Legislature(2019 - 2020)ADAMS ROOM 519

04/08/2019 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 41 SHELLFISH ENHANCE. PROJECTS; HATCHERIES TELECONFERENCED
Heard & Held
-- Public Testimony --
+= HB 106 SCHOOL BOND DEBT REIMBURSEMENT TELECONFERENCED
Moved HB 106 Out of Committee
+ Presentation: Dept. of Education & Early TELECONFERENCED
Development
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 8, 2019                                                                                            
                         1:30 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:30:05 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Wilson  called the House Finance  Committee meeting                                                                    
to order at 1:30 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Tammie Wilson, Co-Chair                                                                                          
Representative Neal Foster, Co-Chair                                                                                            
Representative Jennifer Johnston, Vice-Chair                                                                                    
Representative Ben Carpenter                                                                                                    
Representative Andy Josephson                                                                                                   
Representative Gary Knopp                                                                                                       
Representative Bart LeBon                                                                                                       
Representative Colleen Sullivan-Leonard                                                                                         
Representative Cathy Tilton                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Dan Ortiz, Vice-Chair                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Liz Harpold,  Staff, Representative  Dan Ortiz;  Sam Rabung,                                                                    
Director,  Division of  Commercial Fisheries,  Department of                                                                    
Fish  and Game;  Elizabeth Nudelman,  Audit Supervisor,  Tax                                                                    
Division,    Department   of    Revenue;   Heidi    Teshner,                                                                    
Administrative  Services Director,  Department of  Education                                                                    
and  Early Development,  Office  of  Management and  Budget;                                                                    
Elwin  Blackwell,  School  Finance  Manager,  Department  of                                                                    
Education  and  Early  Development; Tim  Mearig,  Facilities                                                                    
Manager, Department of Education and Early Development.                                                                         
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Representative  Kelly   Merrick;  Timothy   Koeneman,  Self,                                                                    
Petersburg;  Nancy  Hillstrand, Pioneer  Alaskan  Fisheries,                                                                    
Seldovia.                                                                                                                       
                                                                                                                                
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 41     SHELLFISH ENHANCE. PROJECTS; HATCHERIES                                                                               
                                                                                                                                
          HB 41 was HEARD and HELD in committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
HB 106    SCHOOL BOND DEBT REIMBURSEMENT                                                                                        
                                                                                                                                
          HB 106  was REPORTED out  of committee with  a "do                                                                    
          pass" recommendation  and with  a new  zero fiscal                                                                    
          note  by the  Department  of  Education and  Early                                                                    
          Development.                                                                                                          
                                                                                                                                
Co-Chair Wilson reviewed the meeting agenda for the day.                                                                        
                                                                                                                                
HOUSE BILL NO. 41                                                                                                             
                                                                                                                                
     "An Act  relating to management  of enhanced  stocks of                                                                    
     shellfish; authorizing  certain nonprofit organizations                                                                    
     to engage  in shellfish enhancement  projects; relating                                                                    
     to application  fees for  salmon hatchery  permits; and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
1:30:39 PM                                                                                                                    
                                                                                                                                
LIZ  HARPOLD, STAFF,  REPRESENTATIVE  DAN ORTIZ,  introduced                                                                    
herself.                                                                                                                        
                                                                                                                                
SAM  RABUNG,  DIRECTOR,  DIVISION OF  COMMERCIAL  FISHERIES,                                                                    
DEPARTMENT OF FISH AND GAME, introduced himself.                                                                                
                                                                                                                                
Ms. Harpold thanked the committee  for hearing the bill. She                                                                    
explained  that   many  stakeholders  and   participants  in                                                                    
Alaska's  commercial  fishing   industry  came  together  to                                                                    
identify  shellfish  enhancement  restoration  as  something                                                                    
that would,  over time, help  improve the  state's shellfish                                                                    
fisheries and expand the  economic opportunities in Alaska's                                                                    
coastal  communities.   Currently,  large   scale  shellfish                                                                    
enhancement was  not allowed in  Alaska, but HB  41 provided                                                                    
the  regulatory framework  for the  Department  of Fish  and                                                                    
Game (DFG)  to manage shellfish enhancement  and restoration                                                                    
projects.  The  statutes  the   bill  would  implement  were                                                                    
modeled  off of  the current  salmon hatchery  statutes laid                                                                    
out in AS 16.10.                                                                                                                
Ms. Harpold  continued that there  was a  difference between                                                                    
what  was currently  being discussed,  shellfish enhancement                                                                    
restoration, and  aquatic farming. Mariculture  involved all                                                                    
three.  However, with  aquatic farming,  a private  business                                                                    
such as an oyster or  kelp farm, regulations were already in                                                                    
place, and the industry was  already taking off and growing.                                                                    
The bill did not  have to do with those - it  had to do with                                                                    
the public benefit aspects  of mariculture development which                                                                    
were enhancement and restoration.                                                                                               
                                                                                                                                
Ms.  Harpold  expounded  that enhancement  was  intended  to                                                                    
create a  greater abundance of  shellfish for the  public to                                                                    
harvest for those that were  legally able to harvest whether                                                                    
for commercial  fisheries, sport fisheries,  subsistence, or                                                                    
personal use. Restoration also played  a role. It came about                                                                    
when  there  was  a  need  after  a  decline  in  a  certain                                                                    
shellfish stock, such  as crab stock. The  department had to                                                                    
manage them  more conservatively.  She indicated that  HB 41                                                                    
and the  needed regulatory  framework would help  to enhance                                                                    
or restore some of the  depleted stocks. She reported groups                                                                    
around  the state  that could  take small  research projects                                                                    
and spread the  information for the greater  good of Alaska.                                                                    
She reiterated  that HB 41  played an important role  in the                                                                    
development of  mariculture in Alaska by  providing a method                                                                    
to increase  the available harvest  of shellfish  for public                                                                    
use in an environmentally  safe manner and should ultimately                                                                    
improve  Alaska's overall  fishing economy.  She offered  to                                                                    
walk through the sectional analysis.                                                                                            
                                                                                                                                
Co-Chair Wilson responded, "Please do."                                                                                         
                                                                                                                                
1:34:14 PM                                                                                                                    
                                                                                                                                
Ms. Harpold reviewed the sectional analysis:                                                                                    
                                                                                                                                
     Sec.  1:   Provides  the  Alaska  Board   of  Fisheries                                                                    
     authority   to   direct   the  department   to   manage                                                                    
     production of  enhanced shellfish stocks,  beyond brood                                                                    
     stock needs, for cost recovery harvest.                                                                                    
                                                                                                                                
     Sec. 2: Increases the permit application fee for new                                                                       
     private nonprofit salmon hatcheries from $100 to                                                                           
     $1,000.                                                                                                                    
                                                                                                                                
Ms.  Harpold interjected  that the  only statute  change was                                                                    
reflected in Section 3.                                                                                                         
                                                                                                                                
     Sec. 3: Adds a new Chapter 12 to Title 16, "Shellfish                                                                      
     Stock Enhancement Projects."                                                                                               
                                                                                                                                
