Legislature(2013 - 2014)SENATE FINANCE 532

03/28/2013 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 22 CRIMES; VICTIMS; CHILD ABUSE AND NEGLECT TELECONFERENCED
Moved CSSB 22(FIN) Out of Committee
*+ SB 83 INTEREST ON CORPORATION INCOME TAX TELECONFERENCED
Moved CSSB 83(FIN) Out of Committee
+ SB 57 LITERACY, PUPIL TRANSP, TEACHER NOTICES TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  SENATE FINANCE COMMITTEE                                                                                      
                       March 28, 2013                                                                                           
                         9:05 a.m.                                                                                              
                                                                                                                                
9:05:58 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Vice-Chair  Fairclough called  the  Senate Finance  Committee                                                                   
meeting to order at 9:05 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Kevin Meyer, Co-Chair                                                                                                   
Senator Anna Fairclough, Vice-Chair                                                                                             
Senator Click Bishop                                                                                                            
Senator Mike Dunleavy                                                                                                           
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Pete Kelly, Co-Chair                                                                                                    
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Christine  Marasigan,  Staff,  Senator Kevin  Meyer;  Senator                                                                   
Peter  Micciche,  Sponsor;  Idonna  Peiper  Nelson,  CFO  and                                                                   
Partner,  Principle Davis  Constructors  and Engineers  Inc.;                                                                   
Tim  Lamkin,   Staff,  Senator   Gary  Stevens;   Amy  Lujan,                                                                   
Executive  Director, Alaska  Association  of School  Business                                                                   
Officials;   Bruce   Johnson,  Executive   Director,   Alaska                                                                   
Council of School Administrators..                                                                                              
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
John  Mackinnon,   Executive  Director,  Associated   General                                                                   
Contractors    of    Alaska,   Anchorage;    Deena    Paramo,                                                                   
Superintendent,  Mat-Su  Borough   School  District,  Mat-Su;                                                                   
Luke  Fulp, Chief  Business  Officer, Mat-Su  Borough  School                                                                   
District,  Mat-Su;  Dave  Jones,   Assistant  Superintendent,                                                                   
Kenai Peninsula Borough School District, Kenai..                                                                                
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 22     CRIMES; VICTIMS; CHILD ABUSE AND NEGLECT                                                                              
                                                                                                                                
          CSSB 22(FIN)  was REPORTED out of committee  with a                                                                   
          "do  pass"  recommendation  and with  a  previously                                                                   
          published    zero   fiscal   note:    FN7(DHS),   a                                                                   
          previously  published  indeterminate  fiscal  note:                                                                   
          FN5(ADM),   a  previously  published   zero  fiscal                                                                   
          note: FN2(DPS),  an indeterminate fiscal  note from                                                                   
          the  Department of Administration,  an zero  fiscal                                                                   
          note from  the Department of Law,  an indeterminate                                                                   
          fiscal note  from the Department of  Corrections, a                                                                   
          zero  fiscal  note from  the Department  of  Public                                                                   
          Safety, and  an indeterminate fiscal  note from the                                                                   
          Alaska Court System.                                                                                                  
                                                                                                                                
SB 57     LITERACY, PUPIL TRANSP, TEACHER NOTICES                                                                               
                                                                                                                                
          SB 57 was HEARD and HELD in committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
SB 83     INTEREST ON CORPORATION INCOME TAX                                                                                    
                                                                                                                                
          SB 83 was REPORTED out of Committee with a "do                                                                        
          pass" recommendation and with a new indeterminate                                                                     
          fiscal note from the Department of Revenue.                                                                           
[BSW1]                                                                                                                          
                                                                                                                                
[Secretary Note: The audio was unrecoverable from the start                                                                     
of the meeting at 9:05:58 until the AT EASE at 9:08:51.]                                                                        
                                                                                                                                
