Legislature(1993 - 1994)
04/19/1993 08:33 AM House FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
APRIL 19, 1993
8:33 A.M.
TAPE HFC 93 - 107, Side 2, #000 - end.
TAPE HFC 93 - 108, Side 1, #000 - #496.
CALL TO ORDER
Co-Chair Ron Larson called the meeting of the House Finance
Committee to order at 8:33 A.M.
PRESENT
Co-Chair Larson Representative Brown
Co-Chair MacLean Representative Foster
Representative Grussendorf Representative Therriault
Representative Hoffman Representative Martin
Representative Navarre Representative Parnell
Representative Hanley was not present for the meeting.
ALSO PRESENT
Edwin Gonlon, Superintendent, Northwest Arctic School
District, Kotzebue, Alaska; Dwayne Guiley, Director, School
Finance, Department of Education; Representative Bettye
Davis.
SUMMARY INFORMATION
HB 82 An Act relating to school construction grants and
major maintenance grants to school districts;
providing for school district participation in the
cost of school construction and major maintenance;
creating a major maintenance grant fund; and
providing for an effective date.
HB 82 was held in Committee for further
discussion.
HB 83 An Act making appropriations for construction and
major maintenance of schools; and providing for an
effective date.
HB 83 was held in Committee for further
discussion.
HOUSE BILL 82
"An Act relating to school construction grants and
1
major maintenance grants to school districts; providing
for school district participation in the cost of school
construction and major maintenance; creating a major
maintenance grant fund; and providing for an effective
date."
EDWIN GONLON, SUPERINTENDENT, NORTHWEST ARCTIC SCHOOL
DISTRICT, KOTZEBUE, ALASKA, addressed concerns regarding the
legislation. He noted that only a REAA would have the
opportunity to apply for a waiver. The Kotzebue area
contains the highest unemployment rate, per capita income is
low and the borough currently does not have a property
taxing system in place. The community does not have the
resources necessary to provide a match in order to be able
to participate in the construction process. In order to
receive a school construction or major maintenance grant, a
school district must provide a participating share of the
project cost.
Mr. Gonlon urged the Committee to consider amending Page 2,
Line 30 by deleting the language "regional educational
attendance area" and inserting "district". [Attachment #1].
DWAYNE GUILEY, DIRECTOR, SCHOOL FINANCE, DEPARTMENT OF
EDUCATION, provided the Committee a sectional analysis for
CS HB 82 (HES). He pointed out that the legislation
separates construction grants into two categories; grants
for school construction and grants for major maintenance of
school facilities. The legislative appropriations for the
two different types of school facility projects will go into
the appropriate fund and will be subject to the existing
grant procedures as indicated in AS 14.11.
Section 1 provides that the Department may not award a
school construction or major maintenance grant under AS
14.11 to a municipality that is a school district or a
REAA that is not in compliance with the insurance
requirements of AS 14.03.050 (a).
Section 2 extends the duties of the Department of
Education under AS 14.07.020 (a)(11) to include review
of major maintenance projects.
Section 3 establishes a major maintenance grant fund in
the general fund through legislative appropriations for
school major maintenance.
Section 4 amends the section on grant applications to
reflect the new major maintenance grant fund and
eliminates the reference to school construction.
2
Section 5 substitutes capital improvement project for
the term construction in reference to grants under AS
14.11.013 (a).
Section 6 amends AS 14.11.013 (b) to substitute the
term capital improvement project for construction and
by eliminating the term school construction.
Section 7 eliminates the term school construction in
reference to approval of a grant application. This
section would provide that the grants will be approved
only to the extent that money is available in the
appropriate fund.
Section 8 eliminates the term school construction under
grant conditions for a municipality that is a school
district or a REAA.
Section 9 adds a new subsection to allow the Department
by regulation to establish time periods for
establishing costs of school construction.
Section 10 eliminates the term school construction from
grant appropriation under AS 14.11.019 and substitutes
the terms capital improvement projects for
construction.
Section 11 changes the definition section. This
section would define "capital improvement project" to
mean to school construction or major maintenance. It
would define "grant" to mean a grant for school
construction or major maintenance.
Section 12 allows that changes made by this Act apply
to grants awarded under AS 14.11.005 - 019 after June
30, 1993.
Section 13 provides an effective date.
Representative Brown asked if the "cost of school
construction" would include the technology purchases of
computer systems. Mr. Guiley stated it would.
Representative Grussendorf pointed out that there is no
prioritization between construction and maintenance
projects. He recommended that legislation should encourage
maintenance rather than construction. Mr. Guiley stated
that HB 82 would allow the Legislature to concurrently fund
both types of projects. It will require the Department to
continue to prioritize projects. The Legislature then would
have the authority to tilt the funding.
