.                                                                          
                                                                                                                                
Representative Hudson asked the  positive and negative impact                                                                   
of the  charter schools. He  observed that the  funding flows                                                                   
to  the school  district.  He asked  if  the school  district                                                                   
would have responsibility  for oversight to make  certain the                                                                   
educational  program  is  qualified   and  performing  as  it                                                                   
should.  Mr. Jeans emphasized  that the  charter schools  are                                                                   
still  public  schools  and school  districts  have  juristic                                                                   
diction over those schools.  He  added that the same students                                                                   
would generate  less money if  they were added to  the larger                                                                   
school where they  receive less per student.  Charter schools                                                                   
can generate  more money  per student if  they meet  the 200-                                                                   
student level.                                                                                                                  
                                                                                                                                
Mr. Johnson stressed  that children are better  educated when                                                                   
their  parents are  involved in  their  education. There  are                                                                   
distinct educational advantages to having a choice.                                                                             
                                                                                                                                
Representative Hudson questioned  if there is any requirement                                                                   
for  additional  parental  economic  involvement  in  charter                                                                   
schools.   Mr. Johnson  emphasized that  charter schools  are                                                                   
still public schools and all students  are entitled to a free                                                                   
public education.  Charter school students are  not currently                                                                   
provided    with    transportation    through    the    state                                                                   
transportation   system.  The   State  Board  believes   that                                                                   
transportation  should  be provided  so  that  the option  is                                                                   
available  to every family  regardless  of their capacity  to                                                                   
get  their  child   to  the  charter  school.   The  lack  of                                                                   
transportation may result in a more select population.                                                                          
                                                                                                                                
In response to  a question by Co-Chair Williams,  Mr. Johnson                                                                   
observed   that   parents   are   choosing   charter   school                                                                   
opportunities for  an entire host of reasons,  such as school                                                                   
size or special needs.  All of  the schools are "starved" for                                                                   
money. He observed that the "dreamers"  that start the school                                                                   
become weary  because they cannot  buy relief from  the seven                                                                   
day a week commitment that they  were willing to make for the                                                                   
first  three years.  As the  founders leave  and others  take                                                                   
over the schools go into crisis  if they do not have adequate                                                                   
financial resources to buy services.                                                                                            
                                                                                                                                
Co-Chair  Williams  noted  the   cost  of  providing  charter                                                                   
schools with  a $500 dollar per  person start up grant.   Mr.                                                                   
Jeans  replied  that  startup  cost  would  be  $1.2  million                                                                   
dollars for one-time  grants. Grants could be  used for rent,                                                                   
books, desks and  other costs.  Mr. Johnson  interjected that                                                                   
some  school districts  can  afford  to assist  with  startup                                                                   
costs  and others  cannot. The  intent is  to assist  schools                                                                   
with  basic needs.  Mr.  Jeans  clarified that  every  school                                                                   
would be  entitled to the  one-time startup funds,  including                                                                   
those that are currently operating.                                                                                             
                                                                                                                                
DEBBIE OSSINANDER,  ANCHORAGE SCHOOL BOARD,  ANCHORAGE, spoke                                                                   
in support for the proposed legislation.  Charter schools are                                                                   
an  important new  direction that  allows  greater choice  to                                                                   
families and helps facilitate  parent directed education. She                                                                   
noted that charter  schools have many challenges.  She stated                                                                   
that the  bill would  bring greater  flexibility for  housing                                                                   
children. She  stressed the challenges in  providing starting                                                                   
up costs. She  noted that it is the Anchorage  School Board's                                                                   
intent to financially support charter schools.                                                                                  
                                                                                                                                
DARROLL HARGRAVES,  ALASKA COUNCIL OF SCHOOL  ADMINISTRATORS,                                                                   
testified that  superintendents do not  oppose the bill.   He                                                                   
spoke in  support of the  extension to 60 schools  statewide.                                                                   
Charter schools would be subject  to the same competency test                                                                   
as the  rest of  the public  school system.  He testified  in                                                                   
support of the charter extension  and noted that the original                                                                   
five-year  deadline was  about up. The  five-year sunset  was                                                                   
originally put in place to judge  the success of the schools.                                                                   
                                                                                                                                
LARRY SEMMENS,  AURORA BOREALIS  SCHOOL, KENAI testified  via                                                                   
teleconference in  support of the legislation.  He noted that                                                                   
their students perform well on  tests. There is a 200-student                                                                   
waiting list. The  school plan is to expand  to 200-students,                                                                   
but classroom  space is not  immediately available.  He noted                                                                   
support for the  contract term extension, elimination  of the                                                                   
sunset  date and  additional funding  per  student. He  spoke                                                                   
against the penalty for schools  under 200 students. The 200-                                                                   
student penalty adversely affects  district funding; it costs                                                                   
the  Kenai Peninsula  Borough  School District  up to  $7,000                                                                   
dollars  a student.  He  maintained that  parent  involvement                                                                   
results in success in education  and that charter schools can                                                                   
make a difference for education in Alaska.                                                                                      
                                                                                                                                
Representative  Lancaster referred  to pupil  transportation.                                                                   
Mr.  Semmens noted  that  parents transport  their  students,                                                                   
some at great distances.                                                                                                        
                                                                                                                                
HB  101  was   heard  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
HOUSE BILL NO. 203                                                                                                            
                                                                                                                                
