Legislature(1999 - 2000)

04/27/1999 09:05 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE                                                                                                        
April 27, 1999                                                                                                                  
9:05 AM                                                                                                                         
SFC-99 # 112, Side A & Side B                                                                                                   
CALL TO ORDER                                                                                                                   
Co-Chair John Torgerson convened the meeting at                                                                                 
approximately 9:05 AM.                                                                                                          
Senator John Torgerson, Senator Sean Parnell, Senator Randy                                                                     
Phillips, Senator Gary Wilken, Senator Al Adams, Senator                                                                        
Pete Kelly and Senator Lyda Green were present when the                                                                         
meeting convened. Senator Dave Donley arrived shortly                                                                           
Also Attending:                                                                                                                 
STEVEN DAUGHERTEY, Assistant Attorney General, Natural                                                                          
Resources Section, Department of Law; MIKE MORGAN, PMP,                                                                         
Manager, Facilities Section, Education Support Services,                                                                        
Department of Education; JIM HAYDEN, Program Manager,                                                                           
Storage Tank Program, Department of Environmental                                                                               
Conservation; JOHN BARNETT, Executive Director, Board of                                                                        
Storage Tank Facilities, Department of Environmental                                                                            
Conservation; WENDY REDMOND, Vice President, University                                                                         
Relations, University of Alaska.                                                                                                
Attending via Teleconference: From Anchorage: DEBBIE                                                                            
OSSIANDER, Anchorage School District; LARRY WIGET,                                                                              
Executive Director, Public Affairs, Anchorage School                                                                            
District; MOLLY MCCAMMON, Executive Director, Exxon Valdez                                                                      
Oil Spill Trustee Council.                                                                                                      
SUMMARY INFORMATION                                                                                                             
SB   4-OFFICE OF VICTIMS' RIGHTS                                                                                                
The committee adopted a committee substitute and reported                                                                       
it out of committee.                                                                                                            
SB  95-SCHOOL GRANT/DEBT REIMBURSEMENT                                                                                          
The committee heard from the sponsor, the Department of                                                                         
Education and the Anchorage School District. The bill was                                                                       
held in committee.                                                                                                              
SB 128-STORAGE TANK ASSISTANCE FUND                                                                                             
The committee continued debate and adopted an amendment.                                                                        
Further discussion was held with the Department of                                                                              
Environmental Conservation. The bill was held in committee.                                                                     
HJR 13-UNIVERSITY ENDOWMENT FOR RESEARCH                                                                                        
The committee heard from the sponsor, the Exxon Valdez Oil                                                                      
Spill Trustee Council and the University of Alaska. Without                                                                     
objection, the bill was reported from committee.                                                                                
CS FOR SENATE BILL NO. 4(JUD)                                                                                                   
"An Act relating to establishing an office of victims'                                                                          
rights; relating to compensation of victims of violent                                                                          
crimes; relating to eligibility for a permanent fund                                                                            
dividend for persons convicted of and incarcerated for                                                                          
certain offenses; and amending Rule 16, Alaska Rules                                                                            
of Criminal Procedure, Rule 9, Alaska Delinquency                                                                               
Rules, and Rule 501, Alaska Rules of Evidence."                                                                                 
This was the third hearing for this bill.  Co-Chair John                                                                        
Torgerson reminded the committee that earlier concerns had                                                                      
been worked through during the last hearing. A committee                                                                        
substitute had been before the committee but was not                                                                            
adopted to give the sponsor an opportunity to review the                                                                        
changes. Senator Rick Halford, the sponsor, approved of the                                                                     
proposed version.                                                                                                               
Senator Sean Parnell moved to adopt CS SB 4 (FIN) Version                                                                       
"I" as a Workdraft. Without objection it was so ordered.                                                                        
There was no further debate on the bill and Co-Chair John                                                                       
Torgerson noted the committee had already discussed the                                                                         
fiscal notes.                                                                                                                   
Senator Sean Parnell offered a motion to report the bill                                                                        
from committee. There was no objection and it was so                                                                            
BREAK 9:07AM / 9:08AM                                                                                                           
SENATE BILL NO. 95                                                                                                              
"An Act relating to the combination of grades that                                                                              
constitute junior high, middle, or secondary school."                                                                           
BRUCE CAMPBELL, staff to Senator Randy Phillips, spoke to                                                                       
the bill.  He explained this was a priority issue for the                                                                       
Anchorage School Board.                                                                                                         
SB 95 recognized the grades six to eight "middle school"                                                                        
concept. Current statute dealt with "junior high"                                                                               
consisting of seventh, eighth and ninth graders. However,                                                                       
Anchorage and some parts of other school districts had                                                                          
adopted the middle school concept. That meant that the                                                                          
sixth graders were counted as elementary school students                                                                        
even though they were using space at the junior high school                                                                     
rate. This bill would allow elementary students in the                                                                          
sixth grade, when housed in a middle school be counted as                                                                       
secondary students for the purpose of space allocation.                                                                         
Senator Randy Phillips moved for adoption of SB 95 (FIN)                                                                        
Version "I". Senator Al Adams asked for explanation of the                                                                      
differences between this version and the original. Bruce                                                                        
Campbell explained that the first version went into the                                                                         
actual definition of a secondary school student. The                                                                            
