Legislature(1993 - 1994)
04/16/1993 10:05 AM CRA
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE April 16, 1993 10:05 a.m. MEMBERS PRESENT Senator Randy Phillips, Chairman Senator Loren Leman Senator Al Adams Senator Fred Zharoff MEMBERS ABSENT Senator Robin Taylor, Vice Chairman COMMITTEE CALENDAR SENATE BILL NO. 62 "An Act relating to the public school foundation program; and providing for an effective date." SENATE BILL NO. 65 "An Act relating to centralized correspondence study; and providing for an effective date." SENATE BILL NO. 176 "An Act relating to the municipal tax exemption for inventories intended for export." PREVIOUS SENATE COMMITTEE ACTION SB 62 - See Community & Regional Affairs minutes dated 2/18/93, 4/1/93, 4/6/93 (a.m. & p.m. minutes). SB 65 - See HESS minutes dated 4/2/93. SB 176 - See Community & Regional Affairs minutes dated 4/13/93. WITNESS REGISTER Senator Jim Duncan State Capitol Juneau, AK 99801-1182 POSITION STATEMENT: Prime Sponsor of SB 65 Bill Elkinton Juneau, AK POSITION STATEMENT: Supports SB 65 Jack Cadigan Juneau, AK POSITION STATEMENT: Supports SB 65 Darby Anderson, Superintendent Centralized Correspondence School Department of Education 3141 Channel Drive, #100 Juneau, AK 99801 POSITION STATEMENT: Supports SB 65 Scott Hawkins, President Anchorage Economic Development Corporationn 550 West 7th, #1130 Anchorage, AK 99501 POSITION STATEMENT: Offered information in support of SB 176 Duane Guiiley, Director School Finance Department of Education 801 W. 10th St., Suite 200 Juneau, AK 99801 POSITION STATEMENT: Offered information on SB 176 ACTION NARRATIVE TAPE 93-22, SIDE A Number 001 The Senate Community & Regional Affairs Committee was called to order by Chairman Randy Phillips at 10:05 a.m. SENATOR RANDY PHILLIPS introduced SB 65 (CENTRALIZED CORRESPONDENCE STUDY) as the first order of business. Number 025 SENATOR JIM DUNCAN, prime sponsor of SB 65, explained that the Centralized Correspondence Study program currently receives its funding under AS 14.17.022, which allows accounting only of elementary students and not secondary students. It is prorated at 65 percent of the unit value. Over the years, it has been obvious that that funding scenario has created an inequity since the centralized correspondence unit provides services to over 1,000 students, half of those students being in high school. The result is that the correspondence study program is grossly underfunded to continue the valuable service its provides throughout the state. Section 1 of SB 65 formally recognizes centralized correspondence study as a public school with a minimum 180 day term for students. Section 2 would allow the school to count the roll of both elementary and secondary students for funding purposes. Concluding, Senator Duncan said the Centralized Correspondence Study program makes a valuable contribution to education, and it needs to be properly recognized and have the adequate funding for the program to continue. Number 070 BILL ELKINTON, a Centralized Correspondence Study teacher, said the Centralized Correspondence Study program is a full- fledged school which provides its students top quality education. Mr. Elkinton presented a history of the CCS program which had its beginnings in territorial days, primarily providing a service to rural children of elementary age. The program has expanded throughout the years and now includes courses in Alaska studies and Alaska science. He shared postcards, letters and pictures provided by CCS counselor Gail Haynes attesting to the level of education received by students served at CCS and expressing their appreciation for that education. Mr. Elkinton noted that approximately five years ago CCS added a summer program which necessitated added materials, wharehouse space, personnel, etc. However, a large block of the funding for summer school was cut out of the budget, and it made very apparent the need for equitable funding. SB 65 seeks to move the CCS program towards equity in school and teacher status. Mr. Elkinton said the membership of CCSEA supports the HES committee substitute, and he urged its favorable and prompt passage out of committee. Number 225 SENATOR LEMAN noted that there was a state spelling bee in progress, and he asked if any CCS students were participating. BILL ELKINTON acknowledged that there were CCS students taking part in the spelling bee. He added that they seek to involve their students in math competitions, spelling bees, Battle of the Books, etc., but some of these activities have had to be curtailed because of funding cuts. number 263 JACK CADIGAN, a CCS teacher, stated he was representing CCSEA, the teachers' association for centralized correspondence schools. He said the CCS program can offer programs in such courses where the smaller districts individually cannot, and