SENATE BILL NO. 22                                                                                                            
                                                                                                                                
     "An  Act relating  to the  commencement  of actions  for                                                                   
     felony  sex trafficking  and  felony human  trafficking;                                                                   
     relating  to the crime  of sexual  assault; relating  to                                                                   
     the crime  of unlawful  contact; relating to  forfeiture                                                                   
     for certain  crimes involving prostitution;  relating to                                                                   
     the  time in  which  to commence  certain  prosecutions;                                                                   
     relating  to release  for  violation of  a condition  of                                                                   
     release  in connection with  a crime involving  domestic                                                                   
     violence;   relating   to    interception   of   private                                                                   
     communications  for  certain  sex trafficking  or  human                                                                   
     trafficking  offenses; relating  to use  of evidence  of                                                                   
     sexual  conduct concerning  victims  of certain  crimes;                                                                   
     relating  to  procedures  for  granting  immunity  to  a                                                                   
     witness   in   a  criminal   proceeding;   relating   to                                                                   
     consideration  at sentencing  of the  effect of  a crime                                                                   
     on  the  victim;  relating   to  the  time  to  make  an                                                                   
     application for  credit for time served in  detention in                                                                   
     a  treatment   program  or   while  in  other   custody;                                                                   
     relating  to suspending imposition  of sentence  for sex                                                                   
     trafficking;  relating  to   consecutive  sentences  for                                                                   
     convictions   of   certain    crimes   involving   child                                                                   
     pornography  or indecent  materials to minors;  relating                                                                   
     to  the referral  of sexual  felonies  to a  three-judge                                                                   
     panel;  relating to  the definition  of 'sexual  felony'                                                                   
     for sentencing  and probation for conviction  of certain                                                                   
     crimes;  relating  to the  definition  of "sex  offense"                                                                   
     regarding   sex  offender   registration;  relating   to                                                                   
     protective  orders for stalking  and sexual  assault and                                                                   
     for  a crime  involving domestic  violence; relating  to                                                                   
     the  definition  of  'victim   counseling  centers'  for                                                                   
     disclosure of  certain communications  concerning sexual                                                                   
     assault  or  domestic  violence;   relating  to  violent                                                                   
     crimes  compensation;  relating to  certain  information                                                                   
     in retention  election of  judges concerning  sentencing                                                                   
     of   persons   convicted   of  felonies;   relating   to                                                                   
     remission  of   sentences  for  certain   sexual  felony                                                                   
     offenders;  relating  to   the  subpoena  power  of  the                                                                   
     attorney  general  in  cases  involving the  use  of  an                                                                   
     Internet   service  account;   relating  to   reasonable                                                                   
     efforts in  child-in-need-of-aid cases  involving sexual                                                                   
     abuse   or  sex  offender   registration;  relating   to                                                                   
     mandatory reporting  by athletic coaches of  child abuse                                                                   
     or  neglect;  making  conforming   amendments;  amending                                                                   
     Rules  16,  32.1(b)(1),  and 32.2(a),  Alaska  Rules  of                                                                   
     Criminal  Procedure,   Rule  404(b),  Alaska   Rules  of                                                                   
     Evidence,  and  Rule  216,  Alaska  Rules  of  Appellate                                                                   
     Procedure; and providing for an effective date."                                                                           
                                                                                                                                
Senator  Bishop   MOVED  to  ADOPT  the   proposed  committee                                                                   
substitute  for SB  22,  Work Draft  28-GS1587\P  (Strabaugh,                                                                   
3/25/13) as a working document.                                                                                                 
                                                                                                                                
Vice-Chair   Fairclough   OBJECTED   for   the   purpose   of                                                                   
discussion.                                                                                                                     
                                                                                                                                
CHRISTINE  MARASIGAN, STAFF, SENATOR  KEVIN MEYER,  explained                                                                   
the  changes  in  the  new  committee  substitute  (CS).  She                                                                   
reported that  on ppage[BSW2] 19, lines 4 to 5 beginning with                                                                   
"or," and  ending in "duties,"  and lines  22 to 31,  and all                                                                   
of  Section 37  were deleted  from the  previous version.  In                                                                   
addition, on  ppage 20, line 2  the words "or  volunteer" was                                                                   
removed.   She  noted   that   the  changes   were  made   in                                                                   
consultation with the Department of Law.                                                                                        
Vice-Chair  Fairclough WITHDREW  her  OBJECTION. There  being                                                                   
NO further OBJECTION, Work Draft 28-GS1587\P was ADOPTED.                                                                       
                                                                                                                                
Senator  Bishop   MOVED  to  REPORT   CSSB  22(FIN)   out  of                                                                   
committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  notes. There being NO OBJECTION,  it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CSSB 22(FIN) was  REPORTED out of committee with  a "do pass"                                                                   
recommendation  and with a  previously published  zero fiscal                                                                   
note FN7 (DHS),  a previously published  indeterminate fiscal                                                                   
note FN5 (ADM),  a previously published zero  fiscal note FN2                                                                   
(DPS), a  new indeterminate fiscal  note from  the Department                                                                   
of  Administration,   a  new   zero  fiscal  note   from  the                                                                   
Department of Law,  a new indeterminate fiscal  note from the                                                                   
Department of  Corrections, a new  zero fiscal note  from the                                                                   
Department of Public  Safety, and a new  indeterminate fiscal                                                                   
note from the Alaska Court System.                                                                                              
                                                                                                                                