     "An Act making an appropriation to the Legislative                                                                         
     Council for a study of school district cost factors;                                                                       
     and providing for an effective date."                                                                                      
                                                                                                                                
REPRESENTATIVE PEGGY WILSON, SPONSOR  testified in support of                                                                   
the  legislation. She  explained  that the  legislation  sets                                                                   
aside $350.0 thousand dollars  for a class differential study                                                                   
on school  district cost factors.  The state of Alaska  has a                                                                   
constitutional  obligation to  provide for  a full  education                                                                   
for all students.                                                                                                               
                                                                                                                                
TAPE CHANGE, HFC 01 - 79, SIDE B                                                                                              
                                                                                                                                
Representative  Wilson observed that  the economic  status of                                                                   
different areas of the state have  changed since 1986. School                                                                   
district  cost  factors  were   last  changed  in  1986.  She                                                                   
maintained that the current formula,  while well intentioned,                                                                   
has  unintentional   consequences.  A  design   error,  which                                                                   
tracked  expenses  as  opposed   to  actual  costs  of  doing                                                                   
business  in each  school district,  has  resulted in  flawed                                                                   
district   cost  factors.   Failure   to  precisely   measure                                                                   
differential   costs  across  the   state  has  resulted   in                                                                   
inequitable funding.                                                                                                            
                                                                                                                                
Representative  Wilson  noted   that  many  questions  remain                                                                   
unanswered  such  as:  What  is  the  cost  of  providing  an                                                                   
education in each school district  as it relates to Anchorage                                                                   
as  a   base?  What  are   the  exact  costs   of  electronic                                                                   
communications in Yakutat? What  is the specific cost of fuel                                                                   
in Dillingham? What are the property  insurance rates in Tok?                                                                   
What does  it cost  to get  a school  fire code inspector  to                                                                   
Angoon?                                                                                                                         
                                                                                                                                
Representative  Wilson maintained that  HB 203 would  provide                                                                   
factual  answers  to  these questions.  HB  203  proposes  an                                                                   
independent study of school cost  differentials. She stressed                                                                   
the need to assess actual costs in each school district.                                                                        
                                                                                                                                
Vice-Chair  Bunde  expressed   support  for  the  study,  but                                                                   
questioned  the   difference  between  the  costs   of  doing                                                                   
business and the cost of providing education.                                                                                   
                                                                                                                                
Representative Wilson  noted that the cost of  doing business                                                                   
differs from school district to  school district depending on                                                                   
the access to services.                                                                                                         
                                                                                                                                
Vice-Chair Bunde  suggested that section 1 be  changed to the                                                                   
"cost of providing  an education in each school  district" as                                                                   
opposed to the "cost of doing business."                                                                                        
                                                                                                                                
Representative Wilson suggested  the addition of "it shall be                                                                   
completed by  contract" on page 2,  line 5. She did  not want                                                                   
the  study to  be left  to the  Department  of Education  and                                                                   
Early Development or a committee.                                                                                               
                                                                                                                                
Representative  John  Davies suggested  the  substitution  of                                                                   
"operating a school" for "doing  business" on lines 9 and 12.                                                                   
Representative Wilson did not object to the recommendation.                                                                     
                                                                                                                                
Representative  Davies MOVED to  insert "operating  a school"                                                                   
and delete "doing business" on lines 9 and 12.                                                                                  
                                                                                                                                
Representative  Croft  argued   in  support  of  the  use  of                                                                   
"providing  an education". He  pointed out  that it  would be                                                                   
possible  to operate  a school  without doing  a good job  of                                                                   
providing education.  He added that it would  be necessary to                                                                   
operate a school in order to provide education.                                                                                 
                                                                                                                                
Representative  John  Davies  pointed out  that  operating  a                                                                   
school includes hiring faculty.                                                                                                 
                                                                                                                                
Vice-Chair   Bunde  summarized   that   the   intent  is   to                                                                   
distinguish between  the cost of  running a business  and the                                                                   
cost  of  education.   Co-Chair  Williams  agreed   that  the                                                                   
question is the actual cost of the school.                                                                                      
                                                                                                                                
Representative  Whitaker  questioned  if  the  intent  is  to                                                                   
distinguish  the  cost of  operating  a  school in  terms  of                                                                   
maintenance and  operation of a  school facility or  the cost                                                                   
of providing an education. He  emphasized that that intent is                                                                   
to  determine   the  cost  of  providing  an   education.  He                                                                   
suggested that "operating a school" may be too restrictive.                                                                     
                                                                                                                                
Representative  Davies MOVED to  AMEND Amendment 1  to insert                                                                   
"providing  an education"  on  line 9.  "Operating a  school"                                                                   
would be retained  on line 12 and insert "actual"  at the end                                                                   
of  line 11.  There  being  NO  OBJECTION, the  amendment  to                                                                   
Amendment 1 was adopted:                                                                                                        
                                                                                                                                
     The study                                                                                                                  
     (1)  should be based on the cost of providing an                                                                         
     education in each school district;                                                                                       
     (2)  should  consider the cost of living,  including the                                                                   
     cost  of   food,  housing,  utilities,   transportation,                                                                   
     medical expenses,  property values, or other  costs that                                                                   
     contribute to the actual cost of operating a school.                                                                   
                                                                                                                                
