Legislature(1997 - 1998)
05/09/1998 11:25 PM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| SB 36 | |||
| SB 151 | |||
| SB 216 | |||
| SB 219 | |||
| SB 231 | |||
| SB 263 | |||
| SB 264 | |||
| SB 340 | |||
| SB 347 | |||
| SB 360 | |||
HOUSE FINANCE COMMITTEE
May 9, 1998
11:25 P.M.
TAPE HFC 98 - 165, Side 1.
TAPE HFC 98 - 165, Side 2.
TAPE HFC 98 - 166, Side 1.
TAPE HFC 98 - 166, Side 2.
CALL TO ORDER
Co-Chair Hanley called the House Finance Committee meeting
to order at 11:25 P.M.
PRESENT
Co-Chair Hanley Representative Kelly
Co-Chair Therriault Representative Kohring
Representative J. Davies Representative Martin
Representative G. Davis Representative Moses
Representative Foster Representative Mulder
Representative Grussendorf
ALSO PRESENT
Speaker Gail Phillips; Representative Scott Ogan; Larry
LaBolle, Staff, Representative Richard Foster; James
Derringer, Staff, Representative Pete Kelly; Mary Lou
Burton, University of Alaska, Fairbanks; Nico Bus,
Administrative Services Manager, Division of Support
Services, Department of Natural Resources; John Bitney,
Alaska Housing Finance Corporation (AHFC), Anchorage; Mike
Kriever, Staff, Representative Vic Kohring; Rick Cross,
Deputy Commissioner, Department of Education; Eddy Jeans,
Manager, School Finance Section, Department of Education.
SUMMARY
SB 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.
SB 36 was HELD in Committee for further
consideration.
SB 231 An Act making and amending capital appropriations
and reappropriations and capitalizing funds; and
providing for an effective date.
SB 231 was HELD in Committee for further
consideration.
SB 360 An Act authorizing the issuance of bonds in the
amount of $257,600,000 by the Alaska Housing
Finance Corporation for certain capital projects;
relating to those bonds and to the appropriation
of revenue of the Alaska Housing Finance
Corporation; and providing for an effective date.
SB 360 was HELD in Committee for further
consideration.
SENATE BILL NO. 231
"An Act making and amending capital appropriations and
reappropriations and capitalizing funds; and providing
for an effective date."
Co-Chair Hanley spoke to SB 231, Amendment #1, providing a
sectional analysis. [Copy on File]. Representative Martin
asked to divide the amendment, with a deletion of the
deposit of the Permanent Fund, creating a separate
amendment. Co-Chair Hanley agreed and MOVED to ADOPT
Amendment #1(a). There being NO OBJECTION, #1(a) was
adopted.
Co-Chair Hanley MOVED to ADOPT #1(b), the last page of the
original amendment #1. Representative Martin OBJECTED. He
noted that he would not support making the deposit to the
earnings reserve into the principle of the Permanent Fund.
A roll call vote was taken on the motion to adopt #1(b).
IN FAVOR: J. Davies, G. Davis, Foster, Grussendorf,
Moses, Mulder, Hanley, Therriault
OPPOSED: Kelly, Kohring, Martin
The MOTION PASSED (8-3).
Co-Chair Hanley MOVED to ADOPT Amendment #2. [Copy on
File]. Representative Martin OBJECTED for the purpose of
discussion. Co-Chair Hanley explained that it was a
technical change to help implement a new phase in the
computer system, not only in the design of it.
Representative Martin WITHDREW the OBJECTION, and Amendment
Co-Chair Hanley MOVED to ADOPT Amendment #3. [Copy on
File]. Co-Chair Hanley explained that it would fund a
supplemental request for attorney fees for the Alaska
Commission on Judicial Conduct. There being NO OBJECTION,
it was adopted.
Co-Chair Hanley MOVED to ADOPT Amendment #4. [Copy on
File]. There being NO OBJECTION, it was adopted.
Representative Mulder MOVED to ADOPT Amendment #5. [Copy
on File]. He explained that Amendment #5 would provide
$500 thousand dollars, federal receipts, to be appropriated
to the Department of Corrections for procurement and
development of a computerized management information
system. There being NO OBJECTION, it was adopted.