Department of Education informed him the real issue was                                                                         
housing and should be located in a different area of                                                                            
statute. The new version had the same concept but was more                                                                      
elegantly drafted.                                                                                                              
He pointed out language on page 3 relating to provisions                                                                        
for bond issues. One of the requirements for a school                                                                           
building project was that the municipality had to                                                                               
demonstrate the need by establishing a long-term enrollment                                                                     
to indicate the current facilities were inadequate. This                                                                        
was the particular area the bill addressed by focusing on                                                                       
the issue of the sixth grade students and whether they were                                                                     
located in a middle school. If so, they could be counted as                                                                     
part of the projections of space requirements.                                                                                  
For more technical detail, Bruce Campbell said the                                                                              
department would need to be consulted.                                                                                          
Senator Al Adams asked if the basic premise was to move                                                                         
sixth graders into a different school category. Bruce                                                                           
Campbell said it was to give the school boards that option.                                                                     
Senator Al Adams pointed out that one of the impacts would                                                                      
be the change of square footage allotments for individual                                                                       
students. In doing so, the square footage would increase to                                                                     
43 square footage per student. He wanted to know if the                                                                         
students were kept in their present situation, wouldn't                                                                         
there be adequate space for each student in the Anchorage                                                                       
School District for the next seven years.  Bruce Campbell                                                                       
deferred to Mike Morgan from the Department of Education.                                                                       
Senator Al Adams pointed out that in rural Alaska there                                                                         
were six schools that had unhoused students who were using                                                                      
hallways and libraries for classrooms. Shouldn't they be                                                                        
addressed first?  Bruce Campbell replied that was a policy                                                                      
question not appropriate for staff to address.                                                                                  
Senator Lyda Green felt the bigger step this bill would                                                                         
take was contained on page 3 line 18. This dictated that a                                                                      
student was considered unhoused if the student attended a                                                                       
school in a temporary facility. She thought that was a                                                                          
total shift from the current policy and wanted to know if                                                                       
that issue was what contributed to the fiscal note. Co-                                                                         
Chair John Torgerson agreed she was probably right but it                                                                       
was really a question of whether a portable building was                                                                        
temporary housing. That had been debated by school                                                                              
districts for years.                                                                                                            
Bruce Campbell responded to Senator Lyda Green's concerns                                                                       
saying it was part of the statutory construction.  He noted                                                                     
page two lines 2 and 3 addressed whether students were                                                                          
considered unhoused. This bill continued the statutory                                                                          
consistency and did not add to the issue, he explained. He                                                                      
detailed other areas of the bill where this was repeated.                                                                       
Co-Chair John Torgerson said that matter would need to be                                                                       
worked through as he had some of the same concerns. Senator                                                                     
Lyda Green did not have the same understanding of the                                                                           
language as the sponsor. She said that while she did not                                                                        
necessarily object to the change, she just wanted the                                                                           
impact clarified.                                                                                                               
The workdraft was adopted by a vote of 7-1-1. Senator Al                                                                        
Adams cast the nay vote. Senator Loren Leman was absent.                                                                        
MIKE MORGAN, PMP, Manager, Facilities Section, Education                                                                        
Support Services, Department of Education, came to the                                                                          
table at the request of Bruce Campbell to address the                                                                           
concerns related to the housing of students. He understood                                                                      
the question to be, "Are students in temporary facilities                                                                       
considered unhoused?" That was currently the case in                                                                            
policy, statute and regulations, he answered.                                                                                   
Co-Chair John Torgerson asked if this bill would change the                                                                     
way the department interpreted unhoused students.  Mike                                                                         
Morgan replied it would change the way the unhoused                                                                             
students would be calculated in that sixth graders, when                                                                        
not in a "case fixed" building, would qualify for 43.75                                                                         
additional square footage over what they currently qualify                                                                      
for. The space allotment for junior and senior high                                                                             
students was 150 square feet per student. For elementary                                                                        
students, that allotment was 106.5 square feet per student.                                                                     
Therefore, using the higher number, middle schools housing                                                                      
sixth graders would reach their capacity sooner under the                                                                       
provisions of this bill.                                                                                                        
Senator Lyda Green clarified that no cost would be incurred                                                                     
until the time when need for a new building was being                                                                           
justified.  Mike Morgan responded that until a school                                                                           
district requested additional space, either an addition to                                                                      
an existing building or a new building, the space                                                                               
allocation would not be considered. It was only in the                                                                          
qualification for new space that the cost would come into                                                                       
play. If a district qualified today for 10,000 square feet                                                                      
all because of sixth graders, if this bill passed the                                                                           
district would then qualify for approximately 15,000 square                                                                     
Co-Chair John Torgerson asked what was the middle school                                                                        
allocation. Mike Morgan said it was determined by the grade                                                                     
of the student, not the building itself. The school could                                                                       