There  being NO  OBJECTION,  Amendment 1  as  was adopted  as                                                                   
amended.                                                                                                                        
                                                                                                                                
Representative Croft  MOVED to ADOPT Amendment 2:  On page 2,                                                                   
line 3 insert "shall"  and delete "may"; and on  page 1, line                                                                   
5 delete "prepare or." He explained  that the amendment would                                                                   
take out  the option of doing  the study by any  manner other                                                                   
than a contract.                                                                                                                
                                                                                                                                
Representative Wilson  questioned if the date  should also be                                                                   
changed to  allow more  time for the  study to be  completed.                                                                   
Representative  Hudson  argued in  support  of retaining  the                                                                   
date and  pointed out  that the following  year would  be the                                                                   
second year of the legislature.                                                                                                 
                                                                                                                                
Vice-Chair  Bunde  agreed  with  the  intent  of  having  the                                                                   
Legislative Council  contract for  the study. He  pointed out                                                                   
that there may be some expense  involved to assure that there                                                                   
are appropriate guidelines for a contract.                                                                                      
                                                                                                                                
Representative  John  Davies  MOVED  to  AMEND  Amendment  2:                                                                   
delete "or"  and insert  "and" (to  prepare and contract  for                                                                 
the preparation  of a study).  There being NO  OBJECTION, the                                                                   
amendment was  adopted.  There being NO  OBJECTION, Amendment                                                                   
2 was adopted as amended.                                                                                                       
                                                                                                                                
Representative  Whitaker questioned  if the  review would  be                                                                   
done on a  periodic and regular basis.  Representative Wilson                                                                   
observed that SB 36 required a two-year review.                                                                                 
                                                                                                                                
Representative  Wilson referred  to a  study by the  McDowell                                                                   
Group,  which was  compiled  in relationship  to  SB 36.  The                                                                   
study recommended  that the current district  cost factors be                                                                   
maintained  and that  the department's  effort  be placed  in                                                                   
reexamining the  methodology. She emphasized that  the intent                                                                   
of HB 203 is  to make sure that the guidelines  are different                                                                   
and the  actual cost to educate  a child in each  district is                                                                   
ascertained,  so that  the differences  can be reviewed.  She                                                                   
added that the Department of Education  and Early Development                                                                   
and  the  Education's  Foundation Task  Force  recommended  a                                                                   
similar study.                                                                                                                  
                                                                                                                                
Representative  John Davies  expressed  concern  with page  1                                                                   
line  6.  He   MOVED  to  ADOPT  Amendment   3:  delete  "the                                                                   
preparation of a  study of the district cost  factors used as                                                                   
a component" and insert "preparation  of a study recommending                                                                   
district cost factors to be used  as a component". The change                                                                   
would  clarify  that  the  intent  is not  just  a  study  of                                                                   
existing factors,  but that  there should be  recommendations                                                                   
for how it should be fixed. There  being NO OBJECTION, it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
PAT HICKEY, KENAI PENINSULA SCHOOL  DISTRICT, KENAI testified                                                                   
via  teleconference.  He  noted   that  the  Kenai  Peninsula                                                                   
Borough  contains urban  and rural areas.  He encouraged  the                                                                   
contractors  to take  into full  account  the differences  by                                                                   
attendance  areas and  not just  consider the  district as  a                                                                   
whole. He  noted that the cost  of providing an  education in                                                                   
some small communities  have already been compensated  for by                                                                   
economy of scale factors by size,  but tend to be diffused by                                                                   
a district wide application of an area cost factor.                                                                             
                                                                                                                                
DARROLL  HARGRAVES,  EXECUTIVE  DIRECTOR, ALASKA  COUNCIL  OF                                                                   
SCHOOL ADMINISTRATORS testified  via teleconference. He spoke                                                                   
in  support of  the  legislation. He  pointed  out that  cost                                                                   
differential  studies have  been done  in a  true attempt  to                                                                   
determine   the  cost   of   doing  business   in   different                                                                   
geographical  areas  of  the  state.  The  audits  of  school                                                                   
districts were  used in SB  36 in an  attempt to  assess what                                                                   
school districts were actually  spending. He pointed out that                                                                   
a  school  district,  which held  tough  on  salaries  though                                                                   
negotiation  would be disadvantaged.  The cost  differentials                                                                   
were based  on what  "is" not  on the  "true" costs  of doing                                                                   
business.  He  recounted  a  gift  from  an  oil  company  of                                                                   
computers. He  tried to ship  the computers to  one community                                                                   
and found that  they could only be shipped  strapped into the                                                                   
passenger seats at  the full price of a  passenger transport.                                                                   
Another school district was able  to pick up the computers at                                                                   
no cost.  He concluded  that there  are true  costs of  doing                                                                   
business from  one community to  another. He emphasized  that                                                                   
the   cost  differentials   must  reflect   true  costs.   He                                                                   
maintained that cost differentials in SB 36 were in error.                                                                      
                                                                                                                                