Representative Mulder MOVED to ADOPT Amendment #6. [Copy
on File]. He explained that the amendment would remove
$100 thousand dollars from the University of Alaska Library
placing it toward the Alaskan Public Broadcasting
Commission for equipment purchase grant, and would then add
$70 thousand dollars for paving and improvements to Basher
Road in Anchorage.
Representative J. Davies questioned why Basher Road was
receiving an allocation. He asked if that area received
road matching funds or local taxes.
Representative J. Davies MOVED to DIVIDE the question
between the add ons. There being NO OBJECTION to dividing
the question, Representative Mulder MOVED to ADOPT #6(a),
the add-on to for Alaska Public Broadcasting Commission.
There being NO OBJECTION, it was adopted. Representative
Mulder explained a technical change to Amendment #6. He
noted that the bolded UAA Deferred maintenance/code
compliance should be removed. Representative Mulder MOVED
to ADOPT #6(b). There being NO OBJECTION, it was adopted.
Representative Foster MOVED to ADOPT Amendment #7. [Copy
on File].
LARRY LABOLLE, STAFF, REPRESENTATIVE RICHARD FOSTER,
explained that the amendment would provide a language
change which would allow for an upgrade of a Junior College
facility in the rural area. There being NO OBJECTION, it
was adopted.
Representative MOVED to ADOPT Amendment #8. [Copy on
File]. Mr. LaBolle noted that the amendment would provide
general fund dollars to the City of Nome, with a $100
thousand dollar match, for the purchase of a new
fire/rescue truck.
Co-Chair Hanley OBJECTED. He pointed out that the request
was straight general fund dollars.
A roll call vote was taken on the motion.
IN FAVOR: Foster, Grussendorf, Martin, Moses, J.
Davies
OPPOSED: G. Davis, Kelly, Kohring, Mulder,
Therriault, Hanley
The MOTION FAILED (5-6).
Representative Foster MOVED to ADOPT Amendment #9,
submitted by Representative Ivan. [Copy on File].
Representative Mulder explained that the funds were being
appropriated to the Division of Energy to work in
conjunction with Nuvista Light and Power on a feasibility
study to identify options for regionizing the power systems
in western Alaska. Co-Chair Hanley OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Grussendorf, Moses, Mulder, J. Davies
OPPOSED: Foster, Kelly, Kohring, G. Davis, Hanley,
Therriault
The MOTION FAILED (4-7).
Representative J. Davies MOVED to ADOPT Amendment #10.
[Copy on File]. He explained that amendment would
establish $4 million dollar federal receipts for the
Fairbanks Municipal Area transportation study. There being
NO OBJECTION, it was adopted.
Representative J. Davies MOVED to ADOPT Amendment #11.
[Copy on File]. He explained that the project was
requested because the sub-port was being closed. This
funding would provide for a replacement facility in
Southeast Alaska.
Co-Chair Hanley OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Grussendorf, Moses, J. Davies, Foster
OPPOSED: Kelly, Kohring, Martin, Mulder, G. Davis,
Therriault, Hanley
The MOTION FAILED (4-7).
Representative J. Davies MOVED to ADOPT Amendment #12.
[Copy on File]. He explained that the funding would be
used for upgrading the Mountainview Community Recreation
Center in the amount of $330 thousand dollars for the
project completion.
Co-Chair Hanley OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Moses, J. Davies, Grussendorf
OPPOSED: Kelly, Kohring, Martin, Mulder, G. Davis,
Foster, Therriault, Hanley
The MOTION FAILED (3-8).
Representative G. Davis MOVED to ADOPT Amendment #13.
[Copy on File]. He explained that the amendment would
provide money from the Exxon Valdez Oil Spill Restoration
Fund earnings to be used for specific purposes. He listed
the numerous appropriation specifications contained in
Amendment #13.
Co-Chair Hanley asked if Amendment #13 would replace
Section #12 of the current bill. Representative G. Davis
noted it would.
(Tape Change HFC 98- 165, Side 2).
