Legislature(1995 - 1996)
04/27/1995 07:05 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= 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 None 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 SHORT TITLE: LICENSING OF LANDSCAPE ARCHITECTS 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, PORTER 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 SHORT TITLE: TEACHER EMPLOYMENT RIGHTS & RETIREMENT 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, TOOHEY 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 resolution. 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 discussed. REPRESENTATIVE GENE KUBINA said the amendments are not incorporated yet. CHAIRMAN KOTT said the amendments would be incorporated into a Labor & Commerce Committee Substitute. REPRESENTATIVE KUBINA asked what the two amendments were that did pass. 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 either. 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 is. 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 Committee. 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 Petersburg. 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 government. 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 questions. REPRESENTATIVE KUBINA asked if this bill had a Finance Committee referral? 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 around. 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 legislation. 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 sponsor. 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 substitute. 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 have. 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 bill. 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. ADJOURNMENT Chairman Kott recessed the meeting at 8:50 p.m.