Legislature(1995 - 1996)

04/27/1995 07:05 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
           HOUSE LABOR & COMMERCE STANDING COMMITTEE                           
                         April 27, 1995                                        
                           7:05 p.m.                                           
 MEMBERS PRESENT                                                               
 Representative Pete Kott, Chairman                                            
 Representative Norman Rokeberg, Vice Chair                                    
 Representative Beverly Masek                                                  
 Representative Jerry Sanders                                                  
 Representative Brian Porter                                                   
 Representative Kim Elton                                                      
 Representative Gene Kubina                                                    
 MEMBERS ABSENT                                                                
 COMMITTEE CALENDAR                                                            
 HB 260:   "An Act relating to marine pilots and the Board of Marine           
           Pilots; extending the termination date of the Board of              
           Marine Pilots; and providing for an effective date."                
           CSHB 260(L&C) PASSED OUT OF COMMITTEE                               
 HB 243:   "An Act relating to licensure of landscape architects."             
           PASSED OUT OF COMMITTEE                                             
 HB 232:   "An Act establishing an economic development tax credit;            
           and providing for an effective date."                               
           PASSED OUT OF COMMITTEE                                             
 HB 217:   "An Act relating to employment of teachers."                        
           HEARD AND HELD                                                      
 WITNESS REGISTER                                                              
 DEIRDE P. BUSCHMANN                                                           
 P.O. Box 1367                                                                 
 Petersburg, Alaska  99833                                                     
 Telephone:  (907) 772-3008                                                    
 POSITION STATEMENT:  Testified in support of HB 243                           
 SHARON MACKLIN, Lobbyist                                                      
 Alaska Professional Design Council                                            
 315 5th Street, No. 8                                                         
 Juneau, Alaska  99801                                                         
 Telephone:  (907) 586-9518                                                    
 POSITION STATEMENT:  Testified on HB 243                                      
 CATHERINE REARDON, Director                                                   
 Division of Occupational Licensing                                            
 Department of Commerce & Economic Development                                 
 P.O. Box 110806                                                               
 Juneau, Alaska  99811-0806                                                    
 Telephone:  (907) 465-2538                                                    
 POSITION STATEMENT:  Answered a question on HB 243                            
 ROD MOURANT, Administrative Assistant                                         
 Representative Pete Kott                                                      
 Alaska State Legislature                                                      
 Capitol Building, Room 432                                                    
 Juneau, Alaska  99801-1182                                                    
 Telephone:  (907) 465-3777                                                    
 POSITION STATEMENT:  Introduced HB 232 and CSHB 217(L&C)                      
 BOB BARTHOLOMEW, Deputy Director                                              
 Division of Income & Excise Audit                                             
 Department of Revenue                                                         
 P.O. Box 110420                                                               
 Juneau, Alaska  99811-0420                                                    
 Telephone:  (907) 465-2320                                                    
 POSITION STATEMENT:  Testified on HB 232                                      
 REPRESENTATIVE IVAN IVAN                                                      
 Alaska State Legislature                                                      
 State Capitol, Room 503                                                       
 Juneau, Alaska  99801-1182                                                    
 Telephone:  (907) 465-4942                                                    
 POSITION STATEMENT:  Prime sponsor of HB 217                                  
 WHITNEY AILLAUD                                                               
 P.O. Box 1245                                                                 
 Delta Junction, Alaska  99737                                                 
 Telephone:  (907) 895-4286                                                    
 POSITION STATEMENT:  Opposed HB 217                                           
 MARY BOHANAN                                                                  
 P.O. Box 1164                                                                 
 Delta Junction, Alaska  99737                                                 
 Telephone:  (907) 895-4379                                                    
 POSITION STATEMENT:  Opposed HB 217                                           
 CARL ROSE, Executive Director                                                 
 Association of Alaska Boards                                                  
 316 West 11th Street                                                          
 Juneau, Alaska  99801-1510                                                    
 Telephone:  (907) 586-1083                                                    
 POSITION STATEMENT:  Testified on HB 217                                      
 JIM SIMEROTH                                                                  
 811 Auk Street, No. 5                                                         
 Kenai, Alaska  99611                                                          
 Telephone:  (907) 283-4368                                                    
 POSITION STATEMENT:  Opposed HB 217                                           
 TRENA RICHARDSON                                                              
 Box 2278                                                                      
 Soldotna, Alaska  99669                                                       
 Telephone:  (907) 262-7404                                                    
 POSITION STATEMENT:  Opposed HB 217                                           
 DON OBERG                                                                     
 Box 921                                                                       
 Kenai, Alaska  99611                                                          
 Telephone:  (907) 283-4233                                                    
 POSITION STATEMENT:  Testified on HB 217                                      
 PREVIOUS ACTION                                                               
 BILL:  HB 260                                                               
 SHORT TITLE: MARINE PILOTS                                                    
 SPONSOR(S): TRANSPORTATION                                                    
 JRN-DATE     JRN-PG               ACTION                                      
 03/15/95       745    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/15/95       745    (H)   TRANSPORTATION, LABOR & COMMERCE                  
 03/22/95              (H)   TRA AT 01:00 PM CAPITOL 17                        
 03/22/95              (H)   MINUTE(TRA)                                       
 03/24/95              (H)   TRA AT 01:00 PM CAPITOL 17                        
 04/05/95              (H)   TRA AT 01:00 PM CAPITOL 17                        
 04/05/95              (H)   MINUTE(TRA)                                       
 04/07/95      1170    (H)   TRA RPT  CS(TRA) 2DP 2NR 2AM                      
 04/07/95      1171    (H)   DP: BRICE, WILLIAMS                               
 04/07/95      1171    (H)   NR: MACLEAN, SANDERS                              
 04/07/95      1171    (H)   AM: JAMES, G.DAVIS                                
 04/07/95      1171    (H)   FISCAL NOTE (DCED)                                
 04/12/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 04/12/95              (H)   MINUTE(L&C)                                       
 04/18/95      1356    (H)   FIN REFERRAL ADDED                                
 04/19/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 04/21/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 04/26/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 04/26/95              (H)   MINUTE(L&C)                                       
 04/27/95              (H)   L&C AT 07:00 PM CAPITOL 17                        
 BILL:  HB 243                                                                
 SPONSOR(S): LABOR & COMMERCE                                                  
 JRN-DATE     JRN-PG               ACTION                                      
 03/08/95       644    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/08/95       644    (H)   STATE AFFAIRS, LABOR & COMMERCE                   
 03/23/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 03/23/95              (H)   MINUTE(STA)                                       
 03/24/95       893    (H)   STA RPT 1DP 5NR                                   
 03/24/95       893    (H)   DP: ROBINSON                                      
 03/24/95       893    (H)   NR: JAMES, WILLIS, IVAN, GREEN,                   
 03/24/95       894    (H)   FISCAL NOTE (DCED)                                
 04/12/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 04/12/95              (H)   MINUTE(L&C)                                       
 04/26/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 04/26/95              (H)   MINUTE(L&C)                                       
 04/27/95              (H)   L&C AT 07:00 PM CAPITOL 17                        
 BILL:  HB 232                                                                
 SHORT TITLE: ECONOMIC DEVELOPMENT TAX CREDIT                                  
 SPONSOR(S): REPRESENTATIVE(S) KOTT                                            
 JRN-DATE     JRN-PG               ACTION                                      
 03/06/95       590    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/06/95       590    (H)   ECD, STA, L&C, FINANCE                            
 03/21/95              (H)   ECD AT 09:00 AM CAPITOL 17                        
 03/21/95              (H)   MINUTE(ECD)                                       
 03/22/95       850    (H)   ECD RPT  CS(ECD) 6DP                              
 03/22/95       850    (H)   DP: KELLY,MOSES,MACLEAN,KOHRING                   