Representative G. Davis reiterated that the amendment would
replace Section #12 and would eliminate subsection (b). He
added that subsection (b) would be addressed in a future
amendment. There being NO OBJECTION, it was adopted.
Representative G. Davis MOVED to ADOPT Amendment #14.
[Copy on File]. He commented that the amendment would
provide for "clean up" of the interest earned from the
Alyeska settlement fund in the amount of $400 thousand
dollars.
Co-Chair Hanley MOVED to AMEND Amendment #14, on line #4,
replace "grant" with "low interest loan". He pointed out
that there are five companies currently in the same
situation as Chenega and located in that spill area. Co-
Chair Hanley disagreed with the State paying for power
generation equipment for communities.
Representative G. Davis OBJECTED to the change proposed by
Co-Chair Hanley. He pointed out that the settlement fund
is required to be used for projects within Prince Williams
Sound. Following Committee discussion with Co-Chair
Hanley, Representative Davis WITHDREW his OBJECTION and
Amendment #14 was adopted as amended.
Representative G. Davis MOVED to ADOPT Amendment #15.
[Copy on File]. He explained that these sport fish license
fees are available to be appropriated to the Department of
Fish and Game for boat wake erosion studies and studies
including volume, time and location and operation of
vessels on the Kenai River. There being NO OBJECTION, it
was adopted.
Representative G. Davis MOVED to adopt Amendment #16,
intent language. [Copy on File]. He commented that the
language relates to hazardous substance contamination sites
and the need for a higher degree of professionalism when
addressing those concerns.
Representative J. Davies OBJECTED. He acknowledged that
there are occasional disagreements between local citizens
and the Department of Environmental Conservation (DEC),
however, DEC is sensitive to each situation and most often
does act with a high degree of "professionalism".
Representative J. Davies WITHDREW his OBJECTION, although,
noted that he did not want to indicate that there is a
"big" problem with DEC's behavior.
There being NO OBJECTION, Amendment #16 was adopted.
Representative Kelly MOVED to ADOPT Amendment #17. [Copy
on File]. He explained that the amendment would provide
for project planning money that had been listed on the
Statewide Transportation Improvement Plan (STIP) program
for Fairbanks. He pointed out that these funds have been
placed into a series of neighborhood projects. There being
NO OBJECTION, it was adopted.
Representative Kelly MOVED to ADOPT Amendment #18. [Copy
on File].
JAMES DERRINGER, STAFF, REPRESENTATIVE PETE KELLY, stated
that the amendment would provide for a statewide library
consortium database.
MARY LOU BURTON, UNIVERSITY OF ALASKA, FAIRBANKS, pointed
out that this project had been placed on the Board of
Regents priority list. There being NO OBJECTION to
Amendment #18, it was adopted.
Representative Kelly MOVED to ADOPT Amendment #19. [Copy
on File]. He noted that this amendment would provide
funding for the Mt. Edgecumbe power generation building,
chemical contamination and seal facility clean up. There
being NO OBJECTION, it was adopted.
Representative Kelly MOVED to ADOPT Amendment #20. [Copy
on File].
NICO BUS, ADMINISTRATIVE SERVICE MANAGER, DEPARTMENT OF
NATURAL RESOURCES, noted that Amendment #20 would delete
funding from the Mt. McKinley Meat and Sausage Plant. That
funding would be used for replacement of the micrographic
equipment in the recorder's office.
Representative J. Davies spoke strongly in favor of the
proposed legislation, noting that it was a much-needed
effort for that office. There being NO OBJECTION,
Amendment #20 was adopted.
Representative J. Davies MOVED to ADOPT Amendment #21.
[Copy on File]. Representative Mulder OBJECTED.
Representative J. Davies explained that the Alaska
Craftsman Home Program is very popular statewide and
provides building professional training for building five
star homes. He believed that Alaska Housing Finance
Corporation (AHFC) had corporate receipts to fund the
request.
JOHN BITNEY ALASKA HOUSING FINANCE CORPORATION (AHFC),
ANCHORAGE, spoke in favor of supporting the program. He
noted that AHFC supports this program as a competitively
bid program within AHFC, with the intent to assist
statewide home building industry.