Representative Martin advised that maintenance needs not be
3
funded through the capital budget. Mr. Guiley replied,
currently there are not any restrictions for categorical
expenditures associated with public school foundation
dollars. Money allocated to the school districts are
subject to the local school board for budget management.
There is no specific formula which provides for maintenance
activity.
Mr. Guiley stated that under current regulations, the
Department is required to put first, life, health and
safety. He added that the Department is anticipating
rewriting the regulations and the prioritization of
projects. All projects are rated in category types and are
ranked 1 - 7 in importance. That list is then published and
the Governor is then obligated by statute to include in the
capital appropriation bill a list of school construction
projects which are derived from the Department's lists.
(Tape Change, HFC 93 - 108, Side 1).
Mr. Guiley stated that the Department has prioritized
categories #1 & #2. Current law provides the opportunity
for the Legislature to make one appropriation to the
Department of Education.
The major maintenance projects are the ones listed on Page
4, Line 2 & 3. The school construction fund picks up the
other projects defined on Page 3, Sections (A), (B), (F) and
(G). Co-Chair MacLean understood that the legislation would
provide more flexibility to the priorities. Mr. Guiley
agreed.
Representative Hoffman asked why the first category is not
mandated. He pointed out that category addresses the health
and safety of the school children. Mr. Guiley stated that
the current statute does not give priority to any one
classification. The Department of Education does have
regulations which address that concern. Representative
Hoffman recommended not changing this structure.
Mr. Guiley stated that if HB 82 and HB 83 were to pass, the
Department of Education would completely fund all the life,
health and safety projects on the current list.
Representative Martin expressed concern that the legislation
could create incentive to incorporated areas to become
single site districts. Mr. Guiley stated that the proposed
legislation establishes the match based on an amount of
local wealth available for each community served. The size
of the school district is immaterial. The legislation would
not serve as an incentive for a district to incorporate.
The advantage to a district to be incorporated is the
4
ability to provide more to the students above the basic
needs. An REAA is restricted to funding only the "basic
need".
Co-Chair MacLean echoed Representative Martin's concerns and
referenced the handout provided by him. [Attachment #2].
Co-Chair MacLean asked if the fish tax and the forest
receipts had been taken into consideration of the wealth
factor in the determination for the match section. Mr.
Guiley stated that the federal forest receipts and fish tax
was not considered. The calculations were based upon the
taxable value of real and personal property located within
the district boundaries. The ability to come with a match
can originate from any other source other than grant funds.
Representative Hoffman asked under what circumstances could
a commissioner deny a waiver if a REAA were unable to
provide their participating share. Mr. Guiley replied those
situations would be arise when a REAA would have sufficient
fund balance in a capital project fund designated for future
construction and then that district wished to hold those
funds for use ofa different project. Discussion followed
regarding the qualifications of receiving a waiver. Mr.
Guiley added that with the passage of the legislation a
"waiver" will not be easy to get. Traditionally, REAA's
have set aside money to help with major projects, knowing
that they would not be funded through the capital funding
process. HB 82 and HB 83 would provide a vehicle from which
to fund major projects.
Representative Hoffman asked the Department's position
should the language on Page 3, Line 2 be changed from "may"
to "shall". Mr. Guiley advised that the determiniation
would no longer continue to be at the discretion of the
commissioner.
Co-Chair Larson stressed that the Department of Education
can not establish what is equitable in determining major
school construction. He noted that he supported the
legislation.
HB 82 was HELD in Committee for further discussion.
HOUSE BILL 83
"An Act making appropriations for construction and
major maintenance of schools; and providing for an
effective date."
Mr. Guiley provided the Committee a sectional analysis of CS
HB 83 (HES).
5
Section 1 appropriates $109,441,663 from the
constitutional budget reserve fund to the school
construction grant fund and allocates payments to
school districts and REAA's subject to grant
conditions.
Section 2 appropriates $41,819,937 from the
constitutional budget reserve fund to the major
maintenance grant fund and allocates payments to school
districts and REAA's subject to grant conditions.
Section 3 provides that appropriations under the Act
are for capital projects and are subject to the
provisions of AS 37.25.020 relating to unexpended
balances of appropriations for capital projects.
Section 4 provides for an effective date for sections
one and three of the Act.
Section 5 provides that section two takes effect on the
effective date of an Act creating a major maintenance
grant fund in AS 14.11.
HB 83 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting adjourned at 9:45 A.M.