house any combination of students at the discretion of the                                                                      
Co-Chair John Torgerson wanted to know if under current                                                                         
law, in a grade sixth through ninth school, the 6th graders                                                                     
would be calculated at the lower elementary rate.  Mike                                                                         
Morgan confirmed.                                                                                                               
Senator Pete Kelly wanted a brief explanation of what the                                                                       
bill was trying to achieve.  Senator Randy Phillips told of                                                                     
the situation in his community of Eagle River, which was                                                                        
growing. They had almost 2100 students at Chugiak High                                                                          
School that was meant to only house 1750 students.  The                                                                         
Department of Education regulations prevented the community                                                                     
from building another high school until the student                                                                             
population reached a number the department set. He was                                                                          
attempting to relieve the pressure on the high school and                                                                       
give the community the ability to bond itself to build                                                                          
another high school. He estimated the student population at                                                                     
the high school in five years would be 3800 students. He                                                                        
understood it would have statewide affects, but found the                                                                       
situation intolerable and felt other communities would                                                                          
encounter the same problems eventually.                                                                                         
Senator Lyda Green didn't understand how this would                                                                             
alleviate the high school overcrowding situation since it                                                                       
applied to junior high schools. Senator Randy Phillips made                                                                     
an inaudible comment.                                                                                                           
DEBBIE OSSIANDER, Anchorage School District, testified via                                                                      
teleconference from Anchorage in favor of the committee                                                                         
substitute.  As school districts moved toward more local                                                                        
funding for school construction projects, they wanted to                                                                        
have more input in the configuration of the schools and                                                                         
what projects were built. She believed the strong                                                                               
educational arguments for housing sixth graders in middle                                                                       
schools. The district had one school that operated that way                                                                     
now and wanted to look at moving more that direction. The                                                                       
logic of saying that some middle school students qualified                                                                      
for more space than others did not make sense to her. The                                                                       
school board wanted to treat all middle students equally.                                                                       
The most immediate effect of this bill would be seen in the                                                                     
Muldoon area as a new middle school was planned for                                                                             
construction. The school board also wanted to look at                                                                           
changing grade level configurations of two other junior                                                                         
This legislation would also impact school districts that                                                                        
currently housed sixth, seventh and eighth grade students                                                                       
together, but had not qualified for fair and equitable                                                                          
square footage.                                                                                                                 
The main intent of the school board was to allow increased                                                                      
flexibility in program designs so the educational goals                                                                         
could be met.                                                                                                                   
Senator Al Adams asked if even without this legislation,                                                                        
couldn't a new school in Eagle River be funded through                                                                          
local bonds.  He also wanted to know if the witness didn't                                                                      
think the first priority should be to take care of the                                                                          
unhoused students no matter where in Alaska they lived.                                                                         
Debbie Ossiander agreed there was a problem with rural                                                                          
student facilities. However, she noted the overcrowding                                                                         
issues in her community. The school district gained 500-600                                                                     
students every year and flexibility was needed in designing                                                                     
schools. She stated that this problem was broader than just                                                                     
the Eagle River/Chugiak school situation. The primary goal                                                                      
was to deal with the middle school problem.                                                                                     
Senator Al Adams repeated his question about bonding for                                                                        
Anchorage school construction. Debbie Ossiander said that                                                                       
could be done and voters approved bonding where there was a                                                                     
fifty-percent local match. The school board continued to                                                                        
urge that the state continue its responsibility for school                                                                      
construction in the urban areas of the state. The state                                                                         
should pick up some of the cost of school construction.                                                                         
Senator Gary Wilken appreciated the plan to extend the                                                                          
middle school concept.  He wanted more information on the                                                                       
Chugiak situation. Debbie Ossiander responded that in that                                                                      
specific situation, the community had two middle schools                                                                        
and one high school.  One of the middle schools housed                                                                          
sixth, seventh and eight grades. Because that school had                                                                        
those sixth graders, and using the lower allotment for                                                                          
calculations, it was considered to have excess square                                                                           
footage. In order to qualify for additional reimbursement                                                                       
for new construction, the department looked at secondary                                                                        
space as a combination of middle school and high school                                                                         
square footage. This formula made the community ineligible                                                                      
for a new high school. If this bill passed, the Mirror Lake                                                                     
Middle School space allocation would be adjusted and the                                                                        
district would then qualify for a new school.                                                                                   
She noted this was not an immediate problem in the sense                                                                        
that the district did not plan to address the situation for                                                                     
the next couple of years. The intent was to assist in long-                                                                     
range planning for that high school. The Anchorage School                                                                       
Board supported this legislation for reasons beyond the                                                                         
Eagle River high school issue. She repeated the belief that                                                                     