Representative Mulder spoke against the amendment. He
suggested that there are many other programs which need
funding if an extra $300 thousand dollars exists.
Representative J. Davies countered that this program has
performed well for many years and that it is a program that
builders throughout the state are enthusiastic about.
A roll call vote was taken on the motion.
IN FAVOR: Moses, J. Davies, G. Davis, Grussendorf,
Kelly
OPPOSED: Martin, Mulder, Foster, Kohring, Hanley,
Therriault
The MOTION FAILED (5-6).
Representative Martin MOVED to ADOPT Amendment #22. [Copy
on File]. Representative Martin MOVED to change the
amendment by deleting "general fund" and replacing it with
"UAA deferred maintenance". He noted that the funding
would help the University to replace instruments which had
been damaged last September in the Music Department. Co-
Chair Hanley noted that it is essential to clarify that
this funding will be allocated not appropriated should it
become insurance reimbursable. There being NO OBJECTION,
Amendment #22 was adopted.
Co-Chair Therriault MOVED to ADOPT Amendment #23. [Copy on
File]. He explained that the funds would provide an
appropriation to the Alaska Court System for the assessment
and remediation of the "Year 2000" related computer
problems. There being NO OBJECTION, it was adopted.
Representative Kohring MOVED to ADOPT Amendment #24. [Copy
on File]. He stated that the funding would be used for the
City of Wasilla ground water contamination investigation.
There being NO OBJECTION, it was adopted.
Representative J. Davies MOVED to RESCIND action taken on
Amendment #21. There being NO OBJECTION, Amendment #21 was
before the Committee for reconsideration.
Representative J. Davies MOVED to ADOPT Amendment #21.
Representative Mulder OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: J. Davies, G. Davis, Grussendorf, Kelly,
Kohring, Moses
OPPOSED: Mulder, Foster, Martin, Hanley, Therriault
The MOTION PASSED (6-5).
REAPPROPRIATIONS
Co-Chair Hanley MOVED to adopt the draft reappropriation,
File]. There being NO OBJECTION, it was adopted as
Amendment #25.
Representative Moses MOVED to ADOPT Amendment #R-1. [Copy
on File]. This funding would provide for design and
construction of the Bethel public health facility. He
pointed out that adoption of this amendment would replace
previous action taken in the bill. There being NO
OBJECTION, it was adopted.
Representative Kohring MOVED to ADOPT Amendment #R-2.
[Copy on File]. He explained that the amendment would
provide funding to the Homer area for addressing the
Matanuska River erosion mitigation.
REPRESENTATIVE SCOTT OGAN emphasized that the dikes on the
Matanuska River require maintenance as the river erodes
them away. Representative J. Davies OBJECTED to process of
converting a loan to a reappropriation.
A roll call vote was taken on the motion.
IN FAVOR: J. Davies, G. Davis, Foster, Grussendorf,
Kohring, Martin, Moses, Mulder
OPPOSED: Kelly, Hanley, Therriault
The MOTION PASSED (8-3).
Co-Chair Hanley MOVED to ADOPT Amendment #R-3. [Copy on
File]. He commented that the amendment would provide a
change to one of the municipal matching grants which had
inadvertently been left out. There being NO OBJECTION, it
was adopted.
Representative Kohring MOVED to ADOPT Amendment #R-4.
[Copy on File]. He stated that this amendment would
provide a reappropriation to an Anchorage Senior Housing
program to include road construction and water connection.
Mr. Bitney noted that this reapporpriation would allow
funds to be placed in the same project intended last year.
The language of the amendment would correct technical
language that the U.S. Housing and Urban Development (HUD)
agency had last year. There being NO OBJECTION, the
amendment was adopted.
(Tape Change HFC 98 - 166, Side 1).
Representative Moses MOVED to ADOPT Amendment #R-5. [Copy
on File]. He commented that the appropriation would be
used on behalf of the Adak Reuse Corporation. There being
NO OBJECTION, it was so ordered.
Representative Martin MOVED to ADOPT Amendment #R-6. [Copy
on File]. Co-Chair Hanley explained that the funding would
be used for mailing, electronic registration and licensing
systems. There being NO OBJECTION, it was adopted.