 03/22/95       850    (H)   DP: SANDERS, ROKEBERG                             
 03/22/95       850    (H)   INDETERMINATE FISCAL NOTE (REV)                   
 03/22/95       850    (H)   FISCAL NOTE (DCED)                                
 04/04/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 04/04/95              (H)   MINUTE(STA)                                       
 04/06/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 04/06/95              (H)   MINUTE(STA)                                       
 04/11/95              (H)   STA AT 08:00 AM CAPITOL 102                       
 04/11/95              (H)   MINUTE(STA)                                       
 04/18/95      1345    (H)   STA RPT  CS(STA) 4DP 2NR                          
 04/18/95      1346    (H)   DP: GREEN, PORTER, JAMES, OGAN                    
 04/18/95      1346    (H)   NR: WILLIS, ROBINSON                              
 04/18/95      1346    (H)   INDETERMINATE FISCAL NOTE (REV)                   
 04/18/95      1346    (H)   ZERO FISCAL NOTE (DCED)                           
 04/21/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 04/24/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 04/24/95              (H)   MINUTE(L&C)                                       
 04/26/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 04/26/95              (H)   MINUTE(L&C)                                       
 04/27/95              (H)   L&C AT 07:00 PM CAPITOL 17                        
 BILL:  HB 217                                                                
 SPONSOR(S): REPRESENTATIVE(S) IVAN                                            
 JRN-DATE     JRN-PG               ACTION                                      
 03/01/95       531    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 03/01/95       531    (H)   HES, JUDICIARY                                    
 03/07/95              (H)   HES AT 03:00 PM CAPITOL 106                       
 03/07/95              (H)   MINUTE(HES)                                       
 03/29/95              (H)   HES AT 03:00 PM CAPITOL 106                       
 04/11/95              (H)   HES AT 02:00 PM CAPITOL 106                       
 04/13/95              (H)   HES AT 02:00 PM CAPITOL 106                       
 04/13/95              (H)   MINUTE(HES)                                       
 04/18/95      1344    (H)   HES RPT  CS(HES) NT 2DP 1NR 1AM                   
 04/18/95      1344    (H)   DP: BUNDE, TOOHEY                                 
 04/18/95      1345    (H)   NR: G.DAVIS                                       
 04/18/95      1345    (H)   AM: ROBINSON                                      
 04/18/95      1345    (H)   FISCAL NOTE (DOE)                                 
 04/19/95              (H)   JUD AT 01:00 PM CAPITOL 120                       
 04/20/95      1408    (H)   L&C REFERRAL ADDED                                
 04/21/95              (H)   JUD AT 01:00 PM CAPITOL 120                       
 04/21/95              (H)   MINUTE(JUD)                                       
 04/22/95      1446    (H)   JUD RPT  CS(JUD) NT 5DP 1DNP                      
 04/22/95      1446    (H)   DP: VEZEY, PORTER, GREEN, BUNDE,                  
 04/22/95      1446    (H)   DNP: FINKELSTEIN                                  
 04/22/95      1446    (H)   ZERO FISCAL NOTE (DOE)                            
 04/26/95              (H)   L&C AT 03:00 PM CAPITOL 17                        
 04/26/95              (H)   MINUTE(L&C)                                       
 04/27/95              (H)   L&C AT 07:00 PM CAPITOL 17                        
 ACTION NARRATIVE                                                              
 TAPE 95-47, SIDE A                                                            
 Number 001                                                                    
 The House Labor and Commerce Standing Committee was called to order           
 by Chairman Pete Kott at 7:05 p.m.  Members present at the call to            
 order were Representatives Kott, Masek, Sanders, Porter, Elton and            
 Kubina.   He announced the agenda for the meeting was HB 260, HB
 243, HB 232 and HB 217.                                                       
 HB 260 - MARINE PILOTS                                                      
 CHAIRMAN PETE KOTT  said the last time HB 260 was discussed in the            
 Labor & Commerce Committee, there was an amendment that was being             
 drafted.  Chairman Kott said he had opted to withdraw that                    
 amendment at this time.  He said the original bill will be replaced           
 with the CSHB 260(TRA), as amended.  Chairman Kott noted the bill             
 would become CSHB 260(L&C).                                                   
 REPRESENTATIVE JERRY SANDERS made a motion to adopt CSHB 260(L&C).            
 CHAIRMAN KOTT noted CSHB 260(L&C) consists of the same language as            
 CSHB 260(TRA) with the three amendments that were made to the bill.           
 He said there was a motion to adopt the new CSHB 260(L&C), which is           
 the amended version of the Transportation Committee Substitute.               
 REPRESENTATIVE BRIAN PORTER said as he understood it, the new                 
 version did not include a maximum tariff, a fixed tariff, or a                
 CHAIRMAN KOTT stated that was correct.  There is no language that             
 addresses either/or any of those.                                             
 REPRESENTATIVE KIM ELTON asked what version of the bill was being             
 REPRESENTATIVE GENE KUBINA said the amendments are not incorporated           
 CHAIRMAN KOTT said the amendments would be incorporated into a                
 Labor & Commerce Committee Substitute.                                        
 REPRESENTATIVE KUBINA asked what the two amendments were that did             
 CHAIRMAN KOTT responded there were three amendments offered.                  
 Maximum tariff which was amendment one and that was rejected.                 
 Amendment two took the bill back to the original state as it                  
 related to the number of members on the board.  He said we                    
 decreased that to its present state, as it currently stands.                  
 Amendment three which was adopted, addressed the reissuance or                
 renewal of a temporary license for emergency purposes to ensure               
 that the commissioner, after that one year, can extend the                    
 temporary license if that same condition exists.  Chairman Kott               
 said there was a motion before the committee to adopt the Labor &             
 Commerce Committee Substitute, as amended.  He asked if there was             
 any objection.  Hearing none, the motion passed.                              
 REPRESENTATIVE SANDERS made a motion to move CSHB 260(L&C) from               
 committee with individual recommendations and the accompanying                
 fiscal note.                                                                  
 REPRESENTATIVE PORTER objected.  He stated he has gone back and               
 forth on this bill, and after hearing all the testimony he did not            
 feel that an equitable situation had been created between the                 
 pilots and the shippers.  He felt that without some provision to              
 guide the resolution of a wage dispute or to set a maximum tariff             
 or a tariff, that we're saying in effect by state law, "you must do           
 this, but we're going to put you at the mercy of those that we                
 require you to put on your ships."                                            
 REPRESENTATIVE ELTON asked for clarification as to what was being             
 moved from Committee.  He thought he understood Chairman Kott to              
 say what they were going to move out...they were going to address             
 two of the amendments.  One to restore the board of its original              
 state.  His understanding was the motion is to move the bill that             
 does not restore the board to its original state.  He asked if that           
 was correct.                                                                  
 CHAIRMAN KOTT responded no, and directed Representative Elton's               
 attention to page 1, line 9 and said they added three, but now it             
 is back to two.  He emphasized it was amendment two that was                  
 adopted.  Amendment one was the maximum tariff.                               
 Number 133                                                                    
 REPRESENTATIVE KUBINA said he had tried to get all the groups                 
 together since last week to reach a consensus, and felt that he was           
 unable to do so.  He said since he was unsuccessful in getting a              
 consensus, he didn't want to put himself in the middle any longer             
 and he would support moving the bill and the motion.                          
 CHAIRMAN KOTT stated there had been a lot of effort on a number of            
 people's behalf, and he agreed with Representative Kubina.  He said           
 members of the previous committee had expressed frustration because           
 this bill had been in their committee for over a month while they             
 were trying to address the issues, and they didn't reach agreement            
 REPRESENTATIVE SANDERS said he had been on the other committee, and           
 he could verify Chairman Kott's comments.  He stressed that the               
 bill has gone through many changes, and it is a better bill now               
 than what it was.  He felt it was time to move the bill on.                   
 Number 169                                                                    
 REPRESENTATIVE ELTON commented he would not object to moving the              
 bill out of committee, but stated, "we are the Labor & Commerce               
 Committee and maybe one of the reasons we can never come to                   
 resolution, is because we don't hold on to things long enough to              
 make the interested parties think we are serious about dealing with           
 it in the best way possible, and we have."  He has heard from a               
 number of different people regarding what the best way to do this             
 REPRESENTATIVE NORMAN ROKEBERG felt the committee has really tried            
 to work with this issue to find some clarity and certainty.  He               
 stated it was one of the most difficult problems he had encountered           
 in the legislature.  It is his belief that arms-length transactions           
 can be conducted and those contracts can be negotiated between                
 business entities, not between labor and management, but two                  
 different business entities.  He expressed uncertainty about his              
 vote on this issue and that uncertainty troubles him.                         
 CHAIRMAN KOTT felt the troubling area with this issue is there was            
 no road; you either have one or the other and it's difficult to               
 grasp for something in the middle.                                            
 CHAIRMAN KOTT said there was a motion to move the bill out of                 
 committee with individual recommendations and there is objection.             