EDDY JEANS,  MANGER, SCHOOL  FINANCE AND FACILITIES  SECTION,                                                                   
DEPARTMENT  OF  EDUCATION  AND  EARLY  DEVELOPMENT  spoke  in                                                                   
support of the  legislation. The department would  like to be                                                                   
involved in  the development  of the RFP  to assure  that all                                                                   
the  cost   factors  are  looked   at  and  considered.   The                                                                   
department  would  also like  to  assure that  a  methodology                                                                   
results in  a tool that  can be used  on an ongoing  basis to                                                                   
update  the cost differentials  as required  by statute.  The                                                                   
Department  of  Education  and   Early  Development  was  not                                                                   
involved in  the last selection.  The Legislative  Budget and                                                                   
Audit Committee contracted the last selection.                                                                                  
                                                                                                                                
Representative  Hudson  noted  that  nothing  would  preclude                                                                   
consultation  with  the  Department of  Education  and  Early                                                                   
Development on the  RFP. He did not think  that (consultation                                                                   
with  the department)  needed to  be in  the legislation  but                                                                   
expressed  a  desire  that the  contractor  confer  with  the                                                                   
department  in determining  what elements  should be  brought                                                                   
forward in the contract.                                                                                                        
                                                                                                                                
Representative   Croft  observed   that  the  Department   of                                                                   
Education and  Early Development was not consulted  last time                                                                   
and  pointed out  that serious  mistakes were  made. He  felt                                                                   
that it should be in the intent language.                                                                                       
                                                                                                                                
Representative  Whitaker  maintained that  the  intent is  to                                                                   
strike a balance  and determine a basis for  the equitability                                                                   
of  the  formula.  If  the  project   becomes  too  vast  and                                                                   
"potentially  politically  involved"   then  it  would  be  a                                                                   
disservice. He  added that it  would also be a  disservice if                                                                   
the study does  not provide for input that  is meaningful. He                                                                   
suggested that the intent should be carefully worded.                                                                           
                                                                                                                                
Representative Hudson  MOVED to ADOPT Amendment 4:  add a new                                                                   
subsection:   (6)  Shall  confer   with  the  Department   of                                                                   
Education  and Early Development  in preparation  of  the RFP                                                                   
for this study.                                                                                                                 
                                                                                                                                
Representative Guess pointed out  that a new subsection would                                                                   
refer  back to  the study.  She suggested  that the  language                                                                   
would be in the wrong place.                                                                                                    
                                                                                                                                
Representative   John  Davies   suggested  an  amendment   to                                                                   
Amendment 4,  to add the language  on page 1, line  5: insert                                                                   
after  "Council"  "in  consultation with  the  Department  of                                                                   
Education and Early Development".                                                                                               
                                                                                                                                
Representative  Hudson WITHDREW  Amendment 4.  Representative                                                                   
Davies MOVED to ADOPT amended  Amendment 4, by Representative                                                                   
Hudson:  insert after  "Council"  "in consultation  with  the                                                                   
Department of  Education and Early Development".  There being                                                                   
NO OBJECTION, it was so ordered.                                                                                                
                                                                                                                                
Representative  Guess  noted   that  five  states  have  cost                                                                   
differentials,  each with different  methodologies.  There is                                                                   
no agreement on the best way to  determine an education price                                                                   
index. New research shows that  an expenditure-based model is                                                                   
the worst  way. She  discouraged the  use of an  expenditure-                                                                   
based model. She acknowledged  the difficulty of producing an                                                                   
unbiased model but emphasized  the creation of a clear model.                                                                   
She  spoke  in  support  of  a   cost  differential  that  is                                                                   
updateable with data outside of the department.                                                                                 
                                                                                                                                
Representative  Hudson  MOVED to  report  CSHB  (FIN) out  of                                                                   
Committee.                                                                                                                      
                                                                                                                                
CSHB  203 (FIN)  was REPORTED  out  of Committee  with a  "do                                                                   
pass" recommendation.                                                                                                           
#hb193                                                                                                                        
HOUSE BILL NO. 193                                                                                                            
                                                                                                                                
     "An Act relating to the primary election; and providing                                                                    
     for an effective date."                                                                                                    
                                                                                                                                
AVRUM GROSS,  JUNEAU, stated that he  was a member of  a task                                                                   
force appointed  by the  Lieutenant Governor  to address  the                                                                   
fact that the  state's primary election law  ceased to exist,                                                                   
after  the last  primary, due  to  a decision  of the  United                                                                   
States Supreme  Court (California  Democratic Pary et  al. v.                                                                   
Jones, Secretary of  State et. Al.. (530 U.S.  567, 2000). He                                                                   
added  that emergency  regulations,  which  responded to  the                                                                   
decision, expired.                                                                                                              
                                                                                                                                
Mr. Gross explained  that the Court ruled that,  while states                                                                   
with blanket primaries could continue,  political parties had                                                                   
the right to change the rules  to limit participation. Alaska                                                                   
has operated  under blanket primary  law. The task  force was                                                                   
established to deal  with the fact that parties  have to have                                                                   
input into  who would participate  in the selection  of their                                                                   
candidates.  He reviewed  the makeup  of the  task force  and                                                                   
concluded that it was nonpartisan.                                                                                              
                                                                                                                                
