03/06/1998 09:50 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-chairman Sharp called the committee to order and noted                      
that they were still waiting for additional paperwork from                     
Legal and therefore would stand in recess until                                
approximately 10:30 a.m.                                                       
                                                                               
(recessed - reconvened)                                                        
                                                                               
Co-chairman Sharp reconvened the committee at approximately                    
11:05 a.m.  He noted amendment #26 by Senator Parnell.                         
                                                                               
Amendment #26 was MOVED by Senator Parnell.  Senator Adams                     
OBJECTED.  Senator Parnell explained the amendment would                       
delete provisions from the bill that would levy a tax on the                   
unorganized areas of the State and the amendment also pulled                   
out the third-class borough option.  He said the ultimate                      
goal was to change the education funding and to provide a                      
more fair and simple formula.  SB 36, as it exists before                      
the committee presently, meets that goal.  He did not that                     
while he was willing to move the bill from committee in its                    
current form, he felt the bill would fail to pass on the                       
Senate Floor.  Leaving the bill in its current form would                      
mean that Alaska's children would continue losing ground                       
under existing inadequate and inequitable funding system.                      
They should not let the issue die here.  The foundation                        
formula must be fixed.  Alaska's children deserve better, he                   
said.                                                                          
                                                                               
Senator Adams responded.  He said he was happy to see the                      
committee finally moving in the right direction with the                       
removal of the third-class boroughs, removal of the income                     
tax, however, SB 36 was still unfair.  With reference to a                     
comment by Senator Parnell, that 82% of Alaska's children                      
were entitled to State funding, what about the remaining                       
children?  Each child in the State of Alaska is entitled to                    
education funding.  Without further comment, Senator Adams                     
WITHDREW his OBJECTION.                                                        
                                                                               
Senator Torgerson OBJECTED.  He said, for the same reasons                     
Senator Adams spoke about equity, was the same reason he was                   
objecting.  He realized they were considering going back to                    
a mandatory borough issue, but the transition to that is                       
perhaps fifteen to twenty years away.  It was too difficult                    
to realize that some of the residents of the State of Alaska                   
do not have to pay for education.  The bill provides a                         
transition of three years to come forward with the mechanism                   
to tax themselves, and if not, the tax would be placed by                      
this assembly.  He felt that was a fair approach and noted                     
he MAINTAINED his OBJECTION for the record.                                    
                                                                               
Senator Donley queried about page one, lines sixteen and                       
seventeen and asked why that was necessary to have in the                      
amendment.  Senator Parnell responded that it was a question                   
for the drafter.  He only requested the tax portions be                        
pulled out as well as the unorganized borough portion,                         
thinking that subsequent legislation would require local                       
contribution.  Senator Donley indicated he wanted an answer                    
regarding this matter before he voted.  He felt individuals                    
should be encouraged to make local contributions for                           
education.  Senator Parnell concurred and said he would be                     
happy to take the matter up with the drafter as long as it                     
did not damage what was trying to be accomplished.                             
                                                                               
Co-chair Sharp asked if the drafter was present and                            
committee members agreed that he could be summonsed.  There                    
being nothing further to discuss before the committee Co-                      
chair Sharp said they would stand at ease.                                     
                                                                               
(11:12 a.m. - at ease)                                                         
                                                                               
Co-chair Sharp called the committee back to order.  He noted                   
a temporary solution had been worked out.                                      
                                                                               
Senator Parnell indicated that lines sixteen and seventeen                     
were current law.  He MOVED to amend amendment #26.                            
Beginning on line fifteen, page one to delete "and insert:"                    
and further delete lines sixteen and seventeen. WITHOUT                        
OBJECTION the amendment to amendment #26 was ADOPTED.                          
                                                                               
Senator Phillips asked if the bill were to pass was it                         
contingent on something else happening?  Senator Donley                        
explained that the amendment would delete section 40 of the                    
present bill.  Senator Phillips reads section 40, page 3,                      
lines 16 through 19 into the record.  He said therefore,                       
this section was contingent on another piece of legislation.                   
He noted what would happen if that particular piece of                         
legislation failed.  Senator Donley concurred.                                 
                                                                               
Senator Donley said that since this committee was the first                    
body working on the bill the effective date could be amended                   
any time throughout the process.                                               
                                                                               
At this time, Senator Phillips withdrew his concern.                           
                                                                               
By a roll call vote of 6 - 1 (Sharp, Pearce, Donley, Adams,                    
Parnell, Phillips - yea) (Torgerson - nay) amended amendment                   
                                                                               
Senator Adams asked that since the amendment passed when                       
would the new CS and departmental runs be available?  Co-                      
chairman Sharp indicated the new CS could be available as                      
early as this afternoon.  They will be distributed to the                      
members as soon as possible and copies will be made                            
available at the back of the committee room.  LIOs will get                    
theirs as soon as they are entered electronically.  He                         
advised the committee further that they would meet after                       
10:00 a.m. Monday morning with the new CS including the last                   
amendment.  He requested all committee members be present at                   
that time.   He advised Department of Education to look                        
carefully at the new CS to see what changes, if any, were                      
required other than perhaps eliminating some of the runs                       
done based on taxation.  He also requested Departments of                      
Revenue and Labor to reevaluate their fiscal notes                             
predicated on the last CS.  They were no longer in the                         
picture with the latest adjustment.  He wanted the bill                        
moved out of committee before the Floor session on Monday.                     
                                                                               
Senator Adams also requested Department of Law be present                      
Monday.  Questions concerning constitutionality of certain                     
provisions in the bill could be posed at that time.  Co-                       
chairman Sharp said he would take this matter under                            
advisement.  He further requested the Department of                            
Education to come up with a two-page run based on a new                        
identified heading.  He felt it was imperative for them to                     
know how much distortion new money added would go under the                    
two programs.                                                                  
                                                                               
                                                                               
ADJOURNMENT                                                                    
                                                                               
Co-chairman Sharp adjourned the meeting at approximately                       
11:25 a.m.                                                                     
                                                                               
SFC-98 -4- 3/6/98