 A roll call vote was taken.  Representatives Kott, Sanders, Elton,            
 Kubina, Rokeberg and Masek voted yes.  Representative Porter voted            
 no.  CSHB 260(L&C) passed out of the House Labor & Commerce                   
 HB 243 - LICENSING OF LANDSCAPE ARCHITECTS                                  
 Number 220                                                                    
 CHAIRMAN KOTT said HB 243 was heard in committee the previous day,            
 but was held over for additional testimony.  He announced that                
 Deirde Buschmann was waiting to testified via teleconference from             
 Number 224                                                                    
 DEIRDE BUSCHMANN said she practiced as a landscape architect in the           
 Forest Service for 13 years and recently started her own practice.            
 She felt the registration of landscape architects in the state of             
 Alaska will provide a number of positive benefits including                   
 improved safety and design of parks, playgrounds and other places             
 of public use, design consistency in the application of the                   
 Americans with Disabilities Act, and professional recognition of              
 the of (indisc.) knowledge and abilities that landscape architects            
 provide the public.  She said passage of this legislation will                
 bring Alaska in line with 45 other states and put Alaska on equal             
 footing with other design professionals in the state.                         
 CHAIRMAN KOTT asked if the committee members had any questions for            
 Ms. Buschmann.  Hearing none, he asked if there were additional               
 people to testify on HB 243.                                                  
 Number 247                                                                    
 REPRESENTATIVE SANDERS made a motion to move HB 243 with individual           
 recommendations and accompanying fiscal notes.                                
 REPRESENTATIVE ELTON objected for discussion purposes.  He asked              
 how many people will be registered and how many people will fall              
 out of the system because they can't get registered.                          
 Number 258                                                                    
 SHARON MACKLIN, Representative, Alaska Professional Design Council,           
 responded that about 50 people statewide would want to be licensed.           
 CHAIRMAN KOTT inquired as to how many might fall out of the system.           
 MS. MACKLIN requested clarification on the term "fall out."                   
 REPRESENTATIVE ELTON said he was referring to how many people would           
 not be able to provide the same service they are currently                    
 providing because of a licensing requirement.  He asked if there              
 are any people that are now doing this kind of work that may not be           
 able to be licensed as a result of this legislation passing?                  
 MS. MACKLIN commented she didn't have a clear answer for the                  
 committee, but didn't think there would be any.  She mentioned that           
 Catherine Reardon may be able to respond to the question.                     
 CATHERINE REARDON, Director, Division of Occupational Licensing,              
 Department of Commerce & Economic Development, said she did not               
 have a clear answer either.                                                   
 REPRESENTATIVE KUBINA asked what is it going to take now to be                
 certified by the board as a landscape architect?                              
 MS. MACKLIN responded one of the qualifications is a national test            
 and then the Board of Registration will set up their own criteria,            
 as they do now for architects, engineers and land surveyors.  She             
 gave an example of why the council feels it is in the best interest           
 of public safety to be licensed.  Several years ago, an individual            
 was killed while riding his bike down the West High/Westchester               
 Lagoon bike trail.  They determined the reason for the accident was           
 the incline was too steep and it hadn't been designed to a scale              
 that was safe.  That was one example in Alaska of why we need                 
 people to design projects that are safe for the entire public.                
 Number 295                                                                    
 REPRESENTATIVE KUBINA commented on creating another bureaucracy for           
 another group of people in our state.  He added that he was a                 
 landscaper for four years while working his way through college.              
 He put in sprinkler systems, designed lawns, etc.  At that time he            
 did not have to pass any test, but stood by his work and developed            
 a good reputation.  He felt the people who are proposing these                
 changes admit that these landscape architects do not reach the                
 standards of architects and engineers, and are admitting it by                
 saying they are going to have somebody on this board, but they                
 don't have a vote.  He stressed his feelings of creating another              
 obstacle for those people who are enthusiastic and trying to make             
 a living and this would put up more roadblocks to those                       
 individuals.  He explained that his comments were not directed at             
 Ms. Macklin.  He was not going to hold the bill up but stressed it            
 was just another case of creating more bureaucracy and roadblocks,            
 while at the same time talking about decreasing the size of                   
 MS. MACKLIN referenced Representative Kubina's comments relating to           
 the person on the board, and said that person was only going to be            
 appointed for a short period of time during which regulations would           
 be drafted for landscape architects.  She reiterated they would not           
 be a permanent person on the board; that is why they were not given           
 a vote.  She added at the end of the bill there is a list of                  
 exemptions; people who don't have to be registered and can continue           
 to provide a variety of services; e.g., gardeners putting in flower           
 beds, taking care of landscaping per se, etc.  Individuals would              
 have to be registered in very specific cases.                                 
 Number 344                                                                    
 CHAIRMAN KOTT said there is a motion before the committee to move             
 HB 243 with individual recommendations and accompanying fiscal                
 notes.  He asked if there were any objections.  Hearing none, HB
 243 was moved from the House Labor & Commerce Committee.                      
 HB 232 - ECONOMIC DEVELOPMENT TAX CREDIT                                    
 Number 353                                                                    
 ROD MOURANT, Administrative Assistant to Chairman Pete Kott, said             
 this legislation is an important part of the economic development             
 package the legislature is considering this year.  House Bill 232             
 empowers the Alaska Industrial Development & Export Authority                 
 (AIDEA) to review proposals from corporations in Alaska, either               
 currently in Alaska or considering moving to Alaska, and their                
 proposal would be to either expand an existing business and number            
 of positions, or to create a new business and positions in-state.             
 AIDEA would be able to determine if, in fact, that corporation is             
 eligible to qualify for an economic development tax credit based on           
 that presentation from the corporation and within the criteria laid           
 out by the legislation.  If they are, to what degree and to what              
 amount they would be credited.  The corporation then would receive            
 a certificate of authorization and would have ten consecutive tax             
 years in which to apply the credit toward their tax obligation.  He           
 said Section 1 defines the program.  The more operative portions of           
 the legislation are in Section 2 where the tax credit itself is               
 talked about and the criteria that should be considered by AIDEA in           
 establishing whether or not an entity is eligible for the tax                 
 credit and to what degree that tax credit could be.  He referred to           
 page 3 and said one of the criteria is that the applicant's project           
 will upon completion provide a net increase of at least 25 percent            
 in the number of new employees employed by the applicant.                     
 Likewise, value added processing should be encouraged in this type            
 of expansion, so we could look for more value added processing,               
 both in the timber and seafood industry in the state, as a result             
 of HB 232.  Page 4, lines 6-12 states, "The credit amount may not             
 exceed the lesser of the amount of credit approved which may not              
 exceed 5 percent of the amount of gross wages payable as                      
 compensation for the new employees created by this expansion                  
 effort, or 25 percent of the tax due and payable by the taxpayer              
 under this chapter."  He noted this chapter is the net corporate              
 tax statute of the state of Alaska.  He said in essence, that is              
 the legislation and what it does.  AIDEA will review the                      
 legislation on an annual basis.  He added they have been working              
 with both AIDEA and the Department of Revenue on this legislation.            
 They have further changes they would like made, as you will hear              
 from the representative from the Department of Revenue.  They would           
 like the reporting mechanisms and the monitoring mechanisms laid              
 out in statute, rather than left to regulation.  He stated they               
 would be working with the Department of Revenue to develop the                
 language in that regard.  Mr. Mourant said he was available for               
 REPRESENTATIVE KUBINA asked if this bill had a Finance Committee              
 MR. MOURANT responded it does.  The current fiscal notes are zero.            
 He said he would anticipate in working out the arrangements with              
 the Department of Revenue, especially on what their review and                
 reporting requirements are, there may be a small fiscal note                  
 attached to the legislation before it is over.  He reiterated that            
 it does have a Finance Committee referral.                                    
 CHAIRMAN KOTT said this bill has undergone a little surgery during            
 the process.  He believed this was the third committee of referral;           
 the first two being the State Affairs Committee and the Special               
 Committee on Commerce and Economic Development.                               
 Number 409                                                                    
 REPRESENTATIVE ELTON commented the legislation that he was familiar           
 with that has done this in the past, is the fisheries business tax            
 credit.  He believed that tax credit was sunsetted after a certain            
 period of time.  He pointed out this bill does not have a sunset              
 provision and wondered what the reasoning was behind not having a             
 sunset provision.                                                             
 CHAIRMAN KOTT said first of all, there is a ten year provision in             
 the bill which will allow corporations or companies to claim that             
 tax credit, so any kind of a sunset will have to be factored it out           
 ten years.  Beyond that, he thought the importance of it is that as           
 Alaska is starting to retract, at least in the oil industry, we               
 want to ensure that we do other things that will attract new                  
 business to the state, and that message needs to be out there.  He            
 said if at some point in time it looks like it needs to be                    
 revisited, he was sure the legislature, at that point, will do so.            