Co-Chair Hanley MOVED to ADOPT Amendment #R-7. [Copy on
File]. There being NO OBJECTION, it was adopted.
Co-Chair Hanley MOVED to ADOPT Amendment #R-8. [Copy on
file]. There being NO OBJECTION, it was adopted.
Co-Chair Hanley MOVED to ADOPT Amendment #R-9. [Copy on
File]. There being No OBJECTION, it was adopted.
Co-Chair Hanley MOVED to ADOPT Amendments #R-10, #11, and
changes. There being NO OBJECTION, they were adopted.
Co-Chair Hanley MOVED to ADOPT Amendments #R-13 & #14.
[Copy on File]. The amendment would allow for the purchase
of election related equipment. There being NO OBJECTION,
they were adopted.
Co-Chair Hanley MOVED to ADOPT Amendment #R-15 which would
provide for a title change expansion within the Department
of Health and Social Services. [Copy on File]. There
being NO OBJECTION, it was adopted.
Co-Chair Hanley MOVED to ADOPT Amendment #R-16 which would
provide for the Department of Public Safety to purchase
four patrol vessels. [Copy on File]. There being NO
OBJECTION, the motion was adopted.
Co-Chair Hanley MOVED to ADOPT Amendments #R-17 & #18,
changes to airport projects. [Copy on File]. There being
NO OBJECTION, the motion was adopted.
Representative Martin MOVED to ADOPT Amendment #R-19.
[Copy on File]. There being NO OBJECTION, the motion was
adopted.
Co-Chair Hanley MOVED to ADOPT Amendment #R-20. [Copy on
File]. He explained that this would be lapse money
allocated to the City of Sitka, to assist with the final
payment to the Corps of Engineers for the inner-harbor
facility improvements, and to the City of Ouzinkie, interim
solution for moorage during the completion of a breakwater
dredging and construction. [Copy on File]. There being NO
OBJECTION, it was adopted.
Representative Mulder MOVED to ADOPT Amendment #26. [Copy
on File]. He stated that this would be money dispersed to
Anchorage for economic development of the Ship Creek area,
as well as library books for the University of Anchorage,
boys and girls clubs, blood banks, digital technology and
citizens patrol.
Representative J. Davies OBJECTED. He pointed out that the
back-up information regarding potential projects indicates
that no Minority members had been polled. Representative
Mulder acknowledged that an attempt had been made to have
an Anchorage caucus meeting in order to address these
projects. He added that the vast majority of the House and
Senate membership supported the amendment.
A roll call vote was taken on the motion.
IN FAVOR: G. Davis, Foster, Grussendorf, Kelly,
Kohring, Martin, Moses, Mulder, Therriault
OPPOSED: J. Davies, Hanley
The MOTION PASSED (9-2).
SB 231 was HELD in Committee for further consideration.
SENATE BILL NO. 360
"An Act authorizing the issuance of bonds in the
amount of $257,600,000 by the Alaska Housing Finance
Corporation for certain capital projects; relating to
those bonds and to the appropriation of revenue of the
Alaska Housing Finance Corporation; and providing for
an effective date."
Co-Chair Hanley spoke to Amendment #1, #0-LS1780\K.3, Cook,
5/9/98. [Copy on File]. He explained that Amendment #1
would adopt changes made in the authorization bill which
had been made to the appropriation bill and which would
include authorization for certain bond projects.
Co-Chair Hanley advised that Amendment #1 would make the
changes based on Amendment #1, SB 231. He added when the
amendment is moved, it will include the other amendments in
the appropriations bill so as to conform these changes with
the AHFC bonding bill.
Co-Chair Hanley MOVED to ADOPT Amendment #1 with the
addition of necessary technical changes so that the
authorization bill will conform. There being NO OBJECTION,
it was adopted.
SB 360 was HELD in Committee for further consideration.
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."
Representative Mulder MOVED that work draft #0-LS0070\J,
Ford, 5/8/98, be the version before the Committee. [Copy on
File]. There being NO OBJECTION, it was so ordered.
Co-Chair Therriault MOVED to ADOPT Amendment #1. [Copy on
File].