9:08:51 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:12:52 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair   Fairclough  commented   that  there  were   some                                                                   
technical  difficulties  with the  meeting's  audio feed  and                                                                   
that  the  earlier  portion  of  the  meeting  had  not  been                                                                   
recorded. She reported  that the committee substitute  for SB                                                                   
22, Work  Draft 28-GS1587\P had  been adopted and  moved from                                                                   
committee.                                                                                                                      
                                                                                                                                
SENATE BILL NO. 83                                                                                                            
                                                                                                                                
     "An  Act relating  to the  corporation  income tax;  and                                                                   
     relating  to  the  computation  of  interest  under  the                                                                   
     look-back  method applicable  to long-term contracts  in                                                                   
     the Internal Revenue Code."                                                                                                
                                                                                                                                
9:14:08 AM                                                                                                                    
                                                                                                                                
Senator  Bishop   MOVED  to  ADOPT  the   proposed  committee                                                                   
substitute  for  SB  83,  Work  Draft  28-LS0634\U  (Bullock,                                                                   
3/27/13)  as a working  document. There  being NO  OBJECTION,                                                                   
it was so ordered.                                                                                                              
                                                                                                                                
CHRISTINE  MARASIGAN, STAFF, SENATOR  KEVIN MEYER,  discussed                                                                   
the change  in the  CS. She noted  that on  ppage 1,  line 11                                                                   
the  retroactive effective  date  was changed  to January  1,                                                                   
2013.                                                                                                                           
                                                                                                                                
SENATOR  PETER  MICCICHE,  SPONSOR,   read  from  a  prepared                                                                   
statement.  He  explained the  legislation.  He  communicated                                                                   
that in  addition to its focus  on corporate income  tax, the                                                                   
bill  was about  fairness and  simplicity.  He detailed  that                                                                   
currently  for   state  and  federal  corporate   income  tax                                                                   
purposes  contractors undertaking  large multi-year  projects                                                                   
such  as highways,  schools, and  universities were  required                                                                   
to  estimate their  total  profit  on a  project  and to  pay                                                                   
income  tax on  the portion  of  the project  completed in  a                                                                   
given tax year.  He stated that it was impossible  to predict                                                                   
in the  first year  of the  project what  the actual  cost or                                                                   
profit  would be.  Upon completion  of the  project and  once                                                                   
the profit amount  had been determined, the  contractor filed                                                                   
look-back  taxes (an  amended  return).  A contractor  either                                                                   
owed additional taxes  or received a refund  based on whether                                                                   
the profit  had been  over or  under estimated; interest  was                                                                   
owed on the additional taxes due.                                                                                               
                                                                                                                                
Senator Micciche  relayed that although the  Internal Revenue                                                                   
Service  (IRS) code  had a  specific provision  for over  and                                                                   
under  payments   of  estimated  taxes  for   the  multi-year                                                                   
projects,  existing   state  laws  considered   the  payments                                                                   
delinquent  and  applied an  11  percent interest  rate.  The                                                                   
state made  no distinction between  its system  of estimating                                                                   
taxes  based  on a  contractor's  best  knowledge and  a  tax                                                                   
payer who  did not  make a timely  filing. He believed  there                                                                   
should be a  distinction between a tax penalty  on delinquent                                                                   
taxes and an  amended return. Conversely, the  bill would tie                                                                   
the interest  rate to  a recognized index  as opposed  to the                                                                   
11  percent  interest   currently  paid  by  the   state  and                                                                   
contractors in the current outdated system.                                                                                     
                                                                                                                                
Senator  Micciche  expounded  that  the  bill  corrected  the                                                                   
interest issue,  simplified the process for  contractors, and                                                                   
adopted the IRS  bulletin rates for look-back  taxes on long-                                                                   
term projects allowing  contractors and the state  to use the                                                                   
same interest  pay schedules for  state taxes as  the federal                                                                   
system. Currently  the interest rate was 2  percent for under                                                                   
payments  when the profit  had been  underestimated and  over                                                                   
payments when the  state owed money in the  amount of $10,000                                                                   
or  less; interest  was currently  levied at  0.5 percent  on                                                                   
amounts  greater than $10,000.  The rate  fluctuated and  was                                                                   
published quarterly.  The CS specified the tax  policy bullet                                                                   
would  be  in effect  for  the  2013  calendar tax  year.  He                                                                   
communicated that  the bill would  primarily impact  Alaska C                                                                   
corporation   contractors,   lenders,  and   surety   bonding                                                                   
companies; it  would ultimately  allow for greater  cash flow                                                                   
that  would   be  reinvested  in  Alaska's   communities.  He                                                                   
pointed to  several letters  of support  (copy on file)  from                                                                   
general    contractors,    the   Association    of    General                                                                   
Contractors, bankers,  public accountants, surety  or bonding                                                                   
brokers,  and  other.  He opined  that  the  legislation  was                                                                   
beneficial  for the  state,  private sector  businesses,  and                                                                   
Alaskans and it was an issue of fairness.                                                                                       
                                                                                                                                