          AS   16.12.010:   Provides    direction   to   the                                                                    
          commissioner of  the Department  of Fish  and Game                                                                    
          on  issuance  of  permits  for  private  nonprofit                                                                    
          shellfish   fishery   enhancement   projects   and                                                                    
          establishes a $1,000  permit application fee. This                                                                    
          section directs  the commissioner to  consult with                                                                    
          technical  experts in  the  relevant areas  before                                                                    
          permit issuance;                                                                                                      
                                                                                                                                
          AS 16.12.020:  Provides for  a hearing  and public                                                                    
          notification and  input process prior  to issuance                                                                    
          of a permit;                                                                                                          
                                                                                                                                
          AS 16.12.030:  Describes terms and  conditions for                                                                    
          permit  holders to  conduct their  work, including                                                                    
          cost  recovery   fisheries,  harvest,   sale,  and                                                                    
          release    of    enhancement   project    produced                                                                    
          shellfish, and selection of brood stock sources;                                                                      
                                                                                                                                
          AS  16.12.040:  Describes the  revocation  process                                                                    
          should  a permit  holder fail  to comply  with the                                                                    
          terms and conditions of the permit;                                                                                   
                                                                                                                                
          AS  16.12.050: Specifies  that shellfish  produced                                                                    
          under  an  approved   enhancement  project  are  a                                                                    
          common  property  resource,   with  provision  for                                                                    
          special  harvest  areas  by permit  holders.  This                                                                    
          section also  specifies the Board of  Fisheries to                                                                    
          establish regulations relating to this chapter;                                                                       
                                                                                                                                
          AS  16.12.060: Directs  the  department to  advise                                                                    
          and  assist  permit  holders  in  their  planning,                                                                    
          operations,  and construction  of facilities  to a                                                                    
          reasonable and appropriate extent;                                                                                    
                                                                                                                                
          AS  16.12.070:  provides department  authority  to                                                                    
          approve source  and number of shellfish  taken for                                                                    
          use as broodstock.                                                                                                    
                                                                                                                                
          AS  16.12.080: places  restrictions on  how monies                                                                    
          receives from  sale of shellfish may  be used only                                                                    
          for   operating   costs  associated   with   their                                                                    
          facilities;                                                                                                           
                                                                                                                                
          AS 16.12.090:  Relates to Cost  Recovery Fisheries                                                                    
          and  provides   a  means  by  which   a  shellfish                                                                    
          hatchery may  contract to either harvest  and sell                                                                    
          shellfish, or to  implement a self-assessment from                                                                    
          amongst   its   membership,    for   purposes   of                                                                    
          recovering operational  costs associated  with the                                                                    
          hatchery;                                                                                                             
                                                                                                                                
          AS  16.12.100: Gives  the department  authority to                                                                    
          inspect facilities at any  time while the facility                                                                    
          is in operation;                                                                                                      
          AS 16.12.110:  Requires a permit holder  to submit                                                                    
          an annual report to the department;                                                                                   
                                                                                                                                
          AS    16.12.199:    provides    definitions    for                                                                    
          "enhancement  project,"  "facility,"  "genetically                                                                    
          modified shellfish," "hatchery," and shellfish;"                                                                      
                                                                                                                                
     Sec.  4:   Provides  the  Commercial   Fisheries  Entry                                                                    
     Commission  authority  to  issue special  harvest  area                                                                    
     entry   permits  to   holders   of  private   nonprofit                                                                    
     shellfish   rehabilitation,   or  enhancement   project                                                                    
     permits.                                                                                                                   
                                                                                                                                
     Sec. 5: Defines legal  fishing gear for special harvest                                                                    
     area entry permit holders.                                                                                                 
                                                                                                                                
     Sec.  6:   Exempts  shellfish   raised  in   a  private                                                                    
     nonprofit  shellfish  project   from  the  farmed  fish                                                                    
     definition. Sec. 7-8:  Establish state corporate income                                                                    
     tax  exemption for  a nonprofit  corporation holding  a                                                                    
     shellfish fishery enhancement permit.                                                                                      
                                                                                                                                
     Sec.  9: Exempts  shellfish harvested  under a  special                                                                    
     harvest  area  entry  permit from  seafood  development                                                                    
     taxes.                                                                                                                     
                                                                                                                                
     Sec. 10:  Establishes an effective date  for the salmon                                                                    
     hatchery permit application fee described in sec. 2.                                                                       
                                                                                                                                
     Sec. 11: Authorizes the Department  of Fish and Game to                                                                    
     adopt implementing regulations.                                                                                            
                                                                                                                                
     Sec. 12:  Establishes an  immediate effective  date for                                                                    
     sec. 11 pursuant to AS 01.10.070(c).                                                                                       
                                                                                                                                
     Sec. 13: Establishes an effective date for sec. 8                                                                          
     concomitant with sec. 2, Chapter 55, SLA 2013.                                                                             
                                                                                                                                
1:39:07 PM                                                                                                                    
                                                                                                                                
Representative Sullivan-Leonard referred to  Page 2, line 10                                                                    
of HB 41.  She asked about the fee being  waived, the reason                                                                    
for waiving the fee, and by what method.                                                                                        
                                                                                                                                
Mr. Rabung  explained that AS  16.10.480 was the  section of                                                                    
the salmon  fishery enhancement  or salmon  hatchery statute                                                                    
that  pertained to  contracting out  the operation  of state                                                                    
hatcheries   to  the   private  sector.   Alaska  owned   12                                                                    
hatcheries  and the  department contracted  their operations                                                                    
out  to the  private  sector  at no  cost  to  the State  of                                                                    
Alaska. They  operated on behalf  of the state at  their own                                                                    
expense. In  the case  of operating  permits for  the state-                                                                    
owned   hatcheries,  the   commissioner   could  waive   the                                                                    
application fee.                                                                                                                
                                                                                                                                
Representative  Knopp was  curious about  Section 6  and the                                                                    
farmed  fish  exemption.  He asked  for  the  definition  of                                                                    
farmed fish versus hatchery fish.                                                                                               
                                                                                                                                
Mr. Rabung replied that farmed  fish was never released into                                                                    
the  wild.  It  was  maintained and  reared  under  positive                                                                    
control from  the time it  was seed until it  was harvested.                                                                    
It  was a  private  ownership. It  was  akin to  terrestrial                                                                    
farming where the  farmer bought seed, planted  it, and grew                                                                    
a  product. The  state had  an aquatic  farming program  for                                                                    
oysters and kelp.  He continued that the state  also had the                                                                    
salmon  fishery  enhancement  program.   It  was  about  the                                                                    
fishery  rather than  the fish.  It  was more  of a  service                                                                    
program.  He explained  that they  were  designed to  create                                                                    
additional   harvestable  surplus   of  a   common  property                                                                    
resource  that  could be  legally  harvested  by anyone  who                                                                    
could obtain a fishing permit  or fishing license. They were                                                                    
not  owned until  they  were harvested.  House  Bill 41  was                                                                    
modeled   after  the   salmon   enhancement  program   where                                                                    
juveniles were created in a  protective environment then out                                                                    
planted  in the  wild where  they became  a common  property                                                                    
resource.  The   resource  was  not   owned  until   it  was                                                                    
harvested.                                                                                                                      
                                                                                                                                
Representative Carpenter asked how  the special harvest area                                                                    
locations were identified, created,  or changed. He wondered                                                                    
about the process.                                                                                                              
                                                                                                                                