they should have increased flexibility. Current regulations                                                                     
penalized the school board.                                                                                                     
LARRY WIGET, Executive Director, Public Affairs, Anchorage                                                                      
School District, testified via teleconference from                                                                              
Anchorage. He stated the intent was to simply give the                                                                          
Anchorage School District the flexibility in program design                                                                     
with the current education philosophy. It was not the                                                                           
intent to take every eligible sixth grader and give them                                                                        
space based on a secondary school allocation. It was merely                                                                     
an attempt by the school district to have the ability with                                                                      
a sixth grade student who was housed in a middle school                                                                         
program to be allocated the same square footage to meet the                                                                     
program needs of a secondary school.                                                                                            
He felt the fiscal note provided by the department was                                                                          
based on the assumption that every current or future sixth                                                                      
grade student in the State Of Alaska would be calculated at                                                                     
the secondary school level.                                                                                                     
The committee addressed the fiscal notes. Mike Morgan                                                                           
pointed out the fiscal impacts. The department looked at                                                                        
sixth graders, excluding those housed in K-12 schools                                                                           
because the bill didn't address those schools even though                                                                       
they might have some of the same programmatic issues.                                                                           
Typically in evaluating square footage the department                                                                           
looked at a five-year post-occupancy horizon. The out-years                                                                     
were used to determine square footage eligibility.                                                                              
He referred to the cost impact sheet noting that it broke                                                                       
the state into several areas and showed the incremental of                                                                      
the sixth grade class and then only the difference between                                                                      
the 106.25 incurred under a current regulation versus what                                                                      
would happen if the bill passed. It then gave an estimated                                                                      
cost per square foot for the additional square footage.                                                                         
Another handout before the committee was an example to show                                                                     
some of the complexities in determining square footage. It                                                                      
reflected the community of Eagle River. Mike Morgan                                                                             
detailed the process of configuring housing of students.                                                                        
The districts could choose to add additional space to                                                                           
existing buildings or build new schools. There was no limit                                                                     
on how they used the eligibility for additional square                                                                          
footage. This handout showed the community had two mixed                                                                        
grade schools and one middle school that housed only                                                                            
seventh and eighth graders. It also listed all the                                                                              
elementary schools and the Chugiak High School. One column                                                                      
on the handout was labeled "capacity" and was based on                                                                          
square footage.  Another column showed the enrollments of                                                                       
the various grades.  Then a column showed "unhoused                                                                             
students". A negative number meant that that many more                                                                          
students could fit in the school. A positive number showed                                                                      
the amount of overcrowding.                                                                                                     
Senator Randy Phillips wanted to know how many relocatable                                                                      
students were on the Chugiak High campus.  Mike Morgan said                                                                     
hopefully none were included in this figure but they would                                                                      
rely on the school district to provide the information.                                                                         
Senator Randy Phillips asked if the school district                                                                             
included this as part of the housing. Debbie Ossiander                                                                          
answered no.                                                                                                                    
Senator Randy Phillips said the point he was trying to make                                                                     
was that there were nine relocatable buildings on campus,                                                                       
which demonstrated the urgent need for an additional high                                                                       
school in the Eagle River area. The capacity for the school                                                                     
building was 1750 and the campus currently housed 2066                                                                          
Senator Al Adams wanted to know if the current enrollment                                                                       
stayed the same for grades K-6 would there be any                                                                               
overcrowding. Mike Morgan responded that there was                                                                              
currently overcrowding at the high school only. When                                                                            
looking at any individual school, the department did not                                                                        
direct the district to address that particular problem.                                                                         
The department looked at the bottom line to determine                                                                           
qualification for additional square footage. A single                                                                           
school may be under crowded yet the district could still                                                                        
qualify for additional space based on the district totals.                                                                      
Senator Al Adams wanted to know if there were any schools                                                                       
in Alaska that were 150-200 percent over capacity under the                                                                     
current statute. Mike Morgan said there were nine schools                                                                       
that were at 190 percent or higher. A seven-year projection                                                                     
estimated that there would be over twenty schools at that                                                                       
Senator Al Adams stated that the current problem should be                                                                      
taken care of rather than rewriting the statute.                                                                                
Senator Lyda Green asked if the intent of the legislation                                                                       
was to take ninth graders and place them in the junior high                                                                     
schools. Mike Morgan said it would give the school                                                                              
districts the option to determine if that was the best                                                                          
choice for them.  The department did not interfere with how                                                                     
the students were placed.                                                                                                       
Senator Lyda Green asked for the definition of "unhoused."                                                                      
Mike Morgan answered it was the calculation of space that a                                                                     
district would be eligible for funding based on existing                                                                        
square footage and projected population.  Senator Lyda                                                                          