The  Task  Force's intent  was  to  make the  minimal  change                                                                   
necessary to  existing law. Public  testimony was  taken from                                                                   
all parties and the Department  of Law. The recommendation of                                                                   
the Task Force  was that all voters  be allowed to  vote in a                                                                   
party's  primary unless  the  party notified  the  lieutenant                                                                   
governor, by September  1, that the primary  would be closed.                                                                   
To  the extent  that  party registration  was  an issue,  the                                                                   
registration would have to be  established 30 days before the                                                                   
election, which  is the deadline  for voter registration.  He                                                                   
indicated that  the proposal received support  from the major                                                                   
parties.  A  blanket  primary   was  chosen  because  it  was                                                                   
traditional in Alaska  and it would allow the  maximum number                                                                   
of  people to  participate in  the primary.  The state  would                                                                   
stand for  maximum participation  subject to a  party's right                                                                   
to  close.  The original  bill  [based  on the  Task  Force's                                                                   
recommendations]  was  changed  in the  House  State  Affairs                                                                   
Committee  and the process  reversed.  Under the House  State                                                                   
Affairs  version,   all  primaries  would  be   closed  (only                                                                   
Republicans  could  vote  in republican  primaries  and  only                                                                   
Democrats could  vote in  democratic primaries) unless  their                                                                   
party opened the primary.                                                                                                       
                                                                                                                                
The   House   Judiciary   Committee   further   amended   the                                                                   
legislation to state  that independents could also  vote in a                                                                   
party's primary.                                                                                                                
                                                                                                                                
Representative  John Davies  observed that  the HJUD  version                                                                   
partially opened  the primary  and questioned if  a political                                                                   
party  could chose  to  close  their primary  to  independent                                                                   
voters.  Mr.  Gross  affirmed  that they  could  close  their                                                                   
primary to independents. He summarized  that the HJUD version                                                                   
allows parties to  close or open their primaries  as they see                                                                   
fit. The original  bill opened primaries and  required action                                                                   
by a party to close them.                                                                                                       
                                                                                                                                
In response  to a question  by Representative  Lancaster, Mr.                                                                   
Gross  clarified that  once  a change  occurs  it remains  in                                                                   
force  until the  party  changes it.  Changes  must occur  by                                                                   
September of  the proceeding year.   This provision  was also                                                                   
contained in the original task force bill.                                                                                      
                                                                                                                                
TAPE CHANGE, HFC 01 - 80, SIDE A                                                                                              
                                                                                                                                
In  response to  a  question  by Representative  Hudson,  Mr.                                                                   
Gross clarified that  a [candidate] could not  chose to allow                                                                   
all voters if their party restricted the ballot.                                                                                
                                                                                                                                
Mr. Gross  observed that the more  a primary is  narrowed the                                                                   
"purer" the  candidates become,  but emphasized that  "at the                                                                   
same  time  the  less  chance  they have  to  win  a  general                                                                   
election because they don't have  support from a large number                                                                   
of people."                                                                                                                     
                                                                                                                                
Representative  Whitaker  clarified  that  a  party's  ballot                                                                   
would be  open to  nonpartisan and  undeclared voters  unless                                                                   
the party  closes it. Mr.  Gross agreed and interjected  that                                                                   
it would not be open to any other registered party members.                                                                     
                                                                                                                                
Co-Chair  Mulder  noted  that  the  Court  decision  requires                                                                   
action by the Legislature.                                                                                                      
                                                                                                                                
Representative John  Davies observed that Court's  action was                                                                   
in  response to  requests by  the  Republican and  Democratic                                                                   
parties in Alaska  and other states. Mr. Gross  observed that                                                                   
an initiative  in California  began the [court's  involvement                                                                   
in] blanket primary law.                                                                                                        
                                                                                                                                
SARAH  FELIX,  DEPUTY  ATTORNEY GENERAL,  DEPARTMENT  OF  LAW                                                                   
provided information  on the legislation. She  explained that                                                                   
a question arose during deliberations  in the House Judiciary                                                                   
Committee  regarding   "no  party"  petition   candidates  on                                                                   
primary  election ballots.  Under  current law,  unaffiliated                                                                   
candidates overlooked must appear  on the primary ballot. The                                                                   
House Judiciary Committee decided  that they would not appear                                                                   
on  the  primary  election  ballot.  Unaffiliated  candidates                                                                   
would only appear  on the general election ballot.  She noted                                                                   
that an  amendment to AS  15,25,150, the filing  deadline, is                                                                   
needed.  The filing  deadline  was  left at  June  1. If  "no                                                                   
party" candidates  do not  appear on  the primary ballot  the                                                                   
deadline would not  be June 1. The filing deadline  should be                                                                   
the  date  of  the  primary  election.  Legal  opinions  have                                                                   
indicated  that "no  party"  candidates could  be  held to  a                                                                   
earlier filing date.                                                                                                            
                                                                                                                                
Co-Chair  Mulder   stated  his  intention  to   entertain  an                                                                   
amendment to address the issue.                                                                                                 
                                                                                                                                
Ms.  Felix explained  that "no  party"  candidates are  those                                                                   
that do not belong to a recognized  political party. Some may                                                                   
belong  to a  political group,  which is  an organization  of                                                                   
people of a  political affiliation that has  not achieved the                                                                   
status of  a recognized political  party and some may  not be                                                                   
representing any  group. Alaska has six  recognized political                                                                   
parties. Discussion  ensued regarding  the qualifications  of                                                                   
recognized parties.                                                                                                             
                                                                                                                                
Co-Chair   Mulder   observed   that   under   the   amendment                                                                   
certification would be required  by the primary election date                                                                   
in order to be eligible for the November election.                                                                              
                                                                                                                                