EDDY JEANS, MANAGER, SCHOOL FINANCE SECTION, DEPARTMENT OF
EDUCATION, explained that the amendment would add money
appropriated for single site funding to the base in order
to calculate the funding floor. There being NO OBJECTION,
it was adopted.
Co-Chair Therriault MOVED to ADOPT Amendment #2. [Copy on
File]. Mr. Jeans explained that Amendment #2 would add a
transition section defining "basic need" for the purpose of
calculating the required local effort. For some school
districts, local effort requirement will be 45%. There
being NO OBJECTION, it was adopted.
Co-Chair Therriault MOVED to ADOPT Amendment #3. [Copy on
File]. Mr. Jeans explained that Amendment #3 would allow
the pro-ration of the quality school grant funds. Co-Chair
Therriault added that these schools would be treated the
same way, noting that the pro-ration formula which also
applies to the general formula. Mr. Jeans commented the
action would delete "competitive" before "grant". There
being NO OBJECTION, Amendment #3 was adopted.
Co-Chair Therriault MOVED to ADOPT Amendment #4. [Copy on
File]. Mr. Jeans commented that Amendment #4 would delete
the language which the Department of Education recommended
on Line 7, Page 5. There being NO OBJECTION, the motion
was adopted.
Co-Chair Therriault MOVED to ADOPT Amendment #5. [Copy on
File].
RICK CROSS, DEPUTY COMMISSIONER, DEPARTMENT OF EDUCATION,
explained that Amendment #5 would modify the quality school
language. The substantive change is that the accreditation
process would be removed.
Mr. Cross advised that during the past week, Commissioner
Holloway had been holding meetings with school communities
in the State in order to discuss the proposed language.
Mr. Cross pointed out that Amendment #5 was the result of
those conversations, and has the support of the Department
of Education.
Co-Chair Therriault asked if school districts would be
required to continue reporting. Mr. Cross replied that
there would continue to be a testing and reporting of
student results in order to insure that students are
meeting high standards. Such action provides a tool to
identify schools in crisis and decline, requiring them to
submit improvement plans. If during the next two-year
cycle improvement was not occurring, those school districts
would then have to submit a report to the State Board of
Education.
There being NO OBJECTION, Amendment #5 was adopted.
Co-Chair Therriault stated that Amendment #6 would be HELD.
[Copy on File]. He asked Mr. Cross to address the
problematic impact of "bumping up" the determination need
for two schools or two programs.
Mr. Cross replied that Amendment #6 would move the
definition of "school" from regulation to statute,
establishing definition for application of a foundation
formula. The definition provided during a previous
Committee meeting included a "breaking" point as to where
to begin running an elementary or secondary program in
communities that were greater than 50 and up to 75
students. Amendment #6 would change that number from 50 to
100. Additionally, for those communities over 750,
alternative schools would be counted separately when having
over 200 students. At this time, Alaska does not have
alternative schools with over 200 students.
In response to Representative G. Davis, Mr. Cross explained
that prior to SB 36, there has not been a definition of
schools for the specific purpose of computing state aid.
This is the first bill which uses schools as a point of
focus. The definition was created for the purpose of
applying state aid and was made in consultation with
McDowell Group.
Co-Chair Therriault stated that Amendment #6 would be HELD
for further consideration. Representative Foster
questioned the impact of the proposed amendment. Co-Chair
Therriault replied that the impact would be to those school
districts with over 50 children, which are counted as two
schools. Amendment #6 would raise the break point of one
school up to 100 students. Co-Chair Therriault remarked
that the Committee would need more time to consider the
number of schools which that change would impact.
Co-Chair Therriault MOVED to ADOPT Amendment #7. [Copy on
File]. He explained that Amendment #7 would provide a two-
year phase-in for districts benefiting under the new
proposed formula. There being NO OBJECTION, it was
adopted.
Representative J. Davies MOVED to ADOPT Amendment #8.
[Copy on File]. Co-Chair Therriault OBJECTED.
Representative J. Davies noted that the amendment would
delete the comparison of administrative to instructional
costs. He explained that the "average" recommended in the
proposed legislation was heavily weighted toward larger
districts. Amendment #8 provides language to address this
concern.