Mr. Rabung responded that during  the permitting process the                                                                    
commissioner  of DFG  identified where  the special  harvest                                                                    
area would be.  A special harvest area was the  only place a                                                                    
permit holder  could harvest the organisms  to recover their                                                                    
costs. Otherwise,  there was no  place they could  harvest -                                                                    
there had to be a  special harvest area. The department also                                                                    
issued  individuals  a  special harvest  area  permit  which                                                                    
authorized  them   to  harvest  stock,  a   common  property                                                                    
resource. He  suggested that by providing  a special harvest                                                                    
area and  the right to harvest  the area, it was  akin to an                                                                    
exclusive  right  of fishery  in  a  specific location.  The                                                                    
issue   was    specifically   addressed   in    the   Alaska                                                                    
Constitution.  It  was  amended  in 1972  in  Article  VIII,                                                                    
Section 15 which  allowed for an exclusive  right of fishery                                                                    
for the  efficient development of aquaculture  in the state.                                                                    
He reported that without that  provision in the constitution                                                                    
it could  not be done. He  continued that it started  in the                                                                    
constitution.  The  Alaska  Board   of  Fish  also  had  the                                                                    
authority to  amend, change, or  otherwise modify  a special                                                                    
harvest area.                                                                                                                   
                                                                                                                                
1:44:09 PM                                                                                                                    
                                                                                                                                
Representative  Carpenter  asked   if  there  were  existing                                                                    
fishermen  of shellfish  who were  already fishing  natural,                                                                    
wild production who would be subject to a fee.                                                                                  
                                                                                                                                
Mr.  Rabung responded  that the  department would  typically                                                                    
require the release to be  in a location where, if possible,                                                                    
there was  already an existing  fishery. It was  designed to                                                                    
benefit existing  fisheries. In order to  pay for production                                                                    
there were  two models in  the bill. He elaborated  that one                                                                    
of them was  a fishery assessment where  the common property                                                                    
fisherman would pay  a percentage of what  they harvested in                                                                    
the designated  areas to  pay for the  cost of  the project.                                                                    
The other  model was  a direct cost  recover fishery  by the                                                                    
project  permit holder.  Typically,  if  someone did  direct                                                                    
cost  recovery  harvests, it  was  done  on a  much  smaller                                                                    
scale. A person only needed  a small percentage of a normal-                                                                    
sized  project to  pay for  it.  It would  provide a  permit                                                                    
holder  the  opportunity  to  specify  when  they  would  be                                                                    
fishing.  The  rest  of  the  time  the  resource  would  be                                                                    
available as common property.                                                                                                   
                                                                                                                                
Mr.  Rabung  indicated  that  the  state  had  a  rotational                                                                    
fishery for  salmon in a  special harvest area.  The special                                                                    
harvest area  entry permit holder  would be allowed  to fish                                                                    
and typically  had a  goal to cover  their costs  each year.                                                                    
The rest  of the time  there was a common  property rotation                                                                    
in place by gear groups,  such as seiners or gillnetters, to                                                                    
have a  turn at  the harvest.  Only common  property fishing                                                                    
took place outside of special  harvest areas. In the case of                                                                    
salmon, they were intercepted on  their way into the special                                                                    
harvest areas. The only remaining  areas left for harvest by                                                                    
the  hatchery  operators  was  what   made  it  through  the                                                                    
existing fisheries.                                                                                                             
                                                                                                                                
Mr.  Rabung reported  that it  was  slightly different  with                                                                    
invertebrates. They did not have  the same life cycle or the                                                                    
same homing mechanisms  as salmon. It would not  be as clear                                                                    
cut how  the department would  approach the issue.  It would                                                                    
have  to  be on  a  case-by-case  basis  based on  the  life                                                                    
history of  the species being  enhanced. King Crab  would be                                                                    
handled  differently than  sea cucumbers  or Geoducks.  Each                                                                    
species  would be  custom fit.  He  believed the  assessment                                                                    
option would be most widely used.                                                                                               
                                                                                                                                
Representative Carpenter  asked who decided when  or where a                                                                    
particular   species  needed   to  be   replenished  on   an                                                                    
artificial basis.  Mr. Rabung replied  that the  program was                                                                    
stakeholder-driven  and   based  on   the  desires   of  the                                                                    
fisheries stakeholders.  It would have  to be driven  by the                                                                    
fishery participants just like salmon.                                                                                          
                                                                                                                                
Representative  Tilton   asked  if   introducing  artificial                                                                    
species posed a  threat to wild species.  Mr. Rabung replied                                                                    
that they  were not  artificial species. The  department was                                                                    
requiring  the  use of  local  stocks.  They were  naturally                                                                    
indigenous stocks in  the location from where  they would be                                                                    
harvested.  He   provided  an  example  of   Sea  Cucumbers.                                                                    
Currently,  the  common   property  fisheries  had  rotating                                                                    
fisheries. Every  three or four  years permit  holders would                                                                    
fish an  area. It  took 3  or 4 years  for the  cucumbers to                                                                    
replenish  themselves.  In  the model  that  the  department                                                                    
would be using, it would  collect a sampling of the species,                                                                    
raise them  in the  hatchery speeding up  the rehabilitation                                                                    
process before  being replenished  in the wild.  He provided                                                                    
an additional  example with Razor  Clams in the  Cook Inlet.                                                                    
He elaborated on the Razor Clam model.                                                                                          
                                                                                                                                
1:50:20 PM                                                                                                                    
                                                                                                                                
Representative  Carpenter referred  to Mr.  Rabung's example                                                                    
of Razor Clams  in the Cook Inlet. He did  not believe there                                                                    
was a  commercial operation existing  for Razor  Clams. They                                                                    
would likely fall under a  personal use fishery. He spoke of                                                                    
the user  group restriction  because of low  populations. He                                                                    
wondered  how   the  process   would  be   financed  without                                                                    
commercial interest  involvement. Mr. Rabung  suggested that                                                                    
it was easiest to find  funding for the commercial fisheries                                                                    
model. It did not  preclude any non-profit organization from                                                                    
participating as  long as they  were able to  obtain funding                                                                    
such  as grants  or membership  fees for  organizations. The                                                                    
main limitation  was how a commercial  fishery could provide                                                                    
funding. There  was not  a mechanism in  the bill  to assess                                                                    
users to pay for the programs.                                                                                                  
                                                                                                                                
Representative Carpenter  wondered if it was  correct to say                                                                    
that the funding mechanism for  non-profits to engage in the                                                                    
enhancement program  would be  outside of  state government,                                                                    
and the bill was addressing  only the permitting. Mr. Rabung                                                                    
responded affirmatively.  The state  use to have  a division                                                                    
that did the work up until  the mid '90s. Since then, it had                                                                    
been a user-pay program.                                                                                                        
                                                                                                                                
1:52:57 PM                                                                                                                    
                                                                                                                                
Co-Chair Wilson  asked about the  fee of $1,000  and whether                                                                    
it  would pay  for  all  of the  costs  associated with  the                                                                    
permitting  process. Mr.  Rabung  explained that  it was  an                                                                    
application processing fee.  He did not think  the fee would                                                                    
cover  the cost  of the  entire program.  However, it  would                                                                    
cover processing the permit application.                                                                                        
                                                                                                                                
