03/04/1998 10:15 AM Senate FIN

                                                                               
SENATE BILL NO. 36                                                             
"An Act relating to transportation of public school                            
students; relating to school construction grants;                              
relating to the public school foundation program and to                        
local aid for education; and providing for an effective                        
date."                                                                         
                                                                               
                                                                               
Co-Chair Sharp announced the purpose of this meeting was to                    
get updates from the involved parties working on a Committee                   
Substitute based on action taken by the Senate Finance                         
Committee during its March 3 afternoon meeting.                                
                                                                               
Richard Cross from the Department of Education was the first                   
to be invited to address the committee.  He indicated he                       
felt his department would have the information requested                       
delivered to the co-chair's office by noon today.  The data                    
would include new figures based on amendments the committee                    
adopted with regard to transportation.  Other data the                         
department is compiling pertains to full implementation of                     
the bilingual measure.  He detailed the information they                       
need to provide Legal Services for inclusion in the                            
committee substitute and their anticipated timeframe.                          
                                                                               
He spoke to the importance of the numbers matching the                         
absolute dollar amount.  The department must be held                           
accountable for the accuracy of these figures.  Therefore,                     
they are taking extra steps to avoid errors.                                   
                                                                               
Co-Chair Sharp asked if the actual dollar amount would need                    
to be changed in statutes every year to match the current                      
situation.  Mr. Cross said that yes, some sort of                              
legislative action would need to be made before any changes                    
to funding amounts could be allocated.                                         
                                                                               
Senator Adams had questions on the charts the department is                    
working on for the committee.  He wanted to know if the                        
chart showing the income generated for the REAAs would also                    
show that each one received their entitled amount of funding                   
under the provisions in this bill. Mr. Cross informed him                      
that the PL874 implication and allowable deduction would be                    
shown.                                                                         
                                                                               
Senator Adams then spoke to the confusion on the Single                        
Sites.  Would the charts addressing those show how they                        
would fare under the formulas of this proposal versus how                      
they are faring under the current system?  Mr. Cross replied                   
that the outcome of the single site districts is still being                   
looked at.  The final transitional language will be a factor                   
in these computations.                                                         
                                                                               
Co-Chair Sharp asked the department to draft figures for                       
Senator Adams' amendment.  Mr. Cross said they looked at the                   
only two districts they thought would be affected, and in                      
the end, found only one would be affected.  The department                     
could show how that one district is affected but warned that                   
by integrating these factors, the formula outcomes statewide                   
would be changed.                                                              
                                                                               
Senator Phillips requested that department staff be                            
available at this afternoon's Senate Finance Committee to                      
answer questions on this matter.  Mr. Cross told the                           
committee they would be present.  He added that pages two,                     
three and four of the spreadsheet walks through the math                       
used in the formula.  Co-Chair Sharp verbalized the process                    
of getting the updated figures from the Department of                          
Education to the Division of Legal Services for inclusion in                   
the committee substitute workdraft.                                            
                                                                               
At this point, Co-Chair Sharp invited the Department of                        
Revenue to the table to update the committee on their role                     
in this bill drafting process.  Deborah Vogt informed them                     
that her department has been working to put together a draft                   
implementing the changes dictated yesterday by the                             
committee.                                                                     
                                                                               
Senator Adams asked when the department would have a                           
mechanism in place to collect the income tax.                                  
                                                                               
She told the committee there are two components to this tax.                   
One is the straight income tax issue, which is fairly simple                   
for the department to implement.  Holding a percentage of                      
the wages from workers living in applicable areas is a                         
straightforward process.                                                       
                                                                               
The second component involves the tax credit for workers                       
from incorporated areas who provide services in                                
unincorporated areas.  This adds complications and the                         
department had not had a chance to analyze this portion yet.                   
They have plans to meet with representatives from the                          
Department of Labor this morning to go over some potential                     
collection procedures.                                                         
                                                                               
Senator Adams wanted to know if there would be a rough                         
estimate of a fiscal note by this afternoon's meeting.  Ms.                    
Vogt replied that they are working on it and would include a                   
revenue adjustment.  Senator Adams wanted confirmation that                    
the state would only be collecting approximately $800,000 to                   
which Ms. Vogt affirmed.                                                       
                                                                               
Senator Torgerson asked if the department had given any                        
predictions for non-resident self-employed workers.  Ms.                       
Vogt said there is a way to determine figures for that                         
population but she did not have them yet.                                      
                                                                               
Co-Chair Sharp concluded the update and announced that the                     
committee will resume deliberations on this bill after the                     
conclusion of the work session scheduled for 4:30 this                         
afternoon.