some of the smaller districts purchase their services in this regard. Mr. Cadigan said this is a real need as far as the equity in secondary funding goes, it is a real need for total equity towards being a school, and SB 65 will meet those needs. Number 290 SENATOR LEMAN asked if it was possible for students to use centralized correspondence to supplement their other schooling, and JACK CADIGAN responded that students do that in some cases. Number 316 DARBY ANDERSON, Superintendent, Centralized Correspondence School, Department of Education, stated the department's support for the legislation. Ms. Anderson clarified that when CCS provides services to students currently enrolled in other districts, those districts contract with and pay CCS for those services. Ms. Anderson said the CCS is extremely cost effective. Their cost per pupil is $2,600. She noted that it would cost the state an additional $1.2 million if secondary students that are currently enrolled in correspondence school were enrolled in a local school district. The primary change the legislation would make is to allow them to use a secondary formula and continue to offer a qualify secondary program. Ms. Anderson informed the committee that the fiscal note is based on FY 93 actual; secondary funding would generate an additional $351,400; the remaining figures project a 10 percent increase in enrollment each year. There being no other witnesses present to testify, SENATOR RANDY PHILLIPS asked for a motion to move SB 65 out of committee. SENATOR LEMAN moved that CSSB 65(HES) be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 358 SENATOR RANDY PHILLIPS brought SB 176 (MUNICIPAL INVENTORY TAX EXEMPTION:EXPORTS) before the committee. SCOTT HAWKINS, President of the Anchorage Economic Development Corporation, said there is some urgency to getting SB 176 passed, because without it, municipalities are forced to levy property taxes even on goods held for shipment outside of the state. That hasn't been an issue in the past because of the lack of an international distribution industry in Anchorage. SB 176 will give localities the option of classifying that kind of an inventory and setting it outside of the inventory tax. He added that if on the following Tuesday the Municipality of Anchorage votes in a sales tax, the way it is structured it actually eliminates the inventory tax. However, Mr. Hawkins still urged going forward with the bill because there are other communities in the state that will benefit from the bill, and the chances of the ballot proposition passing in Anchorage are not real high. Mr. Hawkins pointed out that there is no inventory that is currently being taxed because they have yet to attract the international distribution industry, so there would not be any fiscal impact that they are aware of. This will allow the municipality to attract this industry, and the actual long-term fiscal impact would be positive because it would be necessary to build warehouses, etc. Number 408 SENATOR ZHAROFF asked if the Department of Community & Regional Affairs has a position was on SB 176. SHIRLEY ARMSTRONG, staff to the committee, responded that their position paper is neutral and that they have provided a zero fiscal note. Number 417 SENATOR RANDY PHILLIPS said he was concerned because the legislation was taking out the language that an ordinance like this may not be repealed by the voters through a referendum, and he thinks that language should stay in. SCOTT HAWKINS answered that it was cleanup of the language and was considered superfluous. Any ordinance can be repealed by the voters by referendum. He also clarified that this legislation would have no direct affect on the public school foundation formula or the dollars that the district would receive from the state through the foundation program. He said if anything, it will actually help the Municipality of Anchorage raise tax revenue and help fund the school district budget. Number 485 DUANE GUILEY, Director of School Finance, Department of Education, also clarified that in that this section is included under optional exemptions for local tax in state statute (AS 29.45.050), it has absolutely no affect on local contribution rates in public school districts in the state. Only mandated exemptions are excluded from the value of full and true determination for real and personal property. Number 500 SENATOR RANDY PHILLIPS asked for the pleasure of the committee. SENATOR LEMAN moved that SB 176 be moved out of committee with individual recommendations. Hearing no objection, it was so ordered. Number 517 SENATOR RANDY PHILLIPS stated that the hearing on SB 62 (PUBLIC SCHOOL FOUNDATION PROGRAM) would be postponed until the full committee was present. There being no further business to come before the committee, the meeting was adjourned at 10:45 a.m.