Senator Olson asked  whether there was any opposition  to the                                                                   
bill. Senator  Micciche was not  aware of anyone  who opposed                                                                   
the modernization of the state's interest rates.                                                                                
                                                                                                                                
Senator Olson  inquired about the administration's  position.                                                                   
Senator Micciche  responded that he  could not speak  for the                                                                   
administration,  but  believed   the  Department  of  Revenue                                                                   
(DOR) was in support of the bill.                                                                                               
                                                                                                                                
9:19:30 AM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough OPENED public testimony.                                                                                  
                                                                                                                                
IDONNA  PEIPER  NELSON,  CFO  AND  PARTNER,  PRINCIPLE  DAVIS                                                                   
CONSTRUCTORS AND  ENGINEERS INC., spoke in support  of SB 83.                                                                   
She  believed that  the issue  was  not previously  addressed                                                                   
due  to the  complexity of  the  issue. She  stated that  the                                                                   
interest rate  was assessed on  a tax that was  difficult for                                                                   
the  taxpayer  to  understand  or  was  even  aware  of.  She                                                                   
explained  that  a  large  contractor   was  defined  by  the                                                                   
federal government  as a contractor  bringing in  $10 million                                                                   
or  more per  year  in revenue;  most  contractors fell  into                                                                   
that  category.  When a  contractor  began a  fixed-fee  job,                                                                   
they did  not know exactly how  profitable it would  be; risk                                                                   
was reduced as  the project progressed and more  became known                                                                   
about  exact costs.  Typically contractors  started out  with                                                                   
conservative  cost  estimates;  each  year  the  contractor's                                                                   
current estimate  was applied to  the amount of  revenue they                                                                   
had and taxes were paid on the total amount.                                                                                    
                                                                                                                                
Ms.  Nelson communicated  that  the legislation  would  allow                                                                   
contractors  to pay  taxes  retroactively  once actual  costs                                                                   
were known. The  objective was to make everyone  "whole." She                                                                   
detailed that  if a  contractor was  not conservative  in the                                                                   
early  years of  a project  they  would lose  the respect  of                                                                   
their  banker,  bonding  company,  shareholders,  and  others                                                                   
involved  in the project.  She furthered  that because  taxes                                                                   
were  paid and  income was  reported based  on estimates,  it                                                                   
was  crucial that  estimates  were  conservative  and that  a                                                                   
gain was shown  by the project's end. She stated  that a good                                                                   
contractor would  always have look-back taxes  and an ethical                                                                   
contractor  always  paid taxes  owed  on time.  She  stressed                                                                   
that  Davis Constructors  was  never  delinquent  in its  tax                                                                   
payments.  She opined that  the high  interest rate  intended                                                                   
to deter companies  from making late tax payments  was fairly                                                                   
insulting.                                                                                                                      
                                                                                                                                
Ms. Nelson  continued to discuss  the company's work  and its                                                                   
contribution to  the state. She conveyed that  any additional                                                                   
profits that  would result from  decreased interest  on look-                                                                   
back taxes would  flow back into the business.  She discussed                                                                   
that federal rates  charged on look-back taxes  were designed                                                                   
to  recognize that  the factor  was out  of the  contractors'                                                                   
control.  Under  the  circumstance,  the  federal  government                                                                   
allowed  businesses to  pay the  same interest  rate that  it                                                                   
paid a  tax payer  who had overpaid  taxes. She relayed  that                                                                   
an  unethical  contractor  could  technically  make  interest                                                                   
money   from   the   federal   and   state   governments   by                                                                   
overestimating its ultimate profits.                                                                                            
                                                                                                                                
9:28:11 AM                                                                                                                    
                                                                                                                                
JOHN  MACKINNON,   EXECUTIVE  DIRECTOR,  ASSOCIATED   GENERAL                                                                   
CONTRACTORS  OF   ALASKA,  ANCHORAGE  (via   teleconference),                                                                   
spoke  in support  of  SB 83.  He  emphasized  that the  bill                                                                   
would bring the  interest rate on the taxes  due in-line with                                                                   
current  rates and  would fluctuate  with  the federal  rate,                                                                   
which could  change quarterly.  The bill  would separate  the                                                                   
look-back  provision and  interest  on the  taxes from  other                                                                   
sections of the  code that were considered  delinquent taxes.                                                                   
He stressed  that the taxes due  were a result of  an amended                                                                   
return and were  not delinquent. He believed  the bill helped                                                                   
level the  playing field for  C corporations and  other types                                                                   
of corporations.                                                                                                                
                                                                                                                                