Representative  John  Davies  MOVED  to  ADOPT  a  conceptual                                                                   
amendment to move  the date in AS 15.25.150  to be consistent                                                                   
with  the primary  election date  for filing  for "no  party"                                                                   
candidates. There being NO OBJECTION, it was so ordered.                                                                        
                                                                                                                                
HB  193  was   heard  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
CS FOR SENATE BILL NO. 103(FIN)                                                                                               
                                                                                                                                
     "An Act  relating to election campaigns  and legislative                                                                   
     ethics."                                                                                                                   
                                                                                                                                
JOE BALASH,  STAFF, SENATE STATE AFFAIRS  COMMITTEE testified                                                                   
in support of  the legislation. He observed  that Senate Bill                                                                   
103  is largely  a  clean-up bill  to  address conflicts  and                                                                   
concerns  that  have  arisen  in  the  campaign  finance  and                                                                   
legislative   ethics    statutes.   It   also    incorporates                                                                   
administrative  rulings  made by  the Alaska  Public  Offices                                                                   
Commission   (APOC)  and   informal  advice   given  by   the                                                                   
Legislative Ethics  Committee. He noted that  the legislation                                                                   
includes provisions to:                                                                                                         
                                                                                                                                
     Require a single form for public disclosures.                                                                              
                                                                                                                                
     Treat multiple  groups controlled by a  single candidate                                                                   
     as  a single  group  for  purposes of  the  contribution                                                                   
     limit.                                                                                                                     
                                                                                                                                
     Eliminate  the  public  office   expense  term  accounts                                                                   
     (POET)  reserve mechanism,  so  that there  is a  single                                                                   
     POET account for legislators  and successful candidates.                                                                   
                                                                                                                                
     Expand  the  amount of  personal  property  that can  be                                                                   
     carried  forward  after   an  election  and  to  include                                                                   
     photographs and seasonal greeting cards.                                                                                   
                                                                                                                                
    Define contributions to exclude certain services such                                                                       
     as attorney  and accounting  services, mass  mailings by                                                                   
     parties and newsletters to constituents.                                                                                   
                                                                                                                                
Mr. Balash added that changes  were made to the use of public                                                                   
assets and resources  for non-legislative purposes,  such as:                                                                   
preparing  seasonal  greeting cards,  transporting  personnel                                                                   
computers,  photographs,   solicitation  and   acceptance  of                                                                   
donations for  non political charities, writing  newsletters,                                                                   
use  of offices  before and  after  session. The  legislation                                                                   
also clarifies  the prohibition on  the use of  public assets                                                                   
and resources  by legislators  and legislative employees  for                                                                   
nonlegislative  purposes  and certain  previously  prohibited                                                                   
public political uses. The legislation  allows legislators to                                                                   
give  and  receive  the  gift   of  transportation  from  one                                                                   
another.                                                                                                                        
                                                                                                                                
Co-Chair Mulder  observed that there  is a focus  on advocacy                                                                   
for constitutional amendments.  He maintained that the people                                                                   
who are the most knowledgeable  [legislators] could dissemble                                                                   
information  but would  not be  able to use  their office  to                                                                   
solicit funds.  Mr. Balash clarified  that they would  not be                                                                   
able  to use  their  office  to  solicit or  accept  campaign                                                                   
contributions, use their phones  to call up potential donors,                                                                   
or use  staff to  send out [campaign  or election]  mailings.                                                                   
They could  prepare speeches  and ask  groups to support  the                                                                   
amendment along with them.                                                                                                      
                                                                                                                                
Co-Chair Mulder clarified that  legislators could ask support                                                                   
for constitutional  amendments.  The legislation only  limits                                                                   
the use  of their staff and  office [to elicit support  for a                                                                   
constitutional amendment].                                                                                                      
                                                                                                                                
Representative  John  Davies  referred  to the  POET  Reserve                                                                   
Account. Mr. Balash  noted that the POET Reserve  Account was                                                                   
created in response  to concerns regarding  tax implications.                                                                   
He  noted  that  with  the  limitations   [contained  in  the                                                                   
legislation]  the  POET  Account  is  considered  a  business                                                                   
expense,  just  like  any other  business  expense,  for  tax                                                                   
purposes.  If  the  full  amount in  the  POET  Account  were                                                                   
carried forward it would not count  against the legislator on                                                                   
their  personal  income tax.  The  POET Reserve  Account  was                                                                   
removed since there is no threat of taxation.                                                                                   
                                                                                                                                
Representative John  Davies questioned if tax  status changes                                                                   
are being made.  Mr. Balash explained that there  was never a                                                                   
tax liability on the money. Representative  John Davies noted                                                                   
that the  APOC had  advised legislators  that there  were tax                                                                   
implications.                                                                                                                   
                                                                                                                                
Mr. Balash  noted that changes  to the existing  POET Account                                                                   
limitations  were made on  page 4,  lines 24  - 27. The  POET                                                                   
Reserve Account was appealed on page 12, line 24.                                                                               
                                                                                                                                