 Chairman Kott commented that he has never really been much in favor           
 of a sunsetting clause.                                                       
 REPRESENTATIVE ELTON said he thought there were probably technical            
 ways.  Once a person is in the program maybe they are not taken               
 away, but to preclude new people from joining.  From what he                  
 remembered of the previous debate on the fisheries tax credit,                
 there was some strong suspicion on the part of many people in the             
 Department of Revenue, as well as others, that what the state was             
 actually doing was forgiving taxes on either new businesses or                
 business expansion that was going to occur anyway.  He wondered if            
 that issue had been considered.                                               
 MR. MOURANT said page 2 of the legislation refers to the criteria             
 for eligibility for the tax credit.  In the first section of                  
 possible criteria to be applied against a project it states,                  
 "verification that at least one other state is considering the                
 project and also determining through the best available data that             
 the projected cost of the applicant's project in this state would             
 exceed the cost in the competitive state."  Likewise, as a third              
 portion of just that one individual criteria, is we find that the             
 receipt from the tax credit is a major factor in the applicant's              
 decision to proceed.  He explained there are several variables that           
 would lead one to believe that something wasn't going to happen               
 automatically if they have got to justify to AIDEA that these                 
 criteria have been met - that there is competition of a state, and            
 the bottom line is they needed assistance through a tax credit.               
 Number 446                                                                    
 REPRESENTATIVE PORTER commented on the four year sunset in the                
 fisheries program, and said assuming that fisheries is not an                 
 infinite resource and that at some point in time, there's only so             
 much you can do with x number of fish.  Whereas business is                   
 business is business, if there are other opportunities that are               
 REPRESENTATIVE ELTON said the response by Mr. Mourant essentially             
 would preclude almost any resource based industry, because a                  
 resource based industry that is coming into the state, is making a            
 decision based on where the resource is and the amount of the                 
 resource available, so you wouldn't have that criteria kick into              
 place between what another state may be offering or not.  If that             
 is a rigid criteria that cannot be breached by AIDEA, we are                  
 essentially talking about service businesses only.  He asked if               
 that was correct.                                                             
 MR. MOURANT responded that was correct, if that particular portion            
 of criteria were applied, but pointed out there are three                     
 independent possible criteria that could be applied independently.            
 Not all three have to be met.  The second criteria on page 3, line            
 9 states, "The applicant's project would upon completion provide a            
 net increase of at least 25 percent in the number of new employees            
 employed by the applicant."  He noted that really isn't industry              
 restrictive at all.  Likewise, the third criteria states, "The                
 applicant's project is economically sound and will upon completion            
 benefit the people of the state by increasing opportunities for               
 employment in the state and strengthening the economy of the state            
 and significantly expanding existing facilities in the state."                
 He explained that the criteria regarding the 25 percent and the               
 third one regarding the substantial increase, are independent                 
 criteria.  Meeting any one of those three criteria would qualify              
 the program for consideration.                                                
 REPRESENTATIVE ROKEBERG referred to the basic criterion and asked             
 if it was conceivable that a new entry into the oil and gas                   
 industry would apply for this credit.                                         
 MR. MOURANT said that would not be beyond the realm of                        
 comprehension.  However, trying to justify, given Alaska's resource           
 richness especially with oil and gas, that they were in competition           
 in another state...although they would reach the criteria of the 25           
 percent increase perhaps, or the substantial increase of facility,            
 this certainly could be taken under consideration by AIDEA, but the           
 AIDEA board would have the ultimate authority.                                
 Number 483                                                                    
 REPRESENTATIVE ROKEBERG said that would be the question, that is              
 why he said a new entry into the market.  A case to be made is that           
 a company that has a certain investment capital in the budget,                
 looks in Alaska as well as another state, but will come to Alaska             
 if they can get this break.  He asked if that was the idea?                   
 MR. MOURANT responded that is exactly the idea.                               
 Number 489                                                                    
 REPRESENTATIVE ELTON said if he understood correctly, it seems that           
 AIDEA is required to make these determinations, and yet there is a            
 zero fiscal note for AIDEA.  He could think of numerous businesses            
 all of whom will look at this bill and say they were going to add             
 another wing on, going to expand production capacity, etc.  He felt           
 that AIDEA and AIDEA staff were going to be overwhelmed with                  
 applications, and yet there is a zero fiscal note.                            
 MR. MOURANT acknowledged that had been a topic of conversation, but           
 AIDEA is satisfied that under the current criteria, they will be              
 able to do the elementary reviews.  He had spoken with both the               
 project manager for AIDEA and the executive director of AIDEA; both           
 of them are comfortable with the zero fiscal note, at least with              
 this version of the bill.                                                     
 REPRESENTATIVE ELTON said if that was the case, they must be                  
 overstaffed and underworked.  He thought the staff would not only             
 be reviewing, but assumed they would be doing some sort of checking           
 up to make sure the corporation or company that is getting the tax            
 credit is actually doing what they promised.                                  
 MR. MOURANT said that having served on the AIDEA board, he could              
 say, with certainty, that the staff works very hard, and wasn't               
 sure if there was any slack in their budget.  In conversation with            
 both AIDEA and the Department of Revenue, part of the language that           
 the department is desirous of amending into this bill at a future             
 date, is language that lays out criteria for them to review the               
 actual concurrence with the project proposed--whether or not they             
 created the number of positions they were proposed, how much credit           
 they really are due, how much expansion really took place.  That              
 monitoring wouldn't be conducted by AIDEA, but rather by the                  
 Department of Revenue.  Likewise, the Department of Revenue would             
 receive the certificate of tax credit along with the annual filing            
 of the taxes from the entity.                                                 
 Number 524                                                                    
 BOB BARTHOLOMEW, Assistant Director, Division of Income & Excise              
 Audit, Department of Revenue, said the division has been the bill             
 through the first two committees and the focus in the first two               
 committees, the original bill proposed that a new board be put                
 together to administer the program, and the sponsor, in working               
 with the Departments of Commerce and Revenue, agreed to have AIDEA            
 step in and fill that role.  The Executive Branch initially had               
 some concern of creating another board, and we think it is an                 
 improvement to have AIDEA come in and fill that role.  There are a            
 couple of issues that the sponsors agreed to work with the                    
 Departments of Commerce and Revenue and AIDEA to address, which               
 could be done before the next committee.  One of those issues is              
 the criteria for determining the tax credits which does need to be            
 more objective.  AIDEA feels they are going to need some guidance             
 and they are working on some proposed language to do that.  Mr.               
 Bartholomew felt the scope of the credit also needs to be                     
 addressed.  Initially, the eligibility requirement of competition             
 between states was the focus and a big limit.  If the focus is also           
 going to be expanding current businesses that are in Alaska, that             
 will have an impact and the department will have to look at that              
 with the sponsor on what they really anticipate this legislation              
 applying to.  It was his understanding that it should be focused on           
 bringing new economic development in to the state, and as Mr.                 
 Mourant indicated, it should provide significant new investment in            
 employment increases.                                                         
 MR. BARTHOLOMEW mentioned the other issue the department tries to             
 address in the policy of tax credits is a needs based incentive,              
 similar to the Governor's royalty reduction.  A justified need.  He           
 felt discussions could continue to determine if that can be                   
 accomplished in this legislation.  There are some program                     
 administration adjustments that are being discussed between the               
 Department of Revenue and AIDEA on how the appeal process and the             
 compliance would work.  He indicated they are working on some                 
 language on how the compliance would work which they will discuss             
 with AIDEA and the sponsor.  Mr. Bartholomew said, "One example               
 AIDEA asked us to share where this would have applied, again this             
 was back if it would be limited to just competition among states,             
 one of the projects that they have been involved in where they                
 think it did make a difference, the incentives that were provided,            
 was the Federal Express cargo facility in Anchorage.  The                     
 competition between Oregon, an Eastern state, and Anchorage --                
 that's when the focus was on competition among states, and                    
 incentives did make a difference in that case."  In-state criteria            
 would be different.                                                           
 REPRESENTATIVE ELTON said Fed-Ex decided to locate here without a             
 tax credit in existence.                                                      
 MR. BARTHOLOMEW interjected he thought the incentives were worked             
 out between the international airports and financing incentives, so           
 it was not a tax credit; it was just where they did get incentives            
 related to financing provided by AIDEA that had some tax                      
 exemptions.  It was an example where they would have met the first            
 criteria regarding the competition.                                           
 REPRESENTATIVE ELTON referenced Mr. Bartholomew's comments                    
 regarding the proposed language from AIDEA and assumed he was                 
 talking about possible amendments to the bill.                                