Co-Chair Wilson understood that the  fishery was done by the                                                                    
user  group.  She thought  the  only  responsibility of  the                                                                    
department would be to process  the permit applications. She                                                                    
wondered if she was accurate.  Mr. Rabung responded that the                                                                    
department would continue managing  the fisheries. The state                                                                    
would  still  be involved  in  managing  any fisheries  that                                                                    
would result from these projects.  Co-Chair Wilson wanted to                                                                    
know the  costs associated with managing  the fisheries. She                                                                    
thought further discussion would be needed.                                                                                     
                                                                                                                                
ELIZABETH   NUDELMAN,   AUDIT  SUPERVISOR,   TAX   DIVISION,                                                                    
DEPARTMENT  OF  REVENUE,  indicated  the  department  had  a                                                                    
fiscal note related to HB 41.                                                                                                   
                                                                                                                                
Co-Chair  Wilson asked  Ms. Nudelman  to clarify  the fiscal                                                                    
note she  was referring  to, as  DOR had  three of  them for                                                                    
HB 41. Ms.  Nudelman was  speaking to  the fiscal  note with                                                                    
OMB component  number 2476 (copy  on file).  Co-Chair Wilson                                                                    
referenced FN2.                                                                                                                 
                                                                                                                                
Ms. Nudelman explained that DOR  collected the fisheries tax                                                                    
and assessments.  The cost recovery for  the common property                                                                    
fisheries would be  collected by the Tax  Division and would                                                                    
be  dispersed as  required. The  fiscal  note covered  costs                                                                    
related  to DOR  collecting the  assessments. It  would also                                                                    
cover the necessary costs required  to update the division's                                                                    
tax management  system and to finalize  any additional paper                                                                    
forms or instructions that might be needed.                                                                                     
                                                                                                                                
Co-Chair Wilson  referred to page  2 of the fiscal  note and                                                                    
the implementation costs. She  read directly from the fiscal                                                                    
note.  She asked  about the  cost of  $50,000 to  update the                                                                    
department's  system.  She  wondered   if  DOR  already  had                                                                    
$50,000  or  whether   the  department  required  additional                                                                    
funding  for  the program.  Ms.  Nudelman  replied that  the                                                                    
fiscal note  asked for additional  funding for  the program.                                                                    
The request for the funding could  be found on page 1 of the                                                                    
fiscal  note.  She  pointed to  the  estimated  supplemental                                                                    
request for FY 19 in the amount of $50,000.                                                                                     
                                                                                                                                
Co-Chair  Wilson  commented  that the  legislation  had  not                                                                    
passed  yet. She  wondered why  FY  19 funds  would be  used                                                                    
rather than FY  20 funds. She thought  the regulations would                                                                    
not be  put into place  until FY 20. Ms.  Nudelman explained                                                                    
that when  the fiscal note  was drafted, the  placement into                                                                    
the FY 19  supplemental was based on the date  that the bill                                                                    
would become  law. It would  become law immediately.  At the                                                                    
time the fiscal note was  drafted the department was looking                                                                    
to make sure it was ready to go alongside the legislation.                                                                      
                                                                                                                                
Co-Chair Wilson  conveyed that although she  appreciated the                                                                    
information, she thought a new  fiscal note would be needed.                                                                    
She  did  not  believe  the legislature  would  approve  the                                                                    
supplemental amount for the item.  She asked Ms. Nudelman to                                                                    
take  her  request  back to  the  department.  Ms.  Nudelman                                                                    
indicated she would do so.                                                                                                      
                                                                                                                                
Co-Chair  Wilson reported  that there  was no  one from  the                                                                    
Department of  Administration to speak  to FN1 and  FN3. The                                                                    
committee would come back to review them at a later date.                                                                       
                                                                                                                                
1:58:36 PM                                                                                                                    
                                                                                                                                
Co-Chair Wilson OPENED Public Testimony.                                                                                        
                                                                                                                                
1:58:52 PM                                                                                                                    
                                                                                                                                
TIMOTHY KOENEMAN, SELF,  PETERSBURG   (via  teleconference),                                                                    
spoke in opposition  to the bill. He retired  from DFG after                                                                    
being  an  employee for  26  years  within the  Division  of                                                                    
Commercial  Fisheries. His  primary responsibilities  had to                                                                    
do with  research and the management  of shellfish fisheries                                                                    
in Southeast Alaska in Yakutat.  He opposed adding shellfish                                                                    
to  the private  non-profit  (PNP) statutes,  as he  thought                                                                    
there  were already  existing problems  within  the law.  He                                                                    
relayed  that shellfish  were  different  species with  very                                                                    
complex life histories and fit  in different portions of the                                                                    
trophic pyramid  and the  food web.  He provided  an example                                                                    
regarding  reproduction and  the  status  of many  different                                                                    
stocks.  He   suggested  that  prior   to  embarking   in  a                                                                    
significant  change  and  enhancement the  state  needed  to                                                                    
strictly evaluate where it had  been. He recommended looking                                                                    
at the  management plans in  place to evaluate  whether they                                                                    
were  adequate or  adequately funded.  Otherwise, the  state                                                                    
was likely to make some of  the same mistakes it had already                                                                    
made. Moving  forward, he  suggested that  shellfish species                                                                    
deserved  and  required  a different  set  of  statutes  and                                                                    
regulations than  salmon. There  were some  similarities but                                                                    
also  some  tremendous  differences, particularly  in  their                                                                    
life history.  He had questions  how the  private non-profit                                                                    
stakeholders became  the owners  of the resource.  He wanted                                                                    
to  better understand  the meaning  of  common property.  He                                                                    
also  commented  that  $1,000 would  not  allow  for  enough                                                                    
research on any of the  species, much less properly evaluate                                                                    
a permit.  He thought more  money was needed to  support the                                                                    
program.                                                                                                                        
                                                                                                                                
2:02:22 PM                                                                                                                    
                                                                                                                                
NANCY HILLSTRAND,  PIONEER ALASKAN FISHERIES,  SELDOVIA (via                                                                    
teleconference),  spoke in  opposition to  HB 41.  She asked                                                                    
the legislature  to focus  on a  step-by-step rehabilitation                                                                    
program  -  not  on  enhancement. She  suggested  that  only                                                                    
professionals  should investigate  the shellfish  experiment                                                                    
to  the   next  level,  not  late-exposed   open  to  costly                                                                    
production.  She continued  that from  an economic  business                                                                    
perspective self-perpetuating wild  stocks provided the most                                                                    
efficient business  model. She  supported finding  the cause                                                                    
of depressed shellfish rather than  applying a hatchery band                                                                    
aide. She  believed HB 41 did  not promote self-perpetuating                                                                    
stocks.  It  used  45-year  old  statutes  with  flaws.  She                                                                    
brought   up  the   issues  of   oversight  and   state-wide                                                                    
perspective.  She  posed  several  questions  the  committee                                                                    
should be asking. She continued  to speak on the reasons the                                                                    
bill needed perfecting. She  mentioned that shareholders did                                                                    
not have a means to weigh in. She thanked the committee.                                                                        
                                                                                                                                
2:05:43 PM                                                                                                                    
                                                                                                                                
Co-Chair Wilson CLOSED Public Testimony.                                                                                        
                                                                                                                                