Representative   Davies   referred  to   page   7  line   10:                                                                   
communication in  form of a  newsletter. He observed  that he                                                                   
does  not send  newsletters in  an election  year later  than                                                                   
early  July.  He  expressed concern  with  the  allowance  of                                                                   
newsletters in an election year  and felt that it would allow                                                                   
abuse. He recommended limiting  the time that newsletters are                                                                   
allowed when a  legislator is up for election  and questioned                                                                   
if  the sponsor  would  support  a  July 15th  deadline.  Mr.                                                                   
Balash observed that many state  issues come to the forefront                                                                   
of voters' minds  in the months preceding an  election, which                                                                   
are not present at other times.                                                                                                 
                                                                                                                                
Co-Chair  Mulder   summarized  that   a  newsletter   from  a                                                                   
legislator   to   their   constituents   would   not   be   a                                                                   
contribution.                                                                                                                   
                                                                                                                                
Representative   John   Davies   felt   that  it   would   be                                                                   
inappropriate  to use  office  accounts  to send  newsletters                                                                   
close to an  election. He maintained that any  time a picture                                                                   
is sent  it is a  campaign device.  He acknowledged  that the                                                                   
legislation  might not  be the appropriate  place to  address                                                                   
his  concerns.  He  suggested  that July  15,  would  be  the                                                                   
appropriate cutoff date.                                                                                                        
                                                                                                                                
Co-Chair  Mulder stated  that he  did not  disagree with  the                                                                   
point made by Representative Davies.                                                                                            
                                                                                                                                
Representative   Davies  suggested   that   there  could   be                                                                   
confusion relating  to a newsletter as a contribution  to the                                                                   
campaign.  He  added that  there  would be  ethics  questions                                                                   
regarding  campaign related  use  of the  office account.  He                                                                   
felt  that the  issue should  be  clarified. Co-Chair  Mulder                                                                   
suggested that Representative Davies work on an amendment.                                                                      
                                                                                                                                
Representative John Davies provided  members with Amendment 1                                                                   
(copy   on  file).   Amendment  1   would  address   campaign                                                                   
contribution reports  and allow the campaign  to file reports                                                                   
on behalf  of the contributor.  The contributor  would retain                                                                   
responsibility to assure that  the report has been filed. The                                                                   
filing would follow the same time  lines. Co-Chair Mulder did                                                                   
not object to the amendment.                                                                                                    
                                                                                                                                
Representative Hudson agreed and  pointed out that the intent                                                                   
is disclosure.                                                                                                                  
                                                                                                                                
Co-Chair Mulder  agreed and noted that contributors  could be                                                                   
informed  that the  report  was filed  on  their behalf  when                                                                   
legislators send their thank you notes.                                                                                         
                                                                                                                                
BROOK  MILES,  EXECUTIVE  DIRECTOR,  ALASKA  PUBLIC  OFFICERS                                                                   
COMMISSION  testified  via  teleconference.  She  noted  that                                                                   
while  many  of  the  provisions  of SB  103  can  fairly  be                                                                   
considered,  "clean-up"  other sections  do  not fall  within                                                                   
that description, but rather constitute  a significant change                                                                   
to the campaign disclosure law.                                                                                                 
                                                                                                                                
Ms.   Miles   identified   areas    that   will   result   in                                                                   
administrative  costs,   loss  of  public   information,  and                                                                   
confusion to both filers and members of the public.                                                                             
                                                                                                                                
Section 1 contains a legislative  mandate that the Commission                                                                   
develop only  one form  to be  used for financial  disclosure                                                                   
filing. Ms.  Miles noted that  AS 24.60 requires  Legislative                                                                   
Financial Disclosure statements  from all 60 legislators, the                                                                   
5  public members  of the  legislative  ethics committee  and                                                                   
three  legislative   directors;  AS  39.50   requires  Public                                                                   
Official   Financial  Disclosure   reports  from  over   2000                                                                   
executive branch and municipal  officials, and candidates for                                                                   
state and municipal office.                                                                                                     
                                                                                                                                
Ms.  Miles  observed  that these  statutes  are  not  exactly                                                                   
alike. They  differ in three  significant ways.   Legislators                                                                   
are  required  to  disclose dollar  amounts  for  sources  of                                                                   
income  and  loans  that  have   a  substantial  interest  in                                                                   
legislative,  administrative,  or political  action. No  such                                                                   
requirement exists  under AS 39.50.  State  officials are not                                                                   
permitted to  have outside employment  of that  nature. Under                                                                   
AS 39.50,  filers  must report  all gifts of  more than  $250                                                                   
except   gifts   from   family.    Legislators,   legislative                                                                   
directors, and the legislative  ethics committee members file                                                                   
gift disclosure under AS 24.60.                                                                                                 
                                                                                                                                
This  section  mandates  the Commission  to  mix  apples  and                                                                   
oranges  to  provide  one  form to  cover  filing  under  two                                                                   
separate  laws.   The result  of  this mandate  is likely  to                                                                   
cause substantial confusion to  the over 2000 filers under AS                                                                   
39.50.                                                                                                                          
                                                                                                                                
In Section  5 (page 6, line  6) the bill amends  the campaign                                                                   
disclosure law  to conform with  an amendment  to legislative                                                                   
ethics in  section 7  (p. 10, line  31). Ms. Miles  concluded                                                                   
that the effect of this amendment  to the campaign disclosure                                                                   
law will permit legislators and  legislative employees to use                                                                   
public  resources in  campaign  activities to  support of  or                                                                   
oppose    ballot    questions    concerning    constitutional                                                                   
amendments.                                                                                                                     
                                                                                                                                