 MR. BARTHOLOMEW responded that would be up to the sponsor.  He said           
 it could be done through regulations; however, the drift they have            
 received from the legislature this year is that, if possible, don't           
 leave it to regulations, put it in the bill.  That is why we would            
 be proposing that it be put in the legislation, before it goes to             
 the Finance Committee.                                                        
 REPRESENTATIVE ELTON asked if anyone from AIDEA has testified on              
 this bill.                                                                    
 MR. BARTHOLOMEW responded they have not.  He explained that AIDEA             
 just became involved between the last committee and the Labor and             
 Commerce Committee.  Based on conversations he has had with AIDEA,            
 they are supportive of the concept.  He said it was just getting              
 that objective criteria ironed out.                                           
 Number 581                                                                    
 REPRESENTATIVE ELTON noted that the city of Juneau did an economic            
 tax credit incentive on property tax, so it is somewhat different,            
 but the incentive provided 100 percent forgiveness on the tax in              
 the first year, 80 percent in the second year, and so forth over a            
 five year period until it reached a zero percent tax credit.                  
 Representative Elton asked if that sort of a phase out was                    
 considered in this legislation or could it be.  Related to that, he           
 said in reading the bill, there is no upper tax credit limit and if           
 AIDEA so decided, they could do dollar for dollar -- you invest one           
 dollar, you get a one dollar tax credit.                                      
 MR. BARTHOLOMEW said he thought the limitation on an annual basis             
 is up to 25 percent of the tax liability.  (Indisc.) huge tax                 
 liability still would be limited on an annual basis, to 25 percent            
 of the liability; that would be the annual cap.  He thought the               
 limitations are the lesser of 25 percent of the expense for wages             
 for new employees, or 25 percent of the annual tax liability.                 
 REPRESENTATIVE ELTON asked if that was corporate tax liability?               
 MR. BARTHOLOMEW responded corporation tax.                                    
 CHAIRMAN KOTT said he had been working with the departments, and              
 with AIDEA since they became involved in the process, to refine the           
 legislation as it is working its way through the system.  It does             
 have another committee of referral and he thought at that point,              
 things should be developed to the point where they want it;                   
 however, issues will be addressed as they come up.  He noted they             
 are a cooperative partner working with the department and                     
 incorporating the suggestions as they come up.                                
 REPRESENTATIVE PORTER commented he liked the idea of aiding new               
 business, as well as the idea of expanding existing business;                 
 however, he said we don't want to create incentives for new                   
 businesses that compete with existing businesses that have been               
 here for years.  He asked Chairman Kott if he was thinking this               
 would be an interim project.                                                  
 CHAIRMAN KOTT responded that is correct.                                      
 REPRESENTATIVE KUBINA noted he was supportive of the concept also.            
 He referenced page 3, line 15, where it talks about strengthening             
 the economy of the state and said just because of the way our tax             
 base is right now, we actually end up subsidizing unintentionally,            
 certain businesses and industries, because they don't bring back              
 enough tax to pay for the increase in schools, roads, etc.  He                
 asked does strengthening the state's economy mean that?  In other             
 words, is that something we are going to be subsidizing and it will           
 actually cost the state money because of the business coming here.            
 CHAIRMAN KOTT said that strengthening the economy of the state can            
 mean a number of things.  (Indisc.) increasing the amount of jobs             
 that is being created by whatever the entity is that comes to the             
 state of Alaska as a new business, we recognize that unless it                
 folds or is not performing up to its expectations, there is going             
 to be a corporate tax return to the state.  Obviously, the benefit            
 will not be the entire amount for the first ten year period that              
 the legislation provides for, but there will be some corporate tax            
 return to the state of Alaska.  If it is a viable business, and not           
 a business that came up here to draw business away from another               
 business, after the ten year period it should be around and we                
 would then receive the full benefit.                                          
 TAPE 95-47, SIDE B                                                            
 Number 001                                                                    
 REPRESENTATIVE KUBINA asked if it was envisioned that fish                    
 processors would be able to take advantage of the credit because              
 they really are competing with Seattle processors, they are                   
 (indisc.) and floating processors; they are not new, but if they              
 would add new things like surimi, salmon cakes, etc.?                         
 Number 017                                                                    
 MR. MOURANT responded the only restriction which would prevent that           
 from qualifying is if perhaps they were taking advantage of another           
 tax credit program of some type.  He referred to page 2, line 1,              
 which says it cannot be used in conjunction with another tax credit           
 program.  But if they were not qualified for another tax credit,              
 they could certainty apply and perhaps receive authority under this           
 REPRESENTATIVE ROKEBERG noted along that same line of questioning             
 and also Representative Porter's concern about competition, on page           
 3 it speaks to whether the tax credit will result in a net increase           
 in jobs.  Therefore, the findings of AIDEA's determination that a             
 tax credit would be forthcoming, would have to take that into                 
 consideration and he thought that was the leveling effect.  It                
 would have an impact on the competitive nature of the location and            
 also what the activity was.                                                   
 REPRESENTATIVE KUBINA said he liked the sentence better because the           
 net increase in jobs, in value added manufacturing or processing,             
 or a fiscal gain to the state.  He felt they needed to look out for           
 the fiscal gain to the state more closely.                                    
 REPRESENTATIVE ELTON asked if Mr. Bartholomew could recall how much           
 tax forgiveness the state gave away in the last four years of the             
 fisheries business tax credit.                                                
 MR. BARTHOLOMEW said he did not have that information.                        
 REPRESENTATIVE ELTON referred to the language on page 2, "...cannot           
 be used by a taxpayer in conjunction with any other tax credit                
 program," and asked if a corporation was taking advantage of the              
 city property tax forgiveness program in Juneau, would the language           
 as it is written, preclude them from taking advantage of the state            
 program.  It is not delineated between whether it is a state tax or           
 a municipal tax.                                                              
 MR. MOURANT stated that because the tax credit program speaks to              
 Title 43.10, which is the state net corporate tax, he thought that            
 would take care of the problem.  He said amending the legislation             
 to read, "...in conjunction with any other state tax credit                   
 program" would do no harm.                                                    
 Number 085                                                                    
 REPRESENTATIVE ROKEBERG referred to page 3, line 19 and said                  
 apparently this particular determination would be certified by the            
 Office of Management and Budget (OMB).  Does that mean it would go            
 from AIDEA to OMB, involving two agencies?                                    
 MR. BARTHOLOMEW  said he thought it was AIDEA's hope to have that             
 authority left with the AIDEA board, and not have to go to OMB.  He           
 believed it was one of the corrections AIDEA proposed to the                  
 REPRESENTATIVE ROKEBERG responded that made sense to him.                     
 Number 101                                                                    
 REPRESENTATIVE SANDERS said in light of the fact that this                    
 legislation was going to be carried over to the interim and it is             
 going to the Finance Committee for review, he made a motion to move           
 CSHB 232 out of the House Labor & Commerce Committee with                     
 individual recommendations.                                                   
 CHAIRMAN KOTT said a motion was made to move CSHB 232 from                    
 committee with individual recommendations.                                    
 REPRESENTATIVE KUBINA objected.  He said inasmuch as this was                 
 Chairman Kott's bill, he may want to analyze what the best way to             
 do this might be.                                                             
 CHAIRMAN KOTT said he was happy with the motion to move the bill              
 and stated he would be working with the departments to incorporate            
 any suggested changes they may have.  If they don't, he reiterated            
 he was happy with the bill the way it currently exists.                       
 REPRESENTATIVE KUBINA withdrew his objection.                                 
 CHAIRMAN KOTT asked if there was further objection.                           
 REPRESENTATIVE ELTON stated he was not objecting.  He said he liked           
 what Chairman Kott is trying to accomplish, but he has some                   
 questions about it and thoughts he would like to put in, and he               
 wanted Chairman Kott to know that if it goes the way it is, he                
 would probably express his thoughts and raise some questions on the           
 House floor.  It is his opinion that it does need some additional             
 work, and he especially thinks they need to hear from AIDEA, who is           
 going to have to implement it.                                                
 Number 143                                                                    
 CHAIRMAN KOTT asked if there was further objection.  Hearing none,            
 CSHB 232(STA) passed out of committee with individual                         
 recommendations, and accompanying fiscal note.                                
