04/21/2005 01:30 PM House FINANCE

HOUSE BILL NO. 13                                                                                                             
                                                                                                                                
     "An Act relating to reimbursement of municipal bonds                                                                       
     for school construction; and providing for an effective                                                                    
     date."                                                                                                                     
                                                                                                                                
CODY RICE, STAFF,  REPRESENTATIVE CARL GATTO,  explained that                                                                   
the  purpose of  HB 13  is to  reauthorize  school bond  debt                                                                   
reimbursement.   In  the Health  and  Social Services  (HESS)                                                                   
Committee it was  amended to be contingent upon  a minimum of                                                                   
a  $100  million direct  appropriation  to  qualifying  areas                                                                   
primarily in  rural Alaska.  This  program is an  exact model                                                                   
of the  previous program,  with the  exception of the  direct                                                                   
appropriation.  It allows  for  legislative authorization  to                                                                   
reimburse   local  districts   for  up   to  70  percent   of                                                                   
construction  costs for  qualifying schools,  and 60  percent                                                                   
for schools that don't meet the standards.                                                                                      
                                                                                                                                
Representative Joule asked how  long it would go and if there                                                                   
is a  cap.   Mr. Rice  replied that  there is  no cap and  it                                                                   
would be  in effect  until July 1,  2006.  It  is up  to each                                                                   
locality  to  determine the  amount  of  the bonding  at  the                                                                   
ballot.                                                                                                                         
                                                                                                                                
Vice-Chair  Stoltze speculated  that if  no local bonds  were                                                                   
passed, a $100  million direct grant would remain.   Mr. Rice                                                                   
said that  is correct,  however, bond  debt reimbursement  is                                                                   
contingent  upon legislative  approval.   Vice-Chair  Stoltze                                                                   
asked about a HESS amendment regarding  student population of                                                                   
1,000.  Mr.  Rice said he does  not know.  He  explained that                                                                   
the  intent of  that amendment  was stated  to replicate  the                                                                   
conditions of  the previous  bond package.    He  pointed out                                                                   
that another difference  in the HESS amendment  is the length                                                                   
of the window.                                                                                                                  
                                                                                                                                
2:57:14 PM                                                                                                                    
                                                                                                                                
Mr.  Rice noted  that Representative  Gatto  did not  support                                                                   
direct appropriations.                                                                                                          
                                                                                                                                
2:58:12 PM                                                                                                                    
                                                                                                                                
CARL  ROSE,  ALASKA  ASSOCIATION  OF  ALASKA  SCHOOL  BOARDS,                                                                   
stated support  for the  bill.  He  addressed a concern  that                                                                   
the reimbursement  program be extended.   He referred  to the                                                                   
needs  of the  Alaska  School Board,  which  resulted in  two                                                                   
resolutions,  one to extend  the bonded indebtedness  program                                                                   
and  the  other  to  insure  that   the  capital  improvement                                                                   
priority list  is followed.  He  opined that $100  million is                                                                   
about $42 million shy of the current  major maintenance list.                                                                   
He related that  there is no way of knowing  about the amount                                                                   
of money that  will be passed  in local bonds.  He  termed it                                                                   
an equity  question and said  not all  needs are going  to be                                                                   
met.                                                                                                                            
                                                                                                                                
3:00:42 PM                                                                                                                    
                                                                                                                                
GEORGE  VAKALIS, ASSISTANT  SUPERINTENDENT, ANCHORAGE  SCHOOL                                                                   
DISTRICT,  (via teleconference)  spoke of  the many  needs of                                                                   
Alaskan school districts.   One of the biggest  incentives to                                                                   
meet some of  these needs is the debt  reimbursement program.                                                                   
He spoke in support of HB 13.                                                                                                   
                                                                                                                                
Co-Chair Chenault  asked what the  amount of the  total needs                                                                   
is.  Mr. Vakalis responded that Mr. Jeans has the list.                                                                         
                                                                                                                                
3:03:11 PM                                                                                                                    
                                                                                                                                
EDDY JEANS, DIRECTOR, EDUCATION  SUPPORT SERVICES, DEPARTMENT                                                                   
OF EDUCATION  AND EARLY DEVELOPMENT,  reported that  there is                                                                   
about $73  million on Anchorage's  needs list, but  that does                                                                   
not address all  their needs.  Co-Chair Chenault  asked for a                                                                   
dollar  amount regarding  MatSu  Valley's needs.   Mr.  Jeans                                                                   
replied  $8.9  million for  Settlers  Bay, $172,000  for  the                                                                   
Colony track, and $2.4 million  for Wasilla High renovations,                                                                   
and one more, which he did not have the numbers for.                                                                            
                                                                                                                                
3:05:00 PM                                                                                                                    
                                                                                                                                
Representative Kelly asked for  Fairbanks numbers.  Mr. Jeans                                                                   
replied that those were not submitted to the department.                                                                        
                                                                                                                                
Co-Chair  Meyer  asked how  many  schools qualify  under  the                                                                   
70/30 program.   Mr. Jeans replied that most  of the projects                                                                   
on the new construction list are in rural Alaska.                                                                               
                                                                                                                                
Representative  Kelly spoke  of  a concern  about his  area's                                                                   
numbers.   Mr. Jeans explained  how the numbers  are obtained                                                                   
for the department's list.                                                                                                      
                                                                                                                                
3:06:56 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault  asked if new  schools in the  MatSu Valley                                                                   
could  fall  under   this  program.    Mr.   Jeans  said  any                                                                   
municipality  could  submit a  request  for  review, but  the                                                                   
question is whether  they would qualify for  70 percent based                                                                   
on need, or 60 percent based on want.                                                                                           
                                                                                                                                
3:07:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MARK NEWMAN, spoke  about the MatSu  Valley's                                                                   
needs and increasing  enrollment.  The school  board has just                                                                   
proposed  $6 million  in bonds  for an  elementary school,  a                                                                   
high school, and for the expansion of Wasilla High School.                                                                      
                                                                                                                                
3:11:16 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault suggested that  it is a worthwhile bill but                                                                   
a few  more issues need  to be looked  at first before  it is                                                                   
passed from committee.                                                                                                          
                                                                                                                                
HB 13 was HELD in Committee for further consideration.                                                                          
                                                                                                                                
3:12:41 PM