Vice-Chair Fairclough CLOSED public testimony.                                                                                  
                                                                                                                                
Vice-Chair  Fairclough   addressed  the  indeterminate   zero                                                                   
fiscal note from  DOR. She pointed to the analysis  on page 2                                                                   
of the  fiscal note,  which point  out, which indicated  that                                                                   
approximately  50  percent  of  the  corporations  in  Alaska                                                                   
would qualify. Changes in revenues were indeterminate.                                                                          
                                                                                                                                
Co-Chair  Meyer  supported  the   legislation.  He  MOVED  to                                                                   
REPORT  CSSB   83(FIN)  out  of  committee   with  individual                                                                   
recommendations  and  the  accompanying  fiscal  note.  There                                                                   
being NO OBJECTION, it was so ordered.                                                                                          
                                                                                                                                
CSSB 83(FIN) was  REPORTED out of committee with  a "do pass"                                                                   
recommendation  and  with  a new  indeterminate  fiscal  note                                                                   
from the Department of Revenue.                                                                                                 
                                                                                                                                
9:31:57 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:36:17 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 57                                                                                                            
                                                                                                                                
     "An Act  relating to parental involvement  in education;                                                                   
     adjusting  pupil  transportation funding;  amending  the                                                                   
     time  required for  employers to  give tenured  teachers                                                                   
     notification  of their nonretention;  and providing  for                                                                   
     an effective date."                                                                                                        
                                                                                                                                
TIM  LAMKIN,  STAFF,  SENATOR  GARY  STEVENS,  spoke  to  the                                                                   
legislation.  He related  that  the bill  accomplished  three                                                                   
objectives.  The first  objective contained  in Section  1 of                                                                   
the  legislation encouraged  increased  parental  involvement                                                                   
in developing  children's reading  skills. Under  the state's                                                                   
direction,  the school  districts  would publish  information                                                                   
regarding   the  importance   of   parental  involvement   in                                                                   
developing  reading  skills  in  kindergarten  through  third                                                                   
grade.  The  second   section  and  objective   of  the  bill                                                                   
involved  pupil  transportation.  The  legislation  realigned                                                                   
the  funding for  pupil transportation  by annually  matching                                                                   
the Consumer  Price Index (CPI)  for Anchorage.  He explained                                                                   
that  the  school districts  contracted  with  transportation                                                                   
providers.  The contracts  contained a  3 percent  adjustment                                                                   
for  inflation according  to  the Anchorage  CPI.  Currently,                                                                   
the  state  provided  a 1.5  percent  annual  adjustment  for                                                                   
pupil transportation  funding  for the  next two years.  Most                                                                   
districts  were  forced  to  subsidize  pupil  transportation                                                                   
costs  at the  expense of  education  programs. He  indicated                                                                   
that the third  objective found in Section 3  was referred to                                                                   
as   the  "pink   slip"   section.   He  pointed   out   that                                                                   
historically March  16 was established  as an  arbitrary date                                                                   
to provide  notification  of layoff or  retention. Section  3                                                                   
moved the notification  date forward to May  15th when school                                                                   
districts funding  levels were  known. He added  that Section                                                                   
4   of   the   legislation   repealed   the   current   pupil                                                                   
transportation   funding   provisions.  Lastly,   Section   5                                                                   
allowed  existing  contracts  with teachers  and  faculty  to                                                                   
expire before the legislation took effect.                                                                                      
                                                                                                                                
Senator Hoffman inquired  why the bill used  Anchorage as the                                                                   
CPI base  and wondered whether  there were other  indexes for                                                                   
higher costs  areas. Mr.  Lamkin related  that other  indexes                                                                   
existed  but  that using  the  Anchorage  CPI was  a  "policy                                                                   
call."  Senator Hoffman  thought  that it  would  be fair  to                                                                   
consider a  higher index for  Fairbanks and other  high index                                                                   
areas of the state.                                                                                                             
                                                                                                                                
Senator  Bishop  inquired about  the  difference  in the  CPI                                                                   
between  Fairbanks  and  Anchorage.  Mr.  Lamkin  offered  to                                                                   
provide the information.                                                                                                        
                                                                                                                                
Co-Chair  Meyer  cited Section  3  and inquired  whether  the                                                                   
provision  only  applied  to  tenured  teachers.  Mr.  Lamkin                                                                   
confirmed that  Section 3 only  applied to tenured  teachers.                                                                   
He  added that  subsection  (b) of  the  statute referred  to                                                                   
non-tenured teachers  which required notification  by the end                                                                   
of the school year.                                                                                                             
                                                                                                                                