 HB 217 - TEACHER EMPLOYMENT RIGHTS & RETIREMENT                             
 Number 151                                                                    
 CHAIRMAN KOTT said the next bill before the committee is HB 217.              
 He asked Representative Ivan Ivan to give his sponsor statement.              
 REPRESENTATIVE IVAN IVAN, Sponsor, said HB 217 was introduced to              
 allow the school districts some flexibility in dealing with rising            
 enrollments and increased costs associated with their education               
 system.  This bill would allow the school districts to lay off                
 teachers who have acquired tenure rights, but only if the school              
 district finds it necessary to reduce the number of teachers due to           
 declining enrollment or declining revenues.  The bill also                    
 increases the tenure from two years to four years and removes the             
 costly trial de novo portion of our statutes, which allows a school           
 district employee, who if not satisfied with the district-lead                
 investigation, to go to the court system to begin an entirely new             
 trial.  The district's investigation will stop unless (indisc.).              
 The deletion of trial de novo provides our educators the same                 
 protection as provided to other state employees.  The bill does               
 allow for mandatory advisory arbitration if the school board                  
 reaches a decision unfavorable to the teacher prior to appealing to           
 superior court.                                                               
 REPRESENTATIVE IVAN said Sections 1-3 of the Committee Substitute             
 for House Bill 217, as it came out of the Judiciary Committee,                
 apply only to those teachers hired after the bill is signed into              
 law.  The remaining sections of the bill dealing with loss of                 
 tenure rights, layoffs and elimination of trial de novo go into               
 effect after the bill is signed and will have an affect on all                
 teachers.  Representative Ivan said he was available to answer                
 questions from the committee and also Mr. Wright, Legislative                 
 Assistant to Representative Ivan was also available for questions.            
 Number 191                                                                    
 REPRESENTATIVE ELTON asked if there would be other individuals                
 available to testify.  He would save his questions for later.                 
 CHAIRMAN KOTT said there were several people signed up to testify.            
 He said he would like to offer CSHB 217(L&C), version R, Kramer,              
 dated 4/25/95.  He asked his Administrative Assistant, Rod Mourant,           
 to come forward and articulate the changes which were made                    
 primarily in cooperation with the prime sponsor of the bill.                  
 Number 206                                                                    
 ROD MOURANT, Administrative Assistant to Representative Pete Kott,            
 said there were just a few changes between CSHB 217(JUD) version O            
 and the work draft CSHB 217(L&C), version R, dated 4/25/95, Kramer.           
 In the former version O of the Judiciary Committee, there was a               
 Section 3 which called for peer review, in the case of evaluation             
 and dispute of layoff.  The cost requirements in the peer review              
 section caused great concern for both the National Education                  
 Association (NEA) and PTA.  Likewise, both of those organizations             
 expressed concern over time away from the classroom on the part of            
 instructors to serve on a peer review committee.  Coupled with                
 that, again, is the expense of hiring substitute instructors while            
 they were serving on the committee.  For that reason, that section            
 has been deleted from version R.                                              
 MR. MOURANT said a small subsection in Section 5, page 3, line 31,            
 (f), was added that says a teacher in layoff status may choose                
 whether or not to treat the layoff as a termination for the                   
 purposes of receiving a refund of the balance of the teachers                 
 member contribution account in the Teachers Retirement System, AS             
 14.25.150.  That would allow an instructor who felt they needed               
 additional cash reserves to, in fact, avail themselves of the                 
 employee contribution amounts that are in their employee                      
 contribution account in the Teachers Retirement System.                       
 MR. MOURANT continued that a third change in the legislation is in            
 Section 6, page 4, which deletes the provision that was in the                
 Judiciary Committee version for mandatory advisory arbitration.               
 This would allow the teacher to take an appeal directly from appeal           
 to the superintendent directly to judicial review.  This                      
 accomplishes two things:  It is a big cost savings in not having to           
 hire an unbiased arbitrator to hear the case; and likewise, it                
 speeds the process up toward final resolution on a much quicker               
 basis.  He said those were the three major changes.  He pointed out           
 one correction that still needs to be made in this legislation,               
 which was an oversight by both the drafting attorney and himself,             
 is on page 2, line 10, still makes reference to the now deleted               
 appeal review section.  Therefore, item 3 on page 2, line 10 should           
 be deleted in its entirety.                                                   
 Number 268                                                                    
 REPRESENTATIVE ELTON mentioned that he has an amendment which                 
 addresses the concern brought up by Mr. Mourant.  He asked Mr.                
 Mourant if he had worked with the sponsor and if the sponsor was              
 comfortable with the changes that were being made in the committee            
 MR. MOURANT responded that was absolutely correct.                            
 Number 274                                                                    
 REPRESENTATIVE PORTER moved to adopt the work draft on HB 217\R,              
 dated 4/25/95.                                                                
 CHAIRMAN KOTT said a motion had been made to adopt CSHB 217(L&C),             
 dated 4/25/95.  He asked if there was objection.                              
 REPRESENTATIVE KUBINA objected.  He said the section that he liked            
 the most, which was the peer review, had been deleted.  He stated             
 he has always been an advocate of allowing teachers to be involved            
 in working with new teachers and helping to evaluate them.  He felt           
 teachers are a lot harder on themselves than administrators.  One             
 of the excuses made for not conducting evaluations is that the                
 administrators are overworked.  That may be, and that was one                 
 reason why he felt that teachers should be involved in policing               
 their own ranks.  He stated that other professional groups do this,           
 and believed it was probably the strongest thing that could be done           
 to improve the schools and the teaching profession.  He reiterated            
 he did not particularly like the way Section 3 was worded in the              
 original bill, but he did like the concept.                                   
 CHAIRMAN KOTT commented the initial peer review committee was a               
 membership of three teachers, and there was some concern voiced               
 regarding the funding for pulling those teachers out of the                   
 classroom.  It was not only the issue of taking them out of the               
 classroom, thereby not affording them the opportunity to teach the            
 children, but there was also the idea that there were no guidelines           
 or procedures identified for this evaluation process.  Who is going           
 to train these three panel members, would it be a roving panel,               
 would it be the same three members, do we train and continue to               
 retrain various teachers to be qualified in the peer review                   
 process.  It was his impression after listening to both sides, that           
 the best thing that could happen, unless it was fully funded, was             
 to go back to the status quo and take it out.  However, after                 
 listening to testimony, if it is the will of this committee to put            
 it back in, it can be done.                                                   
 REPRESENTATIVE ELTON said the Labor & Commerce Committee has an               
 asset that other committees didn't have; that's having a teacher on           
 the committee.  He asked if there was a teacher mentoring program             
 and if so, what would be the difference between that and peer                 
 review.  A teacher mentoring program has nothing to do with tenure            
 or tenure review; whereas, this peer review would be...                       
 REPRESENTATIVE KUBINA interjected specifically for evaluating for             
 tenure.  He added he was not aware of any statewide teacher mentor            
 program.  It is generally left up to the school districts to decide           
 if they want to do anything along those lines.  However, he felt              
 there should be one.  He commented that some of the new teachers              
 just coming out of college don't have the training and the coaching           
 to get their point across.  They need to be taught to come down to            
 the level of being able to teach children.  He said that he was               
 really speaking against the whole bill in a sense, in that this               
 isn't the problem.  He said two years or four years won't make any            
 difference.  Are you going to have people working with them, are              
 you going to train them anymore - nothing is going to change.  He             
 reiterated that nothing is going to change, this isn't the problem.           
 He said by the committee doing what was just said is also the                 
 problem.  Nobody wants to sit down and address the problems such as           
 money, etc.                                                                   
 CHAIRMAN KOTT asked if Representative Kubina was maintaining his              
 objection to adopting the committee substitute.                               
 REPRESENTATIVE KUBINA replied no.                                             
 CHAIRMAN KOTT asked if there was further objection.  Hearing none,            
 CSHB 217(L&C), version R, dated 4/25/95 was adopted.                          
 CHAIRMAN KOTT noted there were people in Delta Junction waiting to            
 testify via teleconference.                                                   
 Number 377                                                                    
 WHITNEY AILLAUD testified via teleconference from Delta Junction,             
 and said HB 217 is nothing more than teacher bashing, under the               
 thinly veiled disguise of educational reform, considering the                 
 provision of increasing the service required for acquisition of               
 tenure from two to four years.  (Indisc.) school administrators are           
 forced to do their jobs and dismiss incompetent teachers quickly.             