Green then asked if any "relocatable building" was counted                                                                      
as unhoused. Mike Morgan responded that the square footage                                                                      
from temporary buildings was identified but not counted.                                                                        
This was set in both statute and in regulation.                                                                                 
Senator Lyda Green wanted to know if there was a negative                                                                       
impact for school districts if they had lots of students                                                                        
housed in relocatables. She had heard the discussion before                                                                     
and she thought there was another calculation that denied                                                                       
certain funding to the school districts. Mike Morgan was                                                                        
unaware of any.                                                                                                                 
Co-Chair John Torgerson asked if there was anything                                                                             
stopping the school districts from building to a higher                                                                         
standard than the department currently outlined. He                                                                             
understood that the districts could do that. They just                                                                          
wouldn't be subject to the full reimbursable rate for the                                                                       
entire square footage. Mike Morgan said that was exactly                                                                        
correct. To facilitate 100 percent locally funded projects                                                                      
the department passed regulations that exempted the square                                                                      
footage of the portion of the facility that were locally                                                                        
funded and managed. He noted the example of building                                                                            
oversized gyms to be used as community buildings.  The                                                                          
extra square footage was not counted against them.                                                                              
Co-Chair John Torgerson wanted to know if it would affect                                                                       
any other reimbursement program. Mike Morgan could not                                                                          
think of any except for additional operational costs to the                                                                     
district, such as heating.                                                                                                      
Co-Chair John Torgerson asked if the department was                                                                             
committed to the $97 million fiscal note. Mike Morgan                                                                           
Co-Chair John Torgerson asked this to be put into                                                                               
perspective with the recent bond approval in Anchorage.  He                                                                     
wanted to know the immediate impact.  He didn't believe the                                                                     
impact would be felt in FY01 as noted in the fiscal note.                                                                       
He understood the intent to show the total impact if many                                                                       
more schools were built.                                                                                                        
Mike Morgan responded that there was one project the                                                                            
Anchorage School District considered submitting with the                                                                        
passage of the bond proposition. However, that school would                                                                     
not have qualified in light of the other school                                                                                 
construction in the community.                                                                                                  
Co-Chair John Torgerson asked if the department had                                                                             
discussed splitting the difference in the space allotment                                                                       
for the middle schools housing sixth graders.  Mike Morgan                                                                      
said the standards were obtained from the Council for                                                                           
Educational Facility Planners, an international                                                                                 
organization that worked on school issues.  The department                                                                      
was reviewing those standards and expected to finish the                                                                        
analysis in the next two months.  They would be in a better                                                                     
position to respond then.                                                                                                       
Co-Chair John Torgerson wanted to know if the review was                                                                        
warranted.  Mike Morgan responded that there had been                                                                           
enough questions over the past year about space guidelines                                                                      
for all levels to justify the review.  Co-Chair John                                                                            
Torgerson asked if the department was therefore looking at                                                                      
the broad picture of increasing the square footage for all                                                                      
grade levels.  Mike Morgan confirmed.                                                                                           
Co-Chair John Torgerson asked if most of the districts had                                                                      
adopted the middle school concept.  Mike Morgan said there                                                                      
were few using the sixth graders. There were more districts                                                                     
using just the seventh and eighth grades. Senator Randy                                                                         
Phillips wanted to know which districts so he could get a                                                                       
percentage of students in the state.  Mike Morgan would get                                                                     
that information.                                                                                                               
Senator Gary Wilken asked if with this legislation, the                                                                         
Fairbanks School District built another school how would                                                                        
this legislation affect it.  Mike Morgan answered.  This                                                                        
would only affect the schools built for the middle school                                                                       
configurations. He detailed.                                                                                                    
Senator Gary Wilken wanted to know if the fiscal note                                                                           
assumed that all new buildings would be constructed under                                                                       
the middle school configuration.  Mike Morgan replied that                                                                      
it assumed all that qualified would.                                                                                            
Senator Gary Wilken was confused about information on the                                                                       
spreadsheet. Were the terms "unhoused" and "excess                                                                              
capacity" used interchangeably? Mike Morgan affirmed.                                                                           
Senator Gary Wilken wanted to know how the spreadsheet                                                                          
would change if the legislation passed. Mike Morgan                                                                             
explained that the items, Mirror Lake and Birchwood,                                                                            
showing negative numbers in the unhoused category would                                                                         
decrease. In the case of Birchwood, he speculated that the                                                                      
number would become positive.                                                                                                   
Tape: SFC - 99 #112, Side B    9:53 AM                                                                                          
Mike Morgan continued saying that the school could then                                                                         
qualify for additional school construction.                                                                                     
Senator Randy Phillips qualified that this school was an                                                                        
ABC school and was different from the rest. He felt the                                                                         
school board members could explain the differences. Mike                                                                        
Morgan referred to the Mirror Lake School, using it as an                                                                       