Co-Chair  Meyer wondered  why  the bill  was structured  with                                                                   
two  separate notification  dates.  Mr.  Lamkin replied  that                                                                   
notification  was a  policy  decision which  was  established                                                                   
many years ago.                                                                                                                 
                                                                                                                                
Vice-Chair Fairclough  speculated that  due to the  nature of                                                                   
tenure,   a  tenured   position  deserved   as  much   layoff                                                                   
notification as possible[BSW3].                                                                                                 
                                                                                                                                
Senator Olson  remarked that the  March 15th date  offered as                                                                   
much notification  as possible, which  was more helpful  to a                                                                   
person  facing a  layoff. Vice-Chair  Fairclough  ascertained                                                                   
that the pink  slips were issued before the  budget cycle for                                                                   
the  state was  completed and  the  school districts  funding                                                                   
levels were known.                                                                                                              
                                                                                                                                
Mr.  Lamkin concurred.  He added  that unnecessarily  issuing                                                                   
pink  slips  caused  teacher stress  that  could  affect  the                                                                   
classroom. He  voiced that  it was a  matter of fairness  and                                                                   
transparency.                                                                                                                   
                                                                                                                                
Senator  Dunleavy commented  that things  were done  backward                                                                   
from the school  districts' point of view. He  noted that the                                                                   
districts  were legally  compelled  to enter  into  contracts                                                                   
before  budgets were  known. He  believed  the change  placed                                                                   
the notifications in line with the budget process.                                                                              
                                                                                                                                
9:44:50 AM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  relayed  that   he  had  heard  comments  on                                                                   
Section 2  of the bill on  both sides of the  issue. Indexing                                                                   
was  not  a   typical  budget  practice  and   might  set  an                                                                   
unwelcome precedent.  The alternative  of dealing  with pupil                                                                   
transportation  increases each  year was  also not ideal.  He                                                                   
preferred supporting the legislation.                                                                                           
                                                                                                                                
Mr.  Lamkin  communicated   that  the  issue   was  a  policy                                                                   
question.  He  pointed  out  that   the  cost  was  real.  He                                                                   
deferred to  school district  financial officers  for further                                                                   
discussion.                                                                                                                     
                                                                                                                                
Senator Hoffman  believed that  in this particular  case, the                                                                   
additional  expenses would "diminish"  classroom funding  and                                                                   
was the core of the argument.                                                                                                   
                                                                                                                                
Vice-Chair Fairclough OPENED public testimony.                                                                                  
                                                                                                                                
AMY LUJAN, EXECUTIVE  DIRECTOR, ALASKA ASSOCIATION  OF SCHOOL                                                                   
BUSINESS  OFFICIALS, spoke  in favor  of SB  57. She  offered                                                                   
that  the  Anchorage  CPI was  the  standard  for  contracts,                                                                   
recommended  by   the  Department  of  Education   and  Early                                                                   
Development  (DEED)  statewide.  Contracts in  Fairbanks  and                                                                   
even Nome  use the  Anchorage  CPI. The costs  were real  and                                                                   
increasing.  Authorizing the  Anchorage  CPI budget  increase                                                                   
keeps  pace with  the actual  cost. She  discussed Section  3                                                                   
and  agreed  with  the  comments  of  Senator  Dunleavy.  She                                                                   
mentioned the  unnecessary stress  caused by issuance  of the                                                                   
premature  notification and  keeping the  pink slips  in line                                                                   
with the state and municipal budget processes.                                                                                  
                                                                                                                                
Senator Olson  inquired whether it  would be fairer to  use a                                                                   
higher  CPI.  Ms.  Lujan  reminded  the  committee  that  the                                                                   
contracts  were  based  on  the Anchorage  CPI  and  was  the                                                                   
standard.                                                                                                                       
                                                                                                                                
Senator Olson  suggested moving  the notification date  up to                                                                   
May 1, which  corresponds to the boroughs budgets.  Ms. Lujan                                                                   
observed that  the dates  vary according  to the borough  and                                                                   
opined that May 15 might be a safer date.                                                                                       
                                                                                                                                