 If HB 217 is enacted, good teachers will have to teach from their             
 (indisc.) while school officials can slack off and allow                      
 incompetents to remain on the job for four years.  He said other              
 sections in HB 217 are equally ridiculous, but was unable to                  
 address them because of the 60 second time period.  He urged the              
 committee to kill HB 217.                                                     
 REPRESENTATIVE KUBINA asked Chairman Kott asked if there was a                
 60 second time limit on testimony.                                            
 UNIDENTIFIED SPEAKER said it was ordered with a one minute limit,             
 but it was at Chairman Kott's discretion.                                     
 CHAIRMAN KOTT responded he would allow up to three minutes, which             
 is standard practice for the House Labor & Commerce Committee.                
 MR. AILLAUD referred to the 3 percent reduction in funding. To                
 think that an entire school district's staff could be (indisc.)               
 because of the 3 percent reduction is absurd.  This opens the door            
 for all kinds of problems if there is a vindictive superintendent             
 and very good teachers who have served the community well, but                
 maybe have fallen from grace with the superintendent, would lose              
 their jobs because of this bill.  It would do nothing to help                 
 education in this state.                                                      
 Number 404                                                                    
 MARY BOHANAN, Teacher, testified via teleconference from Delta                
 Junction.  She said her children had gone through Alaska schools              
 and wanted to go on to become teachers in this state.  She asked              
 the committee members to not pass HB 217 or CSHB 217.  The issue of           
 laying off tenured teachers when there is a decrease in revenue               
 caused her much anxiety.  (Indisc.) fiscal or financial emergency             
 in a district be verified.  Will districts be asked to show a                 
 public record prior to laying off teachers, if they sought all cost           
 saving avenues before destroying us and the lives of this                     
 community?  According to this bill, 1 percent of $60,000 in this              
 district could cause many of us teachers to be laid off.  Is that             
 1 teacher, 8 teachers, 35 teachers?  Three percent or 10 percent              
 revenue -- what kind of numbers are we dealing with and how  do we            
 verify that these are actually cuts, because there are grants that            
 come in, local support that comes in.  What numbers are we really             
 talking about.  Is it just what the state provides?  She stated               
 this is a bad bill and asked committee members to hold it up so it            
 doesn't pass this year.                                                       
 Number 420                                                                    
 CARL ROSE, Executive Director, Association of Alaska School Boards,           
 said for the record they have agreed to some compromise language              
 that was originally embodied in CSHB 217(HES) and again in CSHB
 217(JUD).  He said they originally asked for five years and the               
 compromise was four years.  They agreed on the peer review and                
 stated they supported the peer review.  He noted when they moved on           
 the issue of layoff and the discussion took place about how they              
 would verify, he went on record then and wanted to go on record now           
 that, "You have locally elected officials at the local level."                
 They are elected, they stand accountable at the election box, and             
 try to invoke a layoff with bogus information, and there will be              
 real trouble locally.  He said school board members don't educate             
 children; teachers do.  We, in fact, need more teachers, not less.            
 They do not control their revenue stream and the only means they              
 have to balance the budget is to manage.  Their lack of ability to            
 manage right now is curtailed greatly in a number of districts.  He           
 emphasized they supported the compromise legislation that addressed           
 advisory arbitration as a compromise from moving directly to                  
 judicial review.  They initially wanted subject area endorsements.            
 He thought the public would like to know that teachers in math are            
 endorsed in the area of math.  They'd like to know that teachers in           
 science were endorsed in the area of science.  They think they                
 compromised when they agreed to recognize secondary and elementary            
 qualifications or primary qualifications so they could address                
 qualifications before seniority.  He thought that was a major move.           
 MR. ROSE said there are three areas in the bill which concerns                
 them.  One is acquisition; two is layoff; and three is de novo.  In           
 the area of acquisition, they are asking for four years.  They are            
 asking for four years not to say they need four years to determine            
 whether a teacher is not worthy to teach.  If a teacher is not                
 satisfactory and they have realized that in one year, they are not            
 bound to keep them for four years.  They do want to ensure that new           
 teachers, new professionals who try to enter the profession, are              
 given enough time to get professional development, to get                     
 supervision, in-service training, to get experience before a                  
 decision is made prematurely that could alter their career.  They             
 are asking for more time to make a better decision.  Secondly, is             
 the area of layoff.  Presently, the law is silent on financial                
 shortfall.  He said you can nonretain a teacher if you have a                 
 decline in revenue - nonretain.  They think that nonretaining a               
 teacher is appropriate if a teacher is incompetent.  They think it            
 is appropriate if a teacher substantially does not comply with the            
 laws and regulations.  They think it is appropriate if a teacher is           
 found to be immoral.  They think it is inappropriate for financial            
 emergency.  Thereby, they think for financial emergency, whether it           
 be for student decline or revenue decline, there should be a layoff           
 provision created that protects seniority, that protects tenure,              
 that protects accrued leave, and not simply dismissed.  They think            
 it is fair and they think qualifications should be looked at for              
 rehire.  They think it is a quality issue.  If you look at                    
 qualifications first, you send a message to your job force that you           
 should look at qualifications.  In this case, it would be primary             
 and secondary, but eventually they hope to attain subject area                
 endorsements; thereby, multiple endorsements for a student or for             
 a teacher would be the measure of employment security.  They think            
 it is good for the work force; they think it is good for                      
 instruction.  They think it is good for employment security.                  
 MR. ROSE said on the issue of de novo, they have statistics that              
 will show that on average, a trial de novo to remove a teacher                
 could cost somewhere in the area of $100,000 for the entire                   
 process.  They think it is expensive and that money should be spent           
 in the classroom.  They think if they take an action that is                  
 unfavorable to a teacher, that teacher should have the opportunity            
 to go to superior court for a judicial review.  They think that if            
 called upon, to go to a second trial, it is very costly, a                    
 duplicate effort, and very expensive.  Mr. Rose said he thinks the            
 issue of 3 percent as a trigger - he opposes a trigger.  They would           
 agree to a trigger if it satisfies the committee, but he is opposed           
 to it.  He stated they are elected officials and if they do                   
 anything that is inappropriate, they should be removed from office.           
 He said he would guarantee that any school board that decides to              
 layoff teachers, when they have other areas of the budget that have           
 not been addressed, has real trouble.  These are elected officials,           
 they assume that responsibility for performance, but he said they             
 do not control our revenue, the legislature does; the city councils           
 do.  Mr. Rose said they stand responsible for the performance of              
 their schools and if the funding is inadequate, that responsibility           
 should be shared.                                                             
 REPRESENTATIVE ELTON said he would have assumed that the most                 
 important job that a school board member has or an administrator              
 has is teacher development and teacher assessment.  He asked Mr.              
 Rose to correct him if he was wrong and discuss those other                   
 responsibilities that might have a higher priority.                           
 MR. ROSE agreed with Representative Elton.                                    
 Number 487                                                                    
 REPRESENTATIVE ELTON said given that, he doesn't understand what              
 the issue is between two and four years.  If the most important               
 chore that an administrator has or that a school board member has             
 are those two things, why should it take that long.  He said he               
 lived in a community where there are dozens, if not hundreds, of              
 people that would be willing to go to work, and if somebody doesn't           
 work out after two years, why can't we just dip into that pool of             
 people that would love to go to work in the Juneau School District.           
 MR. ROSE responded he believed they did that.  He said right now              
 because of the two year tenure law, it is an inadequate amount of             
 time to assess.  He commented the biggest pressure that school                
 districts face right now is that we spend too much money in                   
 administration.  Thereby, if we look across the state, statewide              
 we reduce administration, but we further increase the need for                
 teachers.  He was not saying they do a perfect job at evaluation.             
 Evaluation continues to be a problem.  There is a tendency to look            
 at the worst case scenario and over generalize.  He said he had               
 heard testimony that some people have not been evaluated in five              
 years.  Administrators adamantly disagree when they are asked.  He            
 said he thought we had a responsibility to ensure that teachers               
 have adequate amounts of time to gain experience, to gain                     
 confidence, and to gain supervision in a new profession before a              
 decision is made that alters their career.                                    