example instead. That school would then become closer to                                                                        
qualifying for additional space.                                                                                                
Senator Gary Wilken asked if by decreasing excess capacity                                                                      
it would drive the decision to build a new high school. He                                                                      
could not make the connection. Mike Morgan responded that                                                                       
because the department did not look at were secondary                                                                           
square footage was used-in the middle school or high                                                                            
school- the district could qualify for new construction. If                                                                     
the excess square footage were used up for secondary                                                                            
students, the district would meet its capacity level                                                                            
Debbie Ossiander commented on the bond package that had                                                                         
just passed. Even if the district qualified for a great                                                                         
amount of additional funding, that did not mean they would                                                                      
take advantage of it all.                                                                                                       
Co-Chair John Torgerson wanted the department to come back                                                                      
with more information on the middle school concept and how                                                                      
a compromise in square footage could be reached.  He was                                                                        
concerned with Senator Al Adams's points as well as Senator                                                                     
Randy Phillips situation.                                                                                                       
He wanted the fiscal note to reflect the actual bond                                                                            
package items rather than all students who could possibly                                                                       
be changed.  Lastly, he wanted to know the immediate impact                                                                     
if this were to be retroactive.                                                                                                 
Mike Morgan noted that if there were an approved project,                                                                       
the square footage would already be set.                                                                                        
Co-Chair John Torgerson felt the fiscal note was                                                                                
considerable overstated.                                                                                                        
Senator Lyda Green believed a comparison of costs per                                                                           
student at a middle school versus a junior high would be                                                                        
much higher. Almost a quarter of teaching time was lost                                                                         
under the middle school concept. She supported the intent                                                                       
of this bill, but she did not want to encourage districts                                                                       
to adopt the middle school concept.                                                                                             
Senator Randy Phillips wanted the information by Friday and                                                                     
asked if that was possible.  Mike Morgan was unsure. He                                                                         
wanted time to work on the fiscal note changes.  Co-Chair                                                                       
John Torgerson commented that the new middle school concept                                                                     
might be the most difficult. He felt that the witness                                                                           
should be able to adjust the fiscal note based on                                                                               
information about school district's plans.                                                                                      
Senator Al Adams wanted information on the unhoused                                                                             
Co-Chair John Torgerson ordered the bill held in committee.                                                                     
CS FOR SENATE BILL NO. 128(RES)                                                                                                 
"An Act moving the termination date of the Board of                                                                             
Storage Tank Assistance to June 30, 1999; relating to                                                                           
the storage tank assistance fund; relating to                                                                                   
financial assistance for owners and operators of                                                                                
underground petroleum storage tank systems; relating                                                                            
to discharges from underground petroleum storage tank                                                                           
systems; and providing for an effective date."                                                                                  
The last hearing ended with debate over the amount of the                                                                       
grant programs.                                                                                                                 
Senator Al Adams reminded members that the committee                                                                            
planned to look at the net assets of the storage tank                                                                           
owners.  Co-Chair John Torgerson affirmed but in his                                                                            
opinion, the net assets should not be considered.                                                                               
Senator Al Adams wanted to know how the "mom and pop"                                                                           
operations would be protected. It was noted that the                                                                            
qualifications had nothing to do with the size of the tank,                                                                     
just the amount of assets of the owner.                                                                                         
AT EASE 10:06AM / 10:09AM                                                                                                       
There was discussion as to appropriate drafted language                                                                         
that was close to the committee's intent.                                                                                       
Senator Dave Donley moved to adopt Amendment #1 with the                                                                        
intent that the drafters could conform to fit the current                                                                       
CS. This would expand the allowable expenditures from the                                                                       
state from the fund to include legal and regulatory                                                                             
expenses. There was no objection and it was adopted.                                                                            
Senator Gary Wilken was concerned with the million-dollar                                                                       
cap.  In the fuel business, it didn't take long to accrue                                                                       
one million dollars in gross assets. Co-Chair John                                                                              
Torgerson noted the struggle was with how strong the cap                                                                        
should be. There was debate.                                                                                                    
Senator Al Adams referred to Section 10 page 5 lines 14-16.                                                                     
It stated that the department might not approve for a                                                                           
grant, a project that was less than twenty-five percent of                                                                      
the owner's assets. He wanted the department to speak to                                                                        
STEVEN DAUGHERETY, Assistant Attorney General, Natural                                                                          
Resources Section, Civil Division, Department of Law came                                                                       
to the table. He stated that the tank owner with assets                                                                         
over $1 million who only wanted a grant for $150,000 would                                                                      
not qualify.                                                                                                                    
Senator Al Adams wanted to make sure the smaller operators                                                                      
would be helped. This language would not do that. He felt                                                                       
that if the project cost under twenty-five percent, the                                                                         
owner should still qualify. Steve Daugherety stated the                                                                         
current language.                                                                                                               