Mr. Rabung  reviewed the other  two fiscal notes for  HB 41.                                                                    
He  relayed  that  FN3  [OMB  2171]  was  indeterminate.  He                                                                    
explained that in  the previous session the  fiscal note had                                                                    
been  zero.   There  was  potential  for   unseen  costs  if                                                                    
something grew substantially. In  his estimation, he thought                                                                    
it would  increase incrementally.  The department  had staff                                                                    
in place that conducted  similar permitting, management, and                                                                    
research activities.  The department was not  willing to ask                                                                    
for an increment until necessary.                                                                                               
                                                                                                                                
Co-Chair   Wilson   asked   if  the   department   allocated                                                                    
personnel's time.  She wondered  if he had  some statistics.                                                                    
Mr.  Rabung  replied that  the  division  received very  few                                                                    
permit applications.  Some years the division  received 3 or                                                                    
4 applications, and in other  years it received none. In the                                                                    
history  of the  salmon program  there had  been 50  permits                                                                    
issued, a large number of  which were re-permits of the same                                                                    
facility under new  ownership. There was not  a large volume                                                                    
of  applications,  and  they   were  funded  with  user  pay                                                                    
dollars.  The  location  sideboards  limited  permitting  as                                                                    
well. The division  would absorb the cost  of processing the                                                                    
permits  because   of  a  lack  of   volume.  No  additional                                                                    
personnel would be needed.                                                                                                      
                                                                                                                                
2:09:22 PM                                                                                                                    
                                                                                                                                
Co-Chair Wilson  asked if the department  had authority. She                                                                    
suggested it  might simplify  the process  by not  having to                                                                    
make  additional requests  to  the  legislature. Mr.  Rabung                                                                    
responded  that there  were  several  unknown factors  about                                                                    
potential  volume.  The division  had  staff  in place  that                                                                    
already  did   related  work  and   would  be   involved  in                                                                    
developing a new  permit. He suggested that if  there was an                                                                    
increase in the volume  of applications, the timeframe would                                                                    
be longer for  processing. He did not  anticipate adding any                                                                    
staff.                                                                                                                          
                                                                                                                                
Representative Carpenter  asked how  many employees  were in                                                                    
place  dealing  with  the  permitting  process.  Mr.  Rabung                                                                    
replied  that there  were 3  year-round  employees. He  also                                                                    
noted that they handled other permits as well.                                                                                  
                                                                                                                                
Representative  Carpenter  mentioned   mission  creep  which                                                                    
caused  him concern.  He thought  to say  that it  would not                                                                    
cost the  state anything  fiscally when  the permits  took 6                                                                    
months  to 1  year  to complete  was unreasonable.  Co-Chair                                                                    
Wilson agreed. She directed Mr.  Rabung to address FN1 (copy                                                                    
on file).                                                                                                                       
                                                                                                                                
Mr. Rabung  spoke to  FN1 [OMB 471].  He indicated  that the                                                                    
note  was from  the  Commercial  Fisheries Entry  Commission                                                                    
(CFEC). A  Commercial Fisheries Entry Commission  permit was                                                                    
required  for  anyone  to participate  commercially  in  the                                                                    
existing fisheries. He  reported there would not  be any new                                                                    
permits other than  a cost recovery fishery  for a shellfish                                                                    
enhancement  project. It  would  require  a special  harvest                                                                    
area entry permit and was  limited to one per project. There                                                                    
was  a  one-page  application. He  did  not  anticipate  any                                                                    
significant additional work.                                                                                                    
                                                                                                                                
Co-Chair  Wilson thought  additional information  was needed                                                                    
before calling for  amendments. She would bring  up the bill                                                                    
later  in  the  week  when  the  sponsor  of  the  bill  was                                                                    
available.                                                                                                                      
                                                                                                                                
HB  41  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HOUSE BILL NO. 106                                                                                                            
                                                                                                                                
     "An Act relating to school bond debt reimbursement."                                                                       
                                                                                                                                
2:14:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   TAMMIE   WILSON,  BILL   SPONSOR,   invited                                                                    
testifiers to the table. Her  intent was to discuss a change                                                                    
from how  the program  operated historically to  make things                                                                    
more efficient and effective for school districts.                                                                              
                                                                                                                                
HEIDI TESHNER, ADMINISTRATIVE  SERVICES DIRECTOR, DEPARTMENT                                                                    
OF  EDUCATION AND  EARLY DEVELOPMENT,  OFFICE OF  MANAGEMENT                                                                    
AND BUDGET, had  Elwin Blackwell and Tim Mearig  with her to                                                                    
provide  as  much information  as  possible  about the  debt                                                                    
reimbursement  program. Mr.  Blackwell  would  start off  by                                                                    
providing a history of the program.                                                                                             
                                                                                                                                
2:15:26 PM                                                                                                                    
                                                                                                                                
ELWIN  BLACKWELL,  SCHOOL  FINANCE  MANAGER,  DEPARTMENT  OF                                                                    
EDUCATION AND EARLY DEVELOPMENT,  explained that the program                                                                    
dated back to  the early '70s when it was  first enacted. In                                                                    
the  early days  of the  program  the state  was paying  100                                                                    
percent in  a reimbursement  back to municipalities.  It was                                                                    
being  done  on a  2-year  lagging  basis. The  municipality                                                                    
would make  the payment  and 2 years  later the  state would                                                                    
reimburse their payment.  In the mid '70s  the state changed                                                                    
the statute  providing less than 100  percent reimbursement.                                                                    
The percentage of reimbursement  decreased to 90 percent and                                                                    
remained on a  2-year lagging basis. In the  late '70s there                                                                    
was a  cash reimbursement  portion of  the program  in which                                                                    
municipalities could appropriate money  for a project rather                                                                    
than  issuing debt.  Municipalities could  pay out  of their                                                                    
current resources  and be reimbursed for  their expenditures                                                                    
by  the   state  on  a   2-year  lagging  basis.   The  cash                                                                    
reimbursement portion  of the program  was shut down  in the                                                                    
late '80s.                                                                                                                      
                                                                                                                                
Mr. Blackwell continued  that in the early  '90s the program                                                                    
went  to a  70 percent  reimbursement,  and the  legislature                                                                    
started putting  some parameters  on how much  principle the                                                                    
department   could  approve.   Municipalities  would   issue                                                                    
projects to the state, and  once the principle threshold was                                                                    
reached, the state would not  accept any other projects. The                                                                    
money  was  divided  based  on the  enrollment  sizes  of  a                                                                    
municipality.  The  state decided  to  place  a cap  on  the                                                                    
amount of  reimbursement. In  1983, the  state shifted  to a                                                                    
current year reimbursement.                                                                                                     
                                                                                                                                
He  reported   that  the  state   remained  at   70  percent                                                                    
reimbursement, and at different  times the legislature would                                                                    
open up  the statute  incorporating a  new section  with new                                                                    
limits. Changes occurred  3 or 4 times. He  reported that in                                                                    
1999,  the program  was opened  up  and there  was a  slight                                                                    
change. Prior to the change,  a school would have to qualify                                                                    
for space  in order  to receive reimbursement.  For example,                                                                    
if a municipality was adding  additional space to its school                                                                    
facilities,  it  had to  show  it  had an  unhoused  student                                                                    
population  to qualify  for the  need for  additional space.                                                                    
For  schools that  did  not qualify  but  wanted to  develop                                                                    
additional space, the  state would help participate  on a 60                                                                    
percent  basis.   The  program  stayed  in   place  but  had                                                                    
different amendments including different sunsets.                                                                               
                                                                                                                                