 Number 514                                                                    
 REPRESENTATIVE ELTON commented he had said earlier in relation to             
 another bill, that anecdotal experience is very dangerous; however,           
 he was trained as a journalist.  He started out as a reporter and             
 ended up an editor.  If someone came to him with a premise that               
 "I'm sorry, you shouldn't get rid of me for four years as a                   
 reporter because the most important job that an editor has is good            
 reporters.  If you don't have good reporters, you get phone calls             
 from readers.  If you don't have good teachers, administrators                
 probably get phone calls from parents."  If an editor can make a              
 decision within three months of whether a person is going to make             
 it as a reporter based on that kind of feedback from angry readers,           
 Representative Elton said he is having a difficult time accepting             
 the argument that an administrator that is doing his/her job, can't           
 make a decision based on feedback from angry parents as quickly as            
 an editor can make a decision on a reporter.  The development of a            
 reporter is the editor's top job.  Why should it take four years?             
 Number 530                                                                    
 MR. ROSE said if you have an excellent teacher, it could be true;             
 four years may be too long.  If you have a bad teacher, that                  
 decision can be made much sooner.  But if you have marginal                   
 teachers, what about them?  He said that is what they are faced               
 with.  They just want the time to make a good decision.                       
 REPRESENTATIVE ELTON responded that if he had a marginal reporter,            
 he would go out and get a better one.  That is a decision that                
 parents of students would want an administrator to do.  They don't            
 want a system that goes on for four years protecting a marginal               
 teacher when there are plenty of people out there knocking on the             
 door for jobs that could be a better job.  He didn't think the                
 people waiting in the Juneau School District are marginal teachers.           
 MR. ROSE pointed out the standard under certification right now for           
 removing a teacher is incompetence.  What we desire is excellence;            
 the standard for removal is incompetence.  He felt that standard is           
 low.  He said if we had the time to ensure that the best teachers             
 are given tenure and granted tenure, because there are                        
 extraordinary benefits to tenure, that is what we would like to               
 Number 544                                                                    
 REPRESENTATIVE PORTER asked if administrators would rather sit down           
 and work these things out with teachers or (indisc.).                         
 MR. ROSE said teachers.                                                       
 REPRESENTATIVE KUBINA asked if Mr. Rose had commented that one of             
 their biggest problems is they spend too much on administration.              
 MR. ROSE clarified that is what they are criticized for.  That has            
 become the standard and every school district that he was aware of            
 that has reduced their administration considerably.  He noted that            
 testimony heard last week indicated the Mat-Su School District has            
 reduced their administration in the last years by 50 percent;                 
 they've increased students by 1200.  Mr. Rose emphasized they are             
 trying to reduce administration; meanwhile the regulations,                   
 statutes, and requirements need to be met.                                    
 REPRESENTATIVE KUBINA said he wasn't criticizing Mr. Rose, he                 
 thought Mr. Rose was admitting their administration costs were too            
 high.  He said he misunderstood Mr. Rose's remark.                            
 MR. ROSE said they are accused of that.                                       
 REPRESENTATIVE KUBINA said he has firsthand experience in talking             
 with teachers and administrators who have admitted they don't have            
 time for evaluation.  He has experienced getting his evaluation on            
 his last day and being asked to sign it.  The person who prepared             
 the evaluation had not been in his classroom the entire year, other           
 than to run in and deliver a message.  He knows it has happened               
 with nontenured teachers.  He asked why there isn't statements in             
 these bills that say a teacher has a right to know when they are              
 not doing something right or not meeting the standard.  They have             
 a right, whether it is peers or administrators, in there with them.           
 He inquired if it was in regulation that people are supposed to be            
 evaluated.  What happens when the rules aren't followed?                      
 MR. ROSE said he wished there were administrators present to speak            
 for themselves; however, when they talk to administrators they                
 explain what their role and responsibility is or the administrators           
 explain what their role and responsibility is, they tell us they              
 are administrating and they struggle especially in multi-site                 
 districts to be able to comply with all those regulations.  He said           
 for noncompliance, your funds are withheld.  He thought that was              
 the only compliance measure there is in the Department of                     
 Education.  He said they ask for those evaluations before they                
 consider the review of tenure.                                                
 REPRESENTATIVE KUBINA commented that on two difference occasions,             
 there were nontenured people that teachers recognized were not up             
 to par, and they worked with the administrators to ensure this                
 person didn't have any stigma, talked about things they could                 
 improve, they got a letter that wasn't a glowing letter but it was            
 something where they could go get more experience - not ruin their            
 career.  He stressed that people need to work together.                       
 MR. ROSE reiterated they did support the peer review.                         
 CHAIRMAN KOTT said there were three individuals wishing to testify            
 from Kenai/Soldotna.                                                          
 Number 613                                                                    
 JIM SIMEROTH testified via teleconference from Kenai-Soldotna.  He            
 stated he has 31 years experience as a teacher in the Kenai                   
 Peninsula Borough School District.  He commented that HB 217 was              
 detrimental to public education.  School districts do not need four           
 years to let incompetent or ineffective teachers hang around until            
 something is done about them.  In his opinion, that makes the                 
 problem worse.  He commented he had a lot of problems with the peer           
 review committee.  First, he was not sure he would want to be on a            
 committee that would evaluate another teacher.  Teachers are hired            
 to teach students and one of the duties of an administrator is to             
 evaluate teachers.  He said the issue that should be addressed is             
 effective evaluation, not tenure.  In regards to mandatory advisory           
 arbitration, he felt that was simply a contradiction of terms.  If            
 it is mandatory, it should count for something; not be advisory.              
 The last issue he wanted to address was abolishing the de novo                
 trial.  He felt that went against the (indisc.) principle; that is            
 that people must be treated in a fair and just way.  This bill                
 allows administrators to unfairly dismiss a teacher and then never            
 really have to explain what the real reason was.  He thought the              
 districts (indisc.) to the de novo trial simply because (indisc.)             
 they lose those.  They usually lose those because some unfair,                
 unjust decision has been made.  He urged the committee to not pass            
 this bill.                                                                    
 Number 634                                                                    
 TRENA RICHARDSON testified via teleconference from Soldotna.  She             
 said she is a 22-year employee of the Kenai Peninsula School                  
 District.  In general, she thinks HB 217 is overall a terrible                
 TAPE 95-48, SIDE A                                                            
 Number 001                                                                    
 MS. RICHARDSON continued...which cost the district additional                 
 dollars or they could be compensated by the (indisc.) for the                 
 additional work they are being asked to do.  This is going to cost            
 the school district a lot of money, and where is that money going             
 to come from.  School districts' budgets are already stretched past           
 their limits.  Districts all over the state have been cutting                 
 budgets this year, increasing class size, cutting programs, etc.              
 She said the legislature is talking about not fully funding                   
 education right now, so how can they justify strapping districts              
 with a peer review committee, which is just another unfunded                  
 mandate with no (indisc.).  (Indisc.) that the legislature this               
 year could spend as much time identifying new resources and funds             
 than they have on bills such as HB 217 (indisc.) employee groups,             
 the state would probably find that there would be less of a funding           
 crisis because there would be so much of that funding available.              
 She urged the committee to not put any more unfunded mandates on              
 the school districts.                                                         
 Number 028                                                                    
 DON OBERG testified via teleconference from Kenai, that he had some           
 real reservations about the idea that this would be a cost saving             
 measure.  As he understood earlier testimony, (indisc.) judicial              
 review is very expense.  He suggested the committee might look at             
 what it might cost for an (indisc.) hearing.  He was sure it would            
 result in attorneys for the school district and possibly for the              
 teacher.  Then there would be advisory arbitration.  He said, as              
 you know arbitration is nonexistent.  Then there would be a                   
 (indisc.) hearing again to determine if the arbitration (indisc.--            
 talking amongst committee members).  He urged the committee to look           
 at the possible expenses before they make a decision.                         
 CHAIRMAN KOTT said it is the intent of the chair to recess to the             
 call of the chair.  Committee members were summoned to the House              
 floor, as there was a call placed on the House.                               
 REPRESENTATIVE KUBINA raised an objection.  He commented that given           
 the time of day, they would be debating tort reform on the House              
 floor which would take several hours to get through, and he                   
 wholeheartedly objected to having committee meetings in the middle            
 of the night when this is a subject that people want to testify on.           
 CHAIRMAN KOTT said it was not his intent to call the committee back           
 tonight if they are on the House floor after 10:00 p.m.                       
 Chairman Kott recessed the meeting at 8:50 p.m.                               

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