Under current  law, public officials are  currently permitted                                                                   
to communicate  on ballot  questions when the  communications                                                                   
are  made  in the  usual  and  customary performance  of  the                                                                   
official's duties.  Ms. Miles  explained that this means that                                                                   
a  legislator  has  the  right   to  advocate  for  a  ballot                                                                   
question,  particularly   one  concerning   a  constitutional                                                                   
amendment.  Legislators could  appear before  the chamber  of                                                                   
commerce,  state   their  position   in  mailings   to  their                                                                   
constituents.                                                                                                                   
                                                                                                                                
Ms.  Miles   maintained  that   legislative  use   of  public                                                                   
resources   to  conduct   constitutional   amendment   ballot                                                                   
questions  campaigns is  likely to  attract public  inquiries                                                                   
and   complaints.   Persons   on   the   opposing   side   of                                                                   
constitutional amendment ballot  questions will probably have                                                                   
concerns  regarding this  issue  and may  even pursue  public                                                                   
funds  for equal  treatment. Ms.  Miles stated  that if  this                                                                   
language  [were removed]  from the  campaign disclosure  law,                                                                   
but retained  under the legislative  ethics law, then  "it is                                                                   
our opinion that we would all be on the same page".                                                                             
                                                                                                                                
Ms.  Miles noted  that section  6  (page 7,  line 6)  removes                                                                   
polls that are limited to issues  and do not name a candidate                                                                   
unless  the poll  was designed  primarily to  benefit or  was                                                                   
requested by a  candidate. Campaigns pay for  polls that they                                                                   
issue. If someone  else issues a poll and provides  it to the                                                                   
candidate  in   order  to  influence  the  outcome   of  that                                                                   
candidate  it  would  be  considered   a  contribution.  This                                                                   
provision  will permit currently  prohibited entities  (other                                                                   
than lobbyists)  to provide  polls to individual  candidates.                                                                   
Administrative  costs will result  as the Commission  will be                                                                   
put  in  the  position  of determining  the  source  and  the                                                                   
"intent"  of polls  when members  of the  public or  opposing                                                                   
candidates make inquiries or file complaints.                                                                                   
                                                                                                                                
Ms.  Miles  discussed  section  7 (page  8,  line  1),  which                                                                   
provides  an exemption  from the  definition of  expenditures                                                                   
for "communications  with a value of  $500 or less a  year on                                                                   
any subject  made by  a corporation."  She observed  that the                                                                   
Commission  is  confused  regarding   current  administrative                                                                   
regulation  [AAC 50.25],  which   provides  that a  business,                                                                   
corporation,   trade  association,   labor  union   or  other                                                                   
organization  that are not  organized primarily  to influence                                                                   
elections   may  communicate   directly  with  its   members,                                                                   
employees  or   their  families,  on  any  subject,   if  the                                                                   
communication is of the same format  used by the organization                                                                   
when  communicating on  non-political  subject. She  observed                                                                   
that telephone trees,  newsletters and email may  be used. As                                                                   
long as  the communication does  not solicit contribution  or                                                                   
any action  other than voting  for or against a  candidate or                                                                   
ballot question  it would not  considered to be  regulated by                                                                   
the campaign disclosure  law. The language on  page 8 changes                                                                   
this  provision.   These  communications  would   now  be  an                                                                   
expenditure and would be limited  to $500 dollars a year. She                                                                   
questioned if the intent is to override the regulation.                                                                         
                                                                                                                                
SUZI BARNETT, ADMINISTRATOR, SELECT  COMMITTEE ON LEGISLATIVE                                                                   
ETHICS, ANCHORAGE  testified via teleconference.  She pointed                                                                   
out  that  language regarding  the  issuance  of  newsletters                                                                   
appears on  page 7 and 9.  There are provisions in  the Ethic                                                                   
Code  that reference  campaign  periods.  One  is a  campaign                                                                   
period of 45 days prior to an  election. The other provides a                                                                   
90-day  period  for  mass mailings  from  other  than  office                                                                   
accounts. She explained that the  use of a specific day, such                                                                   
as  July 15  could  be  problematic  when there  are  special                                                                   
elections.  The  Ethic Code  references  the  number of  days                                                                   
prior  to  an  election.  Mass mailings  that  talk  about  a                                                                   
candidate and  use funds other  than office allowances,  such                                                                   
as leadership,  council, finance  funds are restricted  to 90                                                                   
days prior to an election.                                                                                                      
                                                                                                                                
Representative  John  Davies  explained  that  he  wanted  to                                                                   
restrict the use of office accounts  for newsletters prior to                                                                   
an  election  that  a person  running  for  office  would  be                                                                   
standing in without restricting  the use of newsletters prior                                                                   
to a  special election or  a ballot issue.  He felt  that the                                                                   
use  of a  newsletter prior  to special  elections on  issues                                                                   
would be  appropriate as  long as  it is  in the same  format                                                                   
normally  used  to communicate  with  constitutions  and  one                                                                   
outcome was  not advocated over  another. Ms.  Barnett agreed                                                                   
that there would  not be a concern if the legislator  was not                                                                   
a candidate in the election.                                                                                                    
                                                                                                                                
SB  103  was   heard  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 4:25 p.m.                                                                                          

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