2:19:47 PM                                                                                                                    
                                                                                                                                
Co-Chair Wilson  asked Mr.  Blackwell to  define "unhoused."                                                                    
She also asked why the state  agreed to the 60-40 ratio if a                                                                    
district  could  not  demonstrate the  need  for  additional                                                                    
space. Mr. Blackwell responded  that the "unhoused" question                                                                    
had to  do with the  state's space guidelines.  He expounded                                                                    
that  the size  of  a  state school  was  determined by  its                                                                    
student  population. If  a  student  population was  greater                                                                    
than  the  size  of  a   school,  students  were  considered                                                                    
"unhoused."  A school  would qualify  for additional  square                                                                    
footage  to  provide adequate  space  based  on the  state's                                                                    
space guidelines.                                                                                                               
                                                                                                                                
Mr.  Blackwell  recalled  some schools  that  wanted  to  do                                                                    
remodeling also  wanted to add  more space.  The legislature                                                                    
approved  a  lower  split  of   60/40  for  schools  without                                                                    
unhoused students.                                                                                                              
                                                                                                                                
Vice-Chair Johnston  thought the 60/40  ratio implementation                                                                    
had to do with projected  overcrowding. She asked if she was                                                                    
correct.  Mr.  Blackwell responded  in  the  negative. If  a                                                                    
municipality  could  not  show   that  they  would  have  an                                                                    
unhoused  student population  but  wanted  more space,  they                                                                    
would  qualify  for  the   60/40  reimbursement  ration.  It                                                                    
allowed municipalities to add more space than they needed.                                                                      
                                                                                                                                
Co-Chair Wilson  commented, "I am  pretty sure we did  it to                                                                    
ourselves."                                                                                                                     
                                                                                                                                
Representative Knopp  recalled about  5 or  6 years  ago the                                                                    
department set new standards for  square footage per student                                                                    
driving up  construction costs. He  asked if  the department                                                                    
could comment.                                                                                                                  
                                                                                                                                
2:23:04 PM                                                                                                                    
                                                                                                                                
TIM MEARIG, FACILITIES MANAGER,  DEPARTMENT OF EDUCATION AND                                                                    
EARLY  DEVELOPMENT,   relayed  that  the   space  allocation                                                                    
guidelines  had not  been  revised since  2002.  He was  not                                                                    
familiar with any change occurring  within the timeframe the                                                                    
representative  referenced. He  was happy  to discuss  space                                                                    
guidelines  - the  legislature's primary  way of  allocating                                                                    
resources  for school  projects  and  limiting the  resource                                                                    
allocations   to  where   they  were   needed.  There   were                                                                    
significant  regulations and  statutory language  around the                                                                    
topic.                                                                                                                          
                                                                                                                                
Representative Knopp  thought the timeframe might  have been                                                                    
longer.  He  queried the  criteria  for  a new  construction                                                                    
project  per square  foot per  student.  Mr. Mearig  relayed                                                                    
that the state  had 3 different measures.  He indicated that                                                                    
the square foot formula  equated to approximately 165 square                                                                    
feet  per student.  The  state had  one  square footage  for                                                                    
elementary students (Kindergarten through  6th grade) of 124                                                                    
square feet.  The measures were  spelled out in  the state's                                                                    
regulations.  He  continued that  each  had  a base  student                                                                    
allocation  with a  supplemental allocation  that helped  to                                                                    
account  for  things  required   by  code  like  circulation                                                                    
elements and mechanical spaces.  The way the space standards                                                                    
were  applied  made  a difference.  He  mentioned  long-term                                                                    
storage  needs  in  remote   locations  with  limited  barge                                                                    
service.  Generally,  the system  was  robust  and had  been                                                                    
looked  upon   with  favor.  Some  constituent   groups  had                                                                    
recommended a review of the space guidelines.                                                                                   
                                                                                                                                
Representative Tilton  asked about the changes  made in 1999                                                                    
regarding  qualifications for  space  for unhoused  students                                                                    
and the  60/40 ratio. She  asked what percentage  applied to                                                                    
schools  that  did  qualify  for   space  for  the  unhoused                                                                    
students. Mr.  Blackwell replied that if  a school qualified                                                                    
for additional  space, the  department would  participate at                                                                    
70 percent reimbursement with the municipality.                                                                                 
                                                                                                                                
Representative LeBon had been on  the school board at a time                                                                    
when  the  municipality   renovated  the  Hutchinson  Career                                                                    
Center into  a traditional stand-alone high  school in 1998.                                                                    
He recalled  that the  discussion revolved  around expanding                                                                    
the  foot print  of  the building.  The  request the  school                                                                    
district made  was to add a  gymnasium. He thought it  was a                                                                    
good reason to ask for a waiver and expand a foot print.                                                                        
Co-Chair  Wilson interjected  wondering whether  the project                                                                    
would fall under the 70/30 guidelines.                                                                                          
                                                                                                                                
2:27:38 PM                                                                                                                    
                                                                                                                                
Mr.  Mearig responded  that  Representative LeBon's  example                                                                    
was  appropriate.   He  referenced  the   Hutchinson  Career                                                                    
Center, a preexisting building,  and the desire to repurpose                                                                    
the space. There was a  significant amount of space that was                                                                    
not anticipated. Similar projects  led the legislature to be                                                                    
flexible  with  its limitations.  He  mentioned  an area  in                                                                    
statute  that defined  4 standards  that  had to  be met  in                                                                    
order for a project to qualify at a higher percentage.                                                                          
                                                                                                                                
Co-Chair Wilson  mentioned Ryan Middle School  and indicated                                                                    
that the  project was  essentially made  into a  70/30 split                                                                    
with the help of a grant from the legislature.                                                                                  
                                                                                                                                
Representative   Tilton   spoke    about   eligibility   for                                                                    
reimbursement versus state aide  provided. She noted it went                                                                    
from 100 percent  from 1991 through 2016 down  to 80 percent                                                                    
in  2017 and  back  up  to 100  percent.  She wondered  what                                                                    
happened in 2017.                                                                                                               
                                                                                                                                
2:30:18 PM                                                                                                                    
                                                                                                                                
Co-Chair  Wilson  guided  the  committee to  start  in  1999                                                                    
moving  up to  2017 first  before addressing  Representative                                                                    
Tilton's question.                                                                                                              
                                                                                                                                
Mr. Blackwell picked  up where he had left off  in 1999. The                                                                    
state  had  limits  on  the amount  of  principle  it  could                                                                    
approve  for reimbursement.  In  2006, the  program added  2                                                                    
sections   that  included   60   percent   and  70   percent                                                                    
reimbursements  under  the same  kind  of  criteria. At  the                                                                    
time, there  were no limits  on the amount of  principle the                                                                    
department could  approve. Originally,  it was  scheduled to                                                                    
sunset  in  2008.  However,  the  legislature  extended  the                                                                    
sunset  date  to  2010.  In 2010,  the  sunset  was  removed                                                                    
altogether  leaving the  program open  to whatever  projects                                                                    
the  municipalities could  get  the voters  to approve,  and                                                                    
they began to grow substantially.                                                                                               
                                                                                                                                