DEENA   PARAMO,   SUPERINTENDENT,   MAT-SU   BOROUGH   SCHOOL                                                                   
DISTRICT, MAT-SU  (via teleconference),  spoke in  support of                                                                   
SB  57. She  referenced  increased parental  involvement  and                                                                   
related that  tools and resources  made available  to parents                                                                   
enriched education.  She restated that all  school district's                                                                   
contracts were  based on the  Anchorage CPI. She  shared that                                                                   
when  school districts  budgets  were developed  "global  big                                                                   
picture  thinking"  was balanced  with  financial  realities.                                                                   
She believed that  the current factor of 1.5  percent was not                                                                   
sufficient to  fully support pupil transportation  costs. She                                                                   
based  that  assessment  on  the  's    Anchorage  CPI's  2.6                                                                   
percent  five--year average.  The  funding shortfall  reduced                                                                   
instruction  funding. She stated  that the  Matanuska-Susitna                                                                   
borough   school   district  was   preparing   to   subsidize                                                                   
transportation  funding   with  its  general  fund   at  $1.5                                                                   
million  in FY  2014 with  impacts  to classroom  instruction                                                                   
funding.  The  amount  was  the   equivalent  to  15  teacher                                                                   
positions. The  bill reduced  the shortfall by  approximately                                                                   
$500 thousand.                                                                                                                  
                                                                                                                                
Ms.  Paramo   turned  to   non-retention  notification.   She                                                                   
related  that  under  the  year  to  year  funding  structure                                                                   
enacted (HB  273) by the state  in 2008, funding  levels were                                                                   
not  known  before statutorily  mandated  timelines  required                                                                   
contract   renewal   and  non-retention   notification.   She                                                                   
relayed  the  Matanuska-Susitna   Borough  School  District's                                                                   
support of  the notification date  change and  furthered that                                                                   
the  contract   dates   should  be  changed   as  well.   The                                                                   
Matanuska-Susitna  Borough School  District thought  that the                                                                   
timeline was a  "prudent and responsible fiscal  policy." She                                                                   
thanked  the   committee  and   urged  for  support   of  the                                                                   
legislation.                                                                                                                    
                                                                                                                                
9:56:08 AM                                                                                                                    
                                                                                                                                
Senator  Hoffman   inquired  how  Mat-Su  derived   the  $1.5                                                                   
million  figure which contrasted  with  the DEED fiscal  note                                                                   
FN2 (EED).                                                                                                                      
                                                                                                                                
LUKE  FULP, CHIEF  BUSINESS  OFFICER, MAT-SU  BOROUGH  SCHOOL                                                                   
DISTRICT, MAT-SU  (via teleconference),  replied that  he was                                                                   
not  certain how  the fiscal  note was  developed. He  stated                                                                   
that the borough  developed the budget using the   CPI five--                                                                   
year average  of 2.6 percent in  relation to the  1.5 percent                                                                   
increase instituted in SB 182 last year.                                                                                        
                                                                                                                                
DAVE   JONES,  ASSISTANT   SUPERINTENDENT,  Kenai   Peninsula                                                                   
BOROUGH   SCHOOL   DISTRICT,  KENAI   (via   teleconference),                                                                   
testified in support  of SB 57. He concurred with  all of the                                                                   
previous testimony.  He added that DEED's  standardization of                                                                   
school  district  contracts  to  the  Anchorage  CPI  was  an                                                                   
attempt to  rein in costs  and attract more contractors.  The                                                                   
increase  to the  Anchorage  CPI in  SB  57 helped  stabilize                                                                   
transportation  funding;  not  at the  expense  of  education                                                                   
funding.  He discussed  the  notification  issue. He  related                                                                   
that  the current  system  left  teachers to  wonder  whether                                                                   
they had  a job and the  district in the situation  that they                                                                   
will find  another  job and not  be available  if their  jobs                                                                   
were retained.                                                                                                                  
                                                                                                                                
Senator  Dunleavy  commented  that  the  May  15th  date  was                                                                   
minimal  in light  of the  possibility  that the  legislature                                                                   
could end in special session on any given year.                                                                                 
                                                                                                                                
BRUCE JOHNSON,  EXECUTIVE DIRECTOR, ALASKA COUNCIL  OF SCHOOL                                                                   
ADMINISTRATORS,  supported the  legislation.  He shared  that                                                                   
school  districts   took  lying   off  teachers   and  school                                                                   
district employees  seriously. He  agreed with Mr.  Jones and                                                                   
did not  want to lose  teachers who  sought and gained  other                                                                   
employment  due to  premature  notification. Rural  districts                                                                   
commonly issued  contracts to  staff in February,  especially                                                                   
in  schools   with  high   turnover  in   order  to   develop                                                                   
recruitment  strategies  for  the  next  year.  Most  of  the                                                                   
teachers  were issued  contracts  well  before  the May  15th                                                                   
deadline. He  appreciated the  flexibility of the  later date                                                                   
and  believed  it was  more  advantageous  to have  a  stable                                                                   
employment force.                                                                                                               
                                                                                                                                
Vice-Chair Fairclough CLOSED public testimony.                                                                                  
                                                                                                                                