Senator Dave Donley noted this matter should not be hard to                                                                     
fix.  He suggested a provision to allow a grant for an                                                                          
amount below the twenty-five percent if the total assets                                                                        
were under $1 million.  Steve Daugherety commented that if                                                                      
the committee wanted to do that, the provision could limit                                                                      
to $1 million in assets and remove the four-to-one ratio                                                                        
Senator Al Adams noted the problem was that the co-chair                                                                        
wanted to keep the twenty five-percent. Co-Chair John                                                                           
Torgerson understood and agreed the drafters could address                                                                      
the issue. He would have an amendment drafted to reflect                                                                        
[Pause on the record]                                                                                                           
JOHN BARNETT, Executive Director, Board of Storage Tank                                                                         
Facilities, Department of Environmental Conservation                                                                            
testified. He gave the board's perspective that the net                                                                         
worth was the true determination of the wealth of the                                                                           
operators.  He agreed with Senator Gary Wilken that the                                                                         
value of almost all the small operators would surpass the                                                                       
$1 million cap. He detailed the types of business this                                                                          
would affect, noting that many roadside stations housed the                                                                     
owner and including the buildings and equipment was easily                                                                      
valued at over $1 million.                                                                                                      
The $60,000 limit restrictions for the tank upgrades                                                                            
program would essentially eliminate the grants since no                                                                         
owner with assets over $250,000 would qualify.                                                                                  
He asked for language to deny requests for loans if the                                                                         
work had already been completed or if the loan was for                                                                          
reimbursement of expenses already paid. He gave a scenario                                                                      
of an owner getting a low-interest loan for a project                                                                           
already paid-for then opening a bar down the street.  If                                                                        
the loan were defaulted, the state would end up owning a                                                                        
Co-Chair John Torgerson interrupted and asked if the                                                                            
assumption was that every loan application would be                                                                             
approved.  John Barnett said it was not. Co-Chair John                                                                          
Torgerson questioned why the department would approve such                                                                      
a loan.  John Barnett stated that the department had to                                                                         
have authority to deny a loan. Unless there was specific                                                                        
language to address it, the department would be required to                                                                     
loan the funds for any projects that qualified. Senator                                                                         
Dave Donley said that common sense dictated that the co-                                                                        
chair was correct. However, with the administrative                                                                             
process, appeals hearings and court rulings, that                                                                               
assumption could not be relied upon.                                                                                            
John Barnett continued that there needed to be language to                                                                      
authorize the department to put the legislation into                                                                            
John Barnett suggested transitional language. The original                                                                      
recommendation was to delete the upgrade and closure                                                                            
program. This was because there were only 158 applicants on                                                                     
the list. Under the current language, all of the applicants                                                                     
would be eliminated from qualification.                                                                                         
Another concern was with the effective dates. They                                                                              
recommended inserting the income criteria into the language                                                                     
with a July 1, 2000 for the loan program.                                                                                       
The board recommended $1 million in net worth.                                                                                  
He concluded by sharing his experiences as a mining                                                                             
geologist and more recently with the board.  He commended                                                                       
the department for not issuing any fines since the                                                                              
inception of this program.  He noted however, that the                                                                          
federal Environmental Protection Agency had imposed fines.                                                                      
He had prepared his suggestions in the form of amendments                                                                       
if the committee was interested.                                                                                                
Senator Pete Kelly wanted to know if any problems had been                                                                      
encountered for sites that had been cleaned up.  He                                                                             
referred to a "Letter of no further action."  It seemed to                                                                      
him that had been a problem.  John Barnett said it had been                                                                     
a problem more so in the past than currently.  The                                                                              
hesitation was because of the potential liability of the                                                                        
state in giving the assurance to future buyers that there                                                                       
was no further contamination on the site.                                                                                       
JIM HAYDEN, Program Manager, Storage Tank Program,                                                                              
Department of Environmental Conservation came to the table.                                                                     
Senator Pete Kelly asked him how many "letters" had been                                                                        
issued.  Jim Hayden responded that of 1700 sites that had                                                                       
participated in the program and of those, 700 had been                                                                          
given No Further Action letters.  Senator Pete Kelly wanted                                                                     
to know if some of the remaining might never qualify for                                                                        
the letter. Jim Hayden said some had minimal release and                                                                        
others were very contaminated.  Senator Pete Kelly wanted                                                                       
to know how many sites had tested clean but did not have                                                                        
the letter yet.  Jim Hayden knew there were some would have                                                                     
to research to find the number.                                                                                                 
Senator Gary Wilken referred to Closure one, two and three.                                                                     
Closure one was Upgrades Grants Pending Issue for 1999. Was                                                                     
this covered under current legislation and would proceed                                                                        
with no changes if this legislation passed? Jim Hayden                                                                          
noted the list was for FY00 and would be affected by                                                                            
whatever legislation was passed. He said that was the first                                                                     
part of the closure and the grants were issued.                                                                                 
