01/29/2010 08:00 AM House EDUCATION

         HB 310-SCHOOL CONSTRUCTION DEBT REIMBURSEMENT                                                                      
                                                                                                                                
8:03:22 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON announced that the  first order of business would be                                                               
HOUSE  BILL  NO.   310,  "An  Act  extending   the  deadline  for                                                               
authorizing school construction debt reimbursed by the state."                                                                  
                                                                                                                                
8:04:44 AM                                                                                                                    
                                                                                                                                
KATIE KOESTER, Staff to Representative  Paul Seaton, Alaska State                                                               
Legislature, explained  that HB 310 provides  the third extension                                                               
period  for the  existing program,  carrying it  through November                                                               
30,  2013.   She  pointed to  the flow  chart,  in the  committee                                                               
packet,  as  an  illustration  of  the  debt  bond  reimbursement                                                               
program.   She indicated the school  house figure on the  left of                                                               
the chart  and noted  the two versions  for bond  funding: either                                                               
the state  reimburses 60 percent or  70 percent of the  bond with                                                               
the  municipality responsible  for  the balance.   She  explained                                                               
that  the program  funding qualifications  for reimbursement  are                                                               
primarily determined  by the  space and  construction regulations                                                               
in  4AAC.31.020.    She  pointed   out  that  the  Department  of                                                               
Education and  Early Development (EED)  make this decision.   She                                                               
described the  ballot stage  of a  bond project,  explaining that                                                               
voter approval  allows a  municipality to  offer bonds,  and then                                                               
moves forward with the building project.                                                                                        
                                                                                                                                
8:09:11 AM                                                                                                                    
                                                                                                                                
CHAIR   SEATON  clarified   that  the   funding  commitment   for                                                               
reimbursement is for the life of the project.                                                                                   
                                                                                                                                
MS. KOESTER  concurred, and detailed  that most bonds are  for 20                                                               
years.   She  pointed  out that  some of  these  bonds are  still                                                               
active and that  the payments are accounted for  in the operating                                                               
section of the state budget;  approximately $106 million for this                                                               
year.                                                                                                                           
                                                                                                                                
8:10:12 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MUNOZ asked  for  an explanation  of the  Capital                                                               
Improvements  Projects  table,  noting  that  the  initial  Voter                                                               
Amounts shows $0.                                                                                                               
                                                                                                                                
8:10:50 AM                                                                                                                    
                                                                                                                                
SAM  KITO, School  Facilities Engineer,  Department of  Education                                                               
and Early Development (EED), explained  to the committee that the                                                               
Capital Improvements  Projects table is  the debt report,  and is                                                               
updated when there are changes to  the debt program.  He directed                                                               
attention to  the Voter  Amount column, and  disclosed that  a $0                                                               
amount  indicates bonds  that were  not approved  by voters.   He                                                               
said that  the table indicates approval  by the EED.   In further                                                               
response  to Representative  Munoz,  he replied  that both  voter                                                               
approval and  EED approval  of a  bond is  required prior  to the                                                               
release of funds.                                                                                                               
                                                                                                                                
8:12:18 AM                                                                                                                    
                                                                                                                                
CHAIR   SEATON   inquired   whether  legislative   approval   for                                                               
appropriation of bond debt reimbursement is also required.                                                                      
                                                                                                                                
MR. KITO specified that legislative  approval is "a follow-on" as                                                               
a project  agreement is written  immediately after  completion of                                                               
voter and  EED approval.   He clarified that a  project agreement                                                               
contains  a school  district agreement  that the  state will  pay                                                               
"subject to the  appropriation of the legislature,"  and that EED                                                               
payment is prorated to the amount appropriated.                                                                                 
                                                                                                                                
8:13:25 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  BUCH  asked  for clarification  of  the  Comments                                                               
column on the table.                                                                                                            
                                                                                                                                
MR. KITO  replied that  the projects are  approved in  groups, so                                                               
the  written comments  are a  shorthand notation  referencing all                                                               
the  projects  with the  same  date  in the  Department  Approval                                                               
column.                                                                                                                         
                                                                                                                                
8:14:42 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  EDGMON   asked  if   the  $106   million  program                                                               
operating budget is a record high.                                                                                              
                                                                                                                                
MR.  KITO  said  yes,  and  observed  that  it  had  been  slowly                                                               
increasing.                                                                                                                     
                                                                                                                                
8:15:56 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MUNOZ  asked  if the  operating  budget  includes                                                               
projects approved by EED, though not yet approved by voters.                                                                    
                                                                                                                                
MR.  KITO stipulated  that  occasionally  debt service  requests,                                                               
which were  placed in the  operating budget  considerations, were                                                               
not submitted  by the October 15th  deadline.  He shared  that if                                                               
EED was aware  of a project expenditure that it  would include an                                                               
estimate in the budget request.                                                                                                 
                                                                                                                                
8:17:21 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   EDGMON  agreed   that  the   program  has   been                                                               
successful and  he shared his support.   Noting that a  number of                                                               
municipalities have denied  bond programs, he asked  if there was                                                               
an election pattern for multiple requests before approval.                                                                      
                                                                                                                                
MR.  KITO  shared  that  some of  the  smaller  communities  have                                                               
recently experienced  difficulty with bond approval,  but he knew                                                               
of no predictable trend.                                                                                                        
                                                                                                                                
8:19:10 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON directed  attention to  the handout  detailing Sec.                                                               
14.07.020, and described the  guidelines for planning educational                                                               
facilities.  He continued, referring  to Sec. 14.11, and observed                                                               
that  the  bond  program generally  dovetails  with  construction                                                               
grants.   He  referred to  the two  Capital Improvement  Projects                                                               
handouts for the Initial Agency  Decision and the Reconsideration                                                               
List,   and   asked   the   committee   to   review   these   for                                                               
recommendations during the next committee hearing.                                                                              
                                                                                                                                
8:21:44 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON opened public testimony.                                                                                           
                                                                                                                                
8:22:01 AM                                                                                                                    
                                                                                                                                
MARY  FRANCIS,  Executive  Director,  Alaska  Council  of  School                                                               
Administrators  (ACSA),  said that  ACSA  was  supportive of  the                                                               
continuation  of   this  program.    She   submitted  a  position                                                               
statement of support, for inclusion in the committee packet.                                                                    
                                                                                                                                
8:23:25 AM                                                                                                                    
                                                                                                                                
DAVE  JONES, Assistant  Superintendent,  Kenai Peninsula  Borough                                                               
School  District,  testified in  support  of  HB 310,  and  urged                                                               
passage of the bond program extension.                                                                                          
                                                                                                                                
CHAIR  SEATON  said that  the  bill  would  be held,  and  public                                                               
testimony would remain open.  [HB 310 was held over.]