Mr.  Blackwell continued  that in  2014 the  legislature was                                                                    
looking to sunset the 60  percent portion in statute and add                                                                    
a new  section making  the percentage  50 percent.  In 2015,                                                                    
SB 64    [Legislation    regarding    school    bond    debt                                                                    
reimbursement]  passed repealing  50 percent  and shut  down                                                                    
the program  until July 1, 2020.  For a little over  5 years                                                                    
the program would  be shut down. He furthered  that when the                                                                    
program  came back  online, sections  were  added that  gave                                                                    
qualifying  municipalities a  50 percent  reimbursement, and                                                                    
those  that did  not  qualify received  40 percent.  Looking                                                                    
ahead, when  the program reopened, the  state would decrease                                                                    
the reimbursement  by 20 percent for  municipalities falling                                                                    
under either category.                                                                                                          
                                                                                                                                
Mr. Blackwell  returned to Representative  Tilton's question                                                                    
about why the state dropped  in 2017. He explained that 2017                                                                    
was the year  that Governor Walker vetoed 25  percent of the                                                                    
debt reimbursement  program. He  further explained  that the                                                                    
reason it  did not show as  75 percent and only  79 percent,                                                                    
was   that  when   districts  provided   their  figures   of                                                                    
anticipated debt reimbursement for  the following year, they                                                                    
included  items such  as anticipated  bond sales.  Sometimes                                                                    
the  bonds  were  sold  for  less  than  they  thought,  the                                                                    
interest  rates were  better, or  because  of timing  issues                                                                    
with the municipalities. Sometimes  there was a small amount                                                                    
of  money in  the  program  left over  due  to changes.  The                                                                    
department  prorated  the  additional money  the  result  of                                                                    
which left a 25 percent  cut, but municipalities received 79                                                                    
percent  of what  would have  been due  had the  program not                                                                    
been cut at all.                                                                                                                
                                                                                                                                
2:34:48 PM                                                                                                                    
                                                                                                                                
Representative  Josephson  asked  if  the  legislature  ever                                                                    
declared it  would not  cover the  amounts that  had already                                                                    
been promised.                                                                                                                  
                                                                                                                                
Co-Chair Wilson relayed that it  was Governor Walker who did                                                                    
not cover  the promised  amounts. She  wondered if  the bond                                                                    
reimbursement  had  not  been  paid at  any  other  time  in                                                                    
history. Mr. Blackwell  responded that in the  80s, when the                                                                    
state  had similarly  challenging fiscal  times, there  were                                                                    
conscious  reductions  to  the  program.  He  recalled  that                                                                    
Governor   Cooper  underfunded   the   program  during   his                                                                    
administration. He  had not  asked for  100 percent  of what                                                                    
would  have  been  needed.  There  were  periods  where  the                                                                    
reimbursements  were   less  than  100  percent.   In  those                                                                    
instances,  they  were   conscious  budget  reductions.  The                                                                    
program was  underfunded, and the  state prorated it  out to                                                                    
the municipalities.                                                                                                             
                                                                                                                                
Co-Chair  Wilson mentioned  SB 64  that passed.  It was  her                                                                    
understanding that  the bill had  a taskforce to  talk about                                                                    
options  for streamlining  designs. She  asked about  design                                                                    
restraints and other sideboards  prior to 2015. She wondered                                                                    
what  had been  done  since the  passage of  SB  64 and  the                                                                    
inception of the taskforce.                                                                                                     
                                                                                                                                
Ms. Teshner replied that it  was actually HB 278 [An omnibus                                                                    
education   bill  passed   in  2014]   that  initiated   the                                                                    
prototypical  design study  by  the  department. The  report                                                                    
came  out  in   October  2015.  She  asked   Mr.  Mearig  to                                                                    
elaborate.                                                                                                                      
                                                                                                                                
Mr.  Mearig  added  that  the  department  had  initiated  a                                                                    
taskforce through a bill [SB  87 offered in 2017] that never                                                                    
passed.  There  had been  some  activities  around the  same                                                                    
themes with the current statutory  committee put in place in                                                                    
1993 by  the legislature,  the Bond Reimbursement  and Grant                                                                    
Review  Committee. He  spoke of  the committee  being active                                                                    
every year  which had  worked to  establish and  improve the                                                                    
application process for school  capital grants and bond debt                                                                    
reimbursement.   The  committee   also  reviewed   the  cost                                                                    
effectiveness of  school construction  and did some  work in                                                                    
prototypical analysis. Over the prior  2 years the state had                                                                    
experienced  a  significant  uptick  in some  of  the  areas                                                                    
including cost-effective  school construction likely  due to                                                                    
the  introduction of  SB  87.  He was  happy  to answer  any                                                                    
additional questions.                                                                                                           
                                                                                                                                
2:39:42 PM                                                                                                                    
                                                                                                                                
Co-Chair Wilson asked  if the department was  looking at how                                                                    
the  state had  done  business. She  suggested cost  savings                                                                    
such as  standardizing certain  equipment. She  wonder about                                                                    
the department's efforts in revamping the program.                                                                              
                                                                                                                                
Mr.  Mearig relayed  that the  department  previously had  a                                                                    
couple of  initiatives. Throughout is tenure  the department                                                                    
had   an   active   process  in   implementing   legislative                                                                    
parameters for controlling costs  and getting the best value                                                                    
with  state  dollars.  The department  had  the  ability  to                                                                    
review all  applications and to  adjust project  requests in                                                                    
order  to achieve  cost-effective  school construction.  The                                                                    
department  did an  annual review  of all  applications that                                                                    
came before the department  for major maintenance and school                                                                    
construction. The  department had a qualified  staff capable                                                                    
of reviewing  systems and design.  However, it did  not have                                                                    
an active process in standardizing designs.                                                                                     
                                                                                                                                
Representative  Josephson  asked   how  other  jurisdictions                                                                    
handled facilities  management and construction.  Mr. Mearig                                                                    
had  been with  the National  Council of  School Facilities.                                                                    
His membership had  exposed him to the  practices being used                                                                    
in other parts  of the nation. He would be  happy to provide                                                                    
information regarding other states'  processes. The State of                                                                    
Washington  had   a  state  level  contribution   to  school                                                                    
construction.  The majority  of the  funding for  schools in                                                                    
Washington  came through  county-level government  and bonds                                                                    
passed in support of schools at the county-level.                                                                               
                                                                                                                                
Mr.  Mearig continued  that school  districts in  Washington                                                                    
had their  connection with those  counties and  autonomy and                                                                    
had responsibility  for schools  within each  district. Each                                                                    
of them, much  like in the State of Alaska,  had autonomy to                                                                    
operate and  make decisions for their  school districts. The                                                                    
state  had  some  standards  in  Washington  that  they  had                                                                    
implemented.  They had  developed a  high-performance school                                                                    
design criteria.  The state had studied  Washington's design                                                                    
model. In 1994, the State  of Washington had been invited to                                                                    
help the  Bond Reimbursement and Review  Committee establish                                                                    
and  application  and  statewide   need  basis.  Alaska  had                                                                    
partnered with Washington over the years.                                                                                       
                                                                                                                                