SB  57   was  HEARD  and   HELD  in  committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
10:05:35 AM                                                                                                                   
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:05 a.m.                                                                                         

Document Name Date/Time Subjects
SB022CS(JUD)-LAW-CRIM-03-06-13.pdf SFIN 3/28/2013 9:00:00 AM
SB 22
SB 83 26 USC 460.pdf SFIN 3/28/2013 9:00:00 AM
SB 83
SB 83 Interest on Under-Overpayments on Fed Taxes.pdf SFIN 3/28/2013 9:00:00 AM
SB 83
SB 83 Sponsor Statement scanned.pdf SFIN 3/28/2013 9:00:00 AM
SB 83
SB 57 SampleParentInvolvement_Pamphlet_Idaho.pdf HEDC 4/8/2013 8:00:00 AM
SFIN 3/28/2013 9:00:00 AM
SB 57
SB 57 Third Grade Reading Policies.pdf HEDC 4/8/2013 8:00:00 AM
SFIN 3/28/2013 9:00:00 AM
SB 57
SB 57 ECS_Third Grade Literacy Policies.pdf HEDC 4/8/2013 8:00:00 AM
SFIN 3/28/2013 9:00:00 AM
SB 57
SB 57 SupportLetters.pdf HEDC 4/8/2013 8:00:00 AM
SFIN 3/28/2013 9:00:00 AM
SB 57
SB 57 SponsorStatement_VersionC.pdf SFIN 3/28/2013 9:00:00 AM
SB 57
SB 57 Sectional_VersionC.pdf SFIN 3/28/2013 9:00:00 AM
SB 57
SB49_Backup_ 2001 Planned Parenthood Case from Alaska Supreme Court.pdf SFIN 3/28/2013 9:00:00 AM
SB 49
SB49_Backup_ Administrative Law Judge Decision from Sept. 24, 2012.pdf SFIN 3/28/2013 9:00:00 AM
SB 49
SB49_Backup_ Citation from Dr. Priscilla Coleman.pdf SFIN 3/28/2013 9:00:00 AM
SB 49
SB49_Backup_ Executive Order 13535 from President Obama.pdf SFIN 3/28/2013 9:00:00 AM
SB 49
SB49_Backup_Bibliography of Peer Review Studies on Abortion and Mental Health from Dr. Priscilla Coleman.pdf SFIN 3/28/2013 9:00:00 AM
SB 49
SB49_Backup_Definition of Abortion.pdf SFIN 3/28/2013 9:00:00 AM
SB 49
SB49_Backup_Evidence for Casual Association between Abortion and Mental Health.pdf SFIN 3/28/2013 9:00:00 AM
SB 49
SB49_Backup_Guttmacher_State Funding for Abortions under Medicaid.pdf SFIN 3/28/2013 9:00:00 AM
SB 49
SB49_Backup_Hyde Amendment.pdf SFIN 3/28/2013 9:00:00 AM
SB 49
SB49_Backup_NCSL Statistics for State Funding of Abortions Under Medicaid.pdf SFIN 3/28/2013 9:00:00 AM
SB 49
SB49_Backup_Quantitative Reasons Women have Abortions.pdf SFIN 3/28/2013 9:00:00 AM
SB 49
SB49_Backup_Statistics from Alaska Borough of Vital Statistics on Abortion.pdf SFIN 3/28/2013 9:00:00 AM
SB 49
SB49_Backup_Written Testimony of Dr. Priscilla Coleman.pdf SFIN 3/28/2013 9:00:00 AM
SB 49
SB49_Sectional_Analysis.pdf SFIN 3/28/2013 9:00:00 AM
SB 49
SB49_Sponsor_Statement.pdf SFIN 3/28/2013 9:00:00 AM
SB 49
SB49_Summary_of_Changes.pdf SFIN 3/28/2013 9:00:00 AM
SB 49
SB49_Supporting_Documents.pdf SFIN 3/28/2013 9:00:00 AM
SB 49
SB 83 Support Letter - Davis.pdf SFIN 3/28/2013 9:00:00 AM
SB 83
SB 83 Support Letter - FMStrand.pdf SFIN 3/28/2013 9:00:00 AM
SB 83
SB 83 Support Letter - KC Corp.pdf SFIN 3/28/2013 9:00:00 AM
SB 83
SB 83 Support Letter - Udelhoven.pdf SFIN 3/28/2013 9:00:00 AM
SB 83
SB 83 Support Letter - FNBA.pdf SFIN 3/28/2013 9:00:00 AM
SB 83
SB 83 work draft Version U.pdf SFIN 3/28/2013 9:00:00 AM
SB 83
SB 22 work draft version P.pdf SFIN 3/28/2013 9:00:00 AM
SB 22