HOUSE FINANCE COMMITTEE
APRIL 19, 1993
8:33 A.M.
TAPE HFC 93 - 107, Side 2, #000 - end.
TAPE HFC 93 - 108, Side 1, #000 - #496.
CALL TO ORDER
Co-Chair Ron Larson called the meeting of the House Finance
Committee to order at 8:33 A.M.
PRESENT
Co-Chair Larson Representative Brown
Co-Chair MacLean Representative Foster
Representative Grussendorf Representative Therriault
Representative Hoffman Representative Martin
Representative Navarre Representative Parnell
Representative Hanley was not present for the meeting.
6
ALSO PRESENT
Edwin Gonlon, Superintendent, Northwest Arctic School
District, Kotzebue, Alaska; Dwayne Guiley, Director, School
Finance, Department of Education; Representative Bettye
Davis.
SUMMARY INFORMATION
HB 82 An Act relating to school construction grants and
major maintenance grants to school districts;
providing for school district participation in the
cost of school construction and major maintenance;
creating a major maintenance grant fund; and
providing for an effective date.
HB 82 was held in Committee for further
discussion.
HB 83 An Act making appropriations for construction and
major maintenance of schools; and providing for an
effective date.
HB 83 was held in Committee for further
discussion.
HOUSE BILL 82
"An Act relating to school construction grants and
major maintenance grants to school districts; providing
for school district participation in the cost of school
construction and major maintenance; creating a major
maintenance grant fund; and providing for an effective
date."
EDWIN GONLON, SUPERINTENDENT, NORTHWEST ARCTIC SCHOOL
DISTRICT, KOTZEBUE, ALASKA, addressed concerns regarding the
legislation. He noted that only a REAA would have the
opportunity to apply for a waiver. The Kotzebue area
contains the highest unemployment rate, per capita income is
low and the borough currently does not have a property
taxing system in place. The community does not have the
resources necessary to provide a match in order to be able
to participate in the construction process. In order to
receive a school construction or major maintenance grant, a
school district must provide a participating share of the
project cost.
Mr. Gonlon urged the Committee to consider amending Page 2,
Line 30 by deleting the language "regional educational
attendance area" and inserting "district". [Attachment #1].
7
DWAYNE GUILEY, DIRECTOR, SCHOOL FINANCE, DEPARTMENT OF
EDUCATION, provided the Committee a sectional analysis for
CS HB 82 (HES). He pointed out that the legislation
separates construction grants into two categories; grants
for school construction and grants for major maintenance of
school facilities. The legislative appropriations for the
two different types of school facility projects will go into
the appropriate fund and will be subject to the existing
grant procedures as indicated in AS 14.11.
Section 1 provides that the Department may not award a
school construction or major maintenance grant under AS
14.11 to a municipality that is a school district or a
REAA that is not in compliance with the insurance
requirements of AS 14.03.050 (a).
Section 2 extends the duties of the Department of
Education under AS 14.07.020 (a)(11) to include review
of major maintenance projects.
Section 3 establishes a major maintenance grant fund in
the general fund through legislative appropriations for
school major maintenance.
Section 4 amends the section on grant applications to
reflect the new major maintenance grant fund and
eliminates the reference to school construction.
Section 5 substitutes capital improvement project for
the term construction in reference to grants under AS
14.11.013 (a).
Section 6 amends AS 14.11.013 (b) to substitute the
term capital improvement project for construction and
by eliminating the term school construction.
Section 7 eliminates the term school construction in
reference to approval of a grant application. This
section would provide that the grants will be approved
only to the extent that money is available in the
appropriate fund.
Section 8 eliminates the term school construction under
grant conditions for a municipality that is a school
district or a REAA.
Section 9 adds a new subsection to allow the Department
by regulation to establish time periods for
establishing costs of school construction.
8
Section 10 eliminates the term school construction from
grant appropriation under AS 14.11.019 and substitutes
the terms capital improvement projects for
construction.
Section 11 changes the definition section. This
section would define "capital improvement project" to
mean to school construction or major maintenance. It
would define "grant" to mean a grant for school
construction or major maintenance.
Section 12 allows that changes made by this Act apply
to grants awarded under AS 14.11.005 - 019 after June
30, 1993.
Section 13 provides an effective date.
Representative Brown asked if the "cost of school
construction" would include the technology purchases of
computer systems. Mr. Guiley stated it would.
Representative Grussendorf pointed out that there is no
prioritization between construction and maintenance
projects. He recommended that legislation should encourage
maintenance rather than construction. Mr. Guiley stated
that HB 82 would allow the Legislature to concurrently fund
both types of projects. It will require the Department to
continue to prioritize projects. The Legislature then would
have the authority to tilt the funding.