2:44:57 PM                                                                                                                    
                                                                                                                                
Representative  Tilton wondered  what type  of criteria  was                                                                    
applied  in  districts  losing or  gaining  population.  Mr.                                                                    
Mearig  answered  that  the state  required  all  applicants                                                                    
wanting to  add space  to provide the  department population                                                                    
projections. The department allowed  for those projects that                                                                    
needed space  additions to  perform a  5-year post-occupancy                                                                    
projection.  The State  of Alaska  was very  aware when  the                                                                    
information was  not being provided.  There could  be growth                                                                    
or decline in  a district that the department  was not aware                                                                    
of because of  a district not recently  participating in the                                                                    
annual  cycle  of  submitting   grant  applications  to  the                                                                    
department. The department had various  tools to look at the                                                                    
demographics around the state.                                                                                                  
                                                                                                                                
Representative   Carpenter   wanted    to   understand   the                                                                    
difference  between  qualifying  and  non-qualifying  ratios                                                                    
under SB 64.  He wondered if it had to  do with the unhoused                                                                    
student population criteria from  earlier in the discussion.                                                                    
He  asked for  a definition  for qualified  and unqualified.                                                                    
Mr.   Blackwell  responded   that  the   representative  was                                                                    
correct. It  would be  based on  whether a  person qualified                                                                    
for the  space. It would  determine whether the  ratio would                                                                    
be  40 percent  or 50  percent -  once the  program reopened                                                                    
again.                                                                                                                          
                                                                                                                                
Representative  Carpenter   asked  if  there   were  figures                                                                    
regarding  the  status  of   unqualified  or  qualified.  He                                                                    
wondered about  the preponderance  of need -  unqualified or                                                                    
qualified.                                                                                                                      
                                                                                                                                
Co-Chair Wilson  asked if the committee  should be referring                                                                    
to  the report  by  the Department  of  Education and  Early                                                                    
Development.                                                                                                                    
                                                                                                                                
Mr. Blackwell would  have to look at how  many projects were                                                                    
splitting out at 60 percent  and how many were splitting out                                                                    
at  70  percent  currently.  He  pointed  to  a  handout  in                                                                    
member's packets  showing estimated  state aid  with October                                                                    
15th at the top of the page.                                                                                                    
                                                                                                                                
Ms. Teshner asked if Co-Chair Wilson had the handout.                                                                           
                                                                                                                                
2:49:28 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:49:54 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair  Wilson indicated  that  the  information would  be                                                                    
posted  on   basis.  She  asked  Mr.   Blackwell  to  answer                                                                    
Representative Carpenter's question.                                                                                            
                                                                                                                                
Mr. Blackwell  reported that  about 75  percent of  the open                                                                    
reimbursements were at 70 percent  and about 25 percent were                                                                    
at 60 percent.                                                                                                                  
                                                                                                                                
Ms. Teshner  added that there  was one district that  had an                                                                    
80 percent reimbursement  and one district had  a 90 percent                                                                    
reimbursement  under  the   old  percentages.  However,  the                                                                    
majority of them were under 70 percent.                                                                                         
                                                                                                                                
Co-Chair Wilson  relayed that the  only change  reflected in                                                                    
HB 106 was  to extend the moratorium to 2025.  She hoped the                                                                    
department  would   provide  additional   information  about                                                                    
whether it  supported the legislation.  She wondered  if new                                                                    
sideboards should  be added. She  referred to a  report over                                                                    
100   pages  that   provided  additional   information.  She                                                                    
conveyed that the bill had a zero fiscal note.                                                                                  
                                                                                                                                
Vice-Chair Johnston MOVED to report  HB 106 out of Committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note.                                                                                                                           
                                                                                                                                
Representative   Josephson  OBJECTED   for  discussion.   He                                                                    
thought  the bill  made sense  based on  the current  fiscal                                                                    
challenges. He  noted speeches  made on  the House  floor in                                                                    
the  current  day  about  new   revenue.  He  advocated  new                                                                    
revenues.  He  thought  a  10-year  moratorium  was  a  long                                                                    
duration but thought HB 106 was a good bill.                                                                                    
                                                                                                                                
Vice-Chair  Johnston thought  it  was  important for  policy                                                                    
makers to have time to adequately review its policies.                                                                          
                                                                                                                                
Representative Josephson WITHDREW his OBJECTION.                                                                                
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
HB  106 was  REPORTED  out  of committee  with  a "do  pass"                                                                    
recommendation  and with  one new  zero fiscal  note by  the                                                                    
Department of Education and Early Development.                                                                                  
                                                                                                                                
Co-Chair Wilson reviewed the agenda for the following day.                                                                      
                                                                                                                                
ADJORNMENT                                                                                                                    
                                                                                                                                
2:55:04 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 2:55 p.m.                                                                                          

Document Name Date/Time Subjects
HB041 Sectional Analysis ver A 03.29.2019.pdf HFIN 4/8/2019 1:30:00 PM
HB 41
HB041 Sponsor Statement 03.29.2019.pdf HFIN 4/8/2019 1:30:00 PM
HB 41
HB041 Support Document - AFDF 03.29.2019.pdf HFIN 4/8/2019 1:30:00 PM
HB 41
HB041 Support Document - Alutiiq Pride 03.29.2019.pdf HFIN 4/8/2019 1:30:00 PM
HB 41
HB041 Support Document - APICDA 03.29.2019.pdf HFIN 4/8/2019 1:30:00 PM
HB 41
HB041 Support Document - CDFU 03.29.2019.pdf HFIN 4/8/2019 1:30:00 PM
HB 41
HB041 Support Document - MTF 04.05.2019.pdf HFIN 4/8/2019 1:30:00 PM
HB 41
HB041 Support Document - Oceans Alaska 03.29.2019.pdf HFIN 4/8/2019 1:30:00 PM
HB 41
HB041 Support Document - SARDFA 03.29.2019.pdf HFIN 4/8/2019 1:30:00 PM
HB 41
HB041 Support Document - SE Conference 03.29.2019.pdf HFIN 4/8/2019 1:30:00 PM
HB 41
HB041 Support Document - Silver Bay Seafoods 03.29.2019.pdf HFIN 4/8/2019 1:30:00 PM
HB 41
HB041 Support Document - UFA 03.29.2019.pdf HFIN 4/8/2019 1:30:00 PM
HB 41
HB041 Support Document - Wrangell 03.29.2019.pdf HFIN 4/8/2019 1:30:00 PM
HB 41
HB 106 Debt Reimbursement FY1976-2019.pdf HFIN 4/8/2019 1:30:00 PM
HB 106
HB 106 Debt Statute Leg History.pdf HFIN 4/8/2019 1:30:00 PM
HB 106
HB 106 BRGR Criteria for Cost-Effective School Construction Report_Final.pdf HFIN 4/8/2019 1:30:00 PM
HB 106
HB041 Support Document - AKCRRAB 04.08.2019.pdf HFIN 4/8/2019 1:30:00 PM
HB 41
HB 106 DOE FY 20 Estimated Aid.pdf HFIN 4/8/2019 1:30:00 PM
HB 106