Co-Chair Therriault questioned the Department's procedures
when viewing district records, moving them into compliance,
filing information. Mr. Jeans responded that school
districts are statutorily required to have an annual
financial audit. The problem, which the McDowell Group
discovered, is that the Chart of Account used is only a
guide, and that there are 53 different school districts
interpreting that information differently. He guaranteed
that there will be inconsistencies without the Department
staff comparing expenditures.
Co-Chair Therriault asked if the Department had proposed
regulations that could define the chart, which would
hopefully lead to a more consistent reporting. Mr. Jeans
replied that the Department did initiate that process and
that the State Board of Education had adopted a revised
Chart of Accounts. The definitions are now tighter.
Representative J. Davies pointed out that currently, there
has not been enough time to gauge for the efficiency
follow-up.
(Tape Change HFC 98 - 166, Side 2).
Mr. Cross understood that the language referenced by
Representative Mulder would indicate that an analysis would
occur in order to guarantee that a school district
complies. If they do not comply, they would need to
petition the Department to receive justification. If a
waiver were granted, it would be forwarded to the
Legislative Budget and Audit Committee (LBA) for review.
He believed that a standard was being established in which
most districts in the State would not be able to comply,
consequently, the Department believes that the exemptions
will become standard.
Mr. Cross pointed out that the operative portion of
Amendment #8 would provide oversight to insure that the
administrative costs are minimized. The idea is consistent
with what the McDowell Study recommended. All the audits
done in the State are independent and must apply with
generally acceptable accounting principles. Therefore,
there are wide differences in how each district reports
information. Until there is an agreement within the
districts to gain consistency in reporting, it will be
difficult to establish targets and goals. The Department
needs to provide the oversight and to work in partnership
with the school districts.
Co-Chair Therriault inquired the percentage of districts
which operate efficiently. Mr. Cross replied that would be
an impossible question to answer because of the vast
differences which exist in our school districts.
A roll call vote was taken on Amendment #8.
IN FAVOR: Grussendorf, Moses, J. Davies
OPPOSED: Foster, Kelly, Kohring, Martin, Mulder, G.
Davis, Therriault
Representative Hanley was not present for the vote.
The MOTION FAILED (3-7).
Representative Grussendorf MOVED to ADOPT Amendment #9.
[Copy on File]. He explained that the amendment would
address the true and assessed value of a borough. The
North Slope Borough is afraid that they will not be capable
to continue to make a high payment as they have in the
past. Passage of the amendment would allow them to
contribute the same amount as in prior years.
Mr. Cross commented that when the current foundation
formula was developed ten years ago, everyone believed that
the assessed valuation of the North Slope Borough (NSB) was
the "high" number. The formula was written with that
amount and the excess contribution was based on $12 million
dollars. When SB 36 was drafted, the high number was used
and the North Slope Borough based their calculations on
that understanding. Current law was written to allow a
high local contribution for the NSB. Representative
Grussendorf emphasized that Amendment #9 is essential to
continue the practice currently used in that community.
Co-Chair Therriault questioned the impact. Mr. Cross
explained that NSB has both a required local effort and an
excess local effort to arrive at their cap which is 23% of
the basic need. NSB does not have a cap because it falls
outside the disparity test, resting in the high five
districts of the State. The crafters of the current
foundation formula wanted some limit on the amount that NSB
should contribute. Two (2) mills was used, based on the
belief that to use the higher accessed number would
determine the value. He continued, 2 mills was under the
target and, thus, was allowed.
Representative J. Davies pointed out that the community
does not want to be limited by the lower amount and that
the language of the amendment stipulates that they could
use last year's amount. Co-Chair Therriault noted that if
the pending litigation determines that the assessed
valuation is the lower amount, they would be able to use
prior years-actual local contribution or the 2 mills.
Mr. Jeans explained that currently, NSB is contributing
approximately $27 million dollars toward their school-
operating budget. The proposed language would allow them
to continue to contribute at the $27 million dollar level.
Co-Chair Therriault noted that Amendment #9 would be HELD
in Committee.
SB 36 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting adjourned at 2:40 A.M.
H.F.C. 17 5/09/98 p.m.
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