Representative Martin advised that maintenance needs not be
funded through the capital budget. Mr. Guiley replied,
currently there are not any restrictions for categorical
expenditures associated with public school foundation
dollars. Money allocated to the school districts are
subject to the local school board for budget management.
There is no specific formula which provides for maintenance
activity.
Mr. Guiley stated that under current regulations, the
Department is required to put first, life, health and
safety. He added that the Department is anticipating
rewriting the regulations and the prioritization of
projects. All projects are rated in category types and are
ranked 1 - 7 in importance. That list is then published and
the Governor is then obligated by statute to include in the
capital appropriation bill a list of school construction
projects which are derived from the Department's lists.
(Tape Change, HFC 93 - 108, Side 1).
Mr. Guiley stated that the Department has prioritized
categories #1 & #2. Current law provides the opportunity
9
for the Legislature to make one appropriation to the
Department of Education.
The major maintenance projects are the ones listed on Page
4, Line 2 & 3. The school construction fund picks up the
other projects defined on Page 3, Sections (A), (B), (F) and
(G). Co-Chair MacLean understood that the legislation would
provide more flexibility to the priorities. Mr. Guiley
agreed.
Representative Hoffman asked why the first category is not
mandated. He pointed out that category addresses the health
and safety of the school children. Mr. Guiley stated that
the current statute does not give priority to any one
classification. The Department of Education does have
regulations which address that concern. Representative
Hoffman recommended not changing this structure.
Mr. Guiley stated that if HB 82 and HB 83 were to pass, the
Department of Education would completely fund all the life,
health and safety projects on the current list.
Representative Martin expressed concern that the legislation
could create incentive to incorporated areas to become
single site districts. Mr. Guiley stated that the proposed
legislation establishes the match based on an amount of
local wealth available for each community served. The size
of the school district is immaterial. The legislation would
not serve as an incentive for a district to incorporate.
The advantage to a district to be incorporated is the
ability to provide more to the students above the basic
needs. An REAA is restricted to funding only the "basic
need".
Co-Chair MacLean echoed Representative Martin's concerns and
referenced the handout provided by him. [Attachment #2].
Co-Chair MacLean asked if the fish tax and the forest
receipts had been taken into consideration of the wealth
factor in the determination for the match section. Mr.
Guiley stated that the federal forest receipts and fish tax
was not considered. The calculations were based upon the
taxable value of real and personal property located within
the district boundaries. The ability to come with a match
can originate from any other source other than grant funds.
Representative Hoffman asked under what circumstances could
a commissioner deny a waiver if a REAA were unable to
provide their participating share. Mr. Guiley replied those
situations would be arise when a REAA would have sufficient
fund balance in a capital project fund designated for future
construction and then that district wished to hold those
10
funds for use ofa different project. Discussion followed
regarding the qualifications of receiving a waiver. Mr.
Guiley added that with the passage of the legislation a
"waiver" will not be easy to get. Traditionally, REAA's
have set aside money to help with major projects, knowing
that they would not be funded through the capital funding
process. HB 82 and HB 83 would provide a vehicle from which
to fund major projects.
Representative Hoffman asked the Department's position
should the language on Page 3, Line 2 be changed from "may"
to "shall". Mr. Guiley advised that the determiniation
would no longer continue to be at the discretion of the
commissioner.
Co-Chair Larson stressed that the Department of Education
can not establish what is equitable in determining major
school construction. He noted that he supported the
legislation.
HB 82 was HELD in Committee for further discussion.
HOUSE BILL 83
"An Act making appropriations for construction and
major maintenance of schools; and providing for an
effective date."
Mr. Guiley provided the Committee a sectional analysis of CS
HB 83 (HES).
Section 1 appropriates $109,441,663 from the
constitutional budget reserve fund to the school
construction grant fund and allocates payments to
school districts and REAA's subject to grant
conditions.
Section 2 appropriates $41,819,937 from the
constitutional budget reserve fund to the major
maintenance grant fund and allocates payments to school
districts and REAA's subject to grant conditions.
Section 3 provides that appropriations under the Act
are for capital projects and are subject to the
provisions of AS 37.25.020 relating to unexpended
balances of appropriations for capital projects.
Section 4 provides for an effective date for sections
one and three of the Act.
Section 5 provides that section two takes effect on the
effective date of an Act creating a major maintenance
11
grant fund in AS 14.11.
HB 83 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting adjourned at 9:45 A.M.
12
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