There was clarification on the categories that would be                                                                         
affected by this legislation. Closure two would be                                                                              
Senator Lyda Green noted the other committee members did                                                                        
not have the closure information.                                                                                               
Senator Gary Wilken wanted comment on the million-dollar                                                                        
income limit.  Jim Hayden said originally the department                                                                        
opposed the legislation on a general fairness issue.  They                                                                      
did have a waiting list and no applications had been                                                                            
accepted since 1986.  The department had no position on the                                                                     
financial cap since they had no financial information.                                                                          
Co-Chair John Torgerson ordered the bill held and said he                                                                       
would have amendments drafted to address the concerns                                                                           
AT EASE 10:36AM / 10:37AM                                                                                                       
CS FOR HOUSE JOINT RESOLUTION NO. 13(HES)                                                                                       
Relating to using oil spill settlement funds to create                                                                          
a long-term research and monitoring endowment.                                                                                  
WILDA RODMAN, staff to Representative Gene Therriault,                                                                          
testified to the bill. She read the sponsor statement into                                                                      
the record. HJR 13 supported the recent action of the Exxon                                                                     
Valdez Oil Spill Trustee Council to create a long-term                                                                          
research and monitoring endowment using $115 million of                                                                         
expected reserve.                                                                                                               
The bill also would encourage the Trustee Council to endow                                                                      
chairs in the sciences at the University of Alaska and                                                                          
supports Trustee efforts work with the congressional                                                                            
delegation to obtain the necessary investment authority to                                                                      
increase the earnings on remaining settlement funds.                                                                            
The EVOS Trustee Council allocated money obtained from                                                                          
settlement of the Exxon Valdez spill litigation.  Over the                                                                      
years, EVOS funds had largely been used to purchase land                                                                        
for habitat preservation, and have been lacking in the area                                                                     
of research.  The sponsor believed this had left a critical                                                                     
gap in our understanding of this spill and how to respond                                                                       
in the future. Endowing scientific chairs at the University                                                                     
would help increase available baseline data, enhance the                                                                        
biological resources of the northern Gulf of Alaska, and                                                                        
significantly improve spill-related technology, restoration                                                                     
methods and ecosystem preservation. For example, it was                                                                         
widely understood that many aspects of the Exxon Valdez oil                                                                     
spill response, such as high-pressure washing of beaches                                                                        
and rock washing, might have caused more long-term harm                                                                         
than benefit.  We also need to know if types of marine                                                                          
ecosystems were extra sensitive to certain cleanup                                                                              
activities, and if so, how the state should respond to a                                                                        
spill in those areas.                                                                                                           
An endowment of this nature would fulfill the intent of the                                                                     
Exxon Valdez oil settlement and the mission of the Trustee                                                                      
Council, which was to restore, rehabilitate, replace,                                                                           
enhance, or acquire equivalent resources and services in                                                                        
the oil spill region.                                                                                                           
MOLLY MCCAMMON, Executive Director, Exxon Valdez Oil Spill                                                                      
Trustee Council, testified via teleconference from                                                                              
Anchorage. The council supported the House Finance                                                                              
committee substitute to the resolution. She explained that                                                                      
the Trustee Council had recently voted to establish a long-                                                                     
term research and monitoring endowment.  They were now in                                                                       
the process of developing a long-term research and                                                                              
monitoring plan for the northern Gulf of Alaska. As part of                                                                     
development of that plan, EVOS would be considering                                                                             
endowing certain scientific chairs at the University.  To                                                                       
this date, the council had not taken action on endowing                                                                         
university chairs. The first priority was to develop the                                                                        
long-term research plan, then determine how any endowed                                                                         
chairs might fit into that research plan.                                                                                       
Senator Al Adams asked if there were plans or programs                                                                          
where the money would be spent.  Molly McCammon replied                                                                         
they were in the process of developing those programs.  She                                                                     
listed some of the areas of planned research. The council                                                                       
wanted to monitor key aspects of the spill area such as                                                                         
oceanographic temperature, currents and those forces that                                                                       
affected the productivity of the marine resources. There                                                                        
would also be monitoring of key species: harbor seals,                                                                          
salmon, herring and those fish that were part of the                                                                            
ecosystem. They would also target questions that resources                                                                      
managers needed answered in order to better manage the                                                                          
resources. They would also tie in traditional ecosystem                                                                         
knowledge and work with stakeholder and local residents so                                                                      
they were part of the overall program.                                                                                          
WENDY REDMOND, Vice President, University Relations,                                                                            
University of Alaska testified.  The university supported                                                                       
the bill. "It would serve a great need and a great                                                                              
opportunity for leveraging some of the investment into the                                                                      
Senator Gary Wilken offered a motion to report HJR 13 (FIN)                                                                     
out of committee. There was no objection and it was so                                                                          
Senator Torgerson adjourned the meeting at 10:43AM.                                                                             
SFC-99 (19) 4/27/99                                                                                                             

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