2019-02-20                     House Journal                      Page 0187
HB 66                                                                                                                         
HOUSE BILL NO. 66 by the House Rules Committee by request of                                                                    
the Governor, entitled:                                                                                                         
                                                                                                                                
     "An Act repealing state aid for costs of school construction debt;                                                         
     and providing for an effective date."                                                                                      
                                                                                                                                

2019-02-20                     House Journal                      Page 0188
was read the first time and referred to the Community & Regional                                                                
Affairs, Education, and Finance Committees.                                                                                     
                                                                                                                                
The following fiscal note(s) apply:                                                                                             
                                                                                                                                
1.  Zero, Dept. of Education & Early Development/Debt Service                                                                   
                                                                                                                                
The Governor's transmittal letter dated February 15 follows:                                                                    
                                                                                                                                
"Dear Speaker Edgmon:                                                                                                           
                                                                                                                                
Under the authority of Article III, Section 18, of the Alaska                                                                   
Constitution, I am transmitting a bill relating to the repeal of the                                                            
statute authorizing payments to municipalities for reimbursement of                                                             
school construction bonded debt.                                                                                                
                                                                                                                                
The bill would repeal AS 14.11.100, which provides authority for                                                                
school construction debt to be reimbursed by the state in an allowable                                                          
percentage of the municipal debt payment. The percentage has varied                                                             
based on numerous amendments to the statute over the years. The                                                                 
program, while well-intentioned, has become unsustainable and                                                                   
unnecessary. The level of school debt should remain at the municipal                                                            
level, where voters can decide what type of school construction is                                                              
reasonable and sustainable for their district. Recently, this program                                                           
was put on hold through July 1, 2020; and it is apparent that a new                                                             
direction beyond a holding pattern is needed.                                                                                   
                                                                                                                                
The bill also addresses how funding for school construction and                                                                 
maintenance in the Regional Educational Attendance Areas through                                                                
the small municipal school district fund is handled with the repeal of                                                          
the state aid for school construction statutes. Further, the bill makes                                                         
conforming amendments to the statutes governing the bond                                                                        
reimbursement and grant review committee and other statutes that                                                                
refer to the current program for reimbursement of school construction                                                           
debt.                                                                                                                           
                                                                                                                                
Importantly, the bill would add a provision to the duties of The Bond                                                           
Reimbursement and Grant Review Committee (which would be                                                                        
renamed the Grant Review Committee) requiring that, in developing                                                               
criteria for cost-effective school construction, the committee would                                                            

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consider multipurpose function and designs. Through creative thinking                                                           
and multi-use designs, we can bring down school construction costs                                                              
and better serve the affected communities.                                                                                      
                                                                                                                                
The bill would be effective July 1, 2019.                                                                                       
                                                                                                                                
I urge your prompt and favorable action on this measure.                                                                        
                                                                                                                                
Sincerely,                                                                                                                      
/s/                                                                                                                             
Michael J. Dunleavy                                                                                                             
Governor"