Legislature(2017 - 2018)ADAMS ROOM 519

03/30/2018 01:30 PM FINANCE

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as
Download Video part 1. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 2:45 pm --
Moved CSHB 212(FIN) Out of Committee
-- Public Testimony --
Heard & Held
-- Public Testimony --
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 212                                                                                                            
     "An  Act relating  to funding  for school  construction                                                                    
     and  major maintenance;  and relating  to the  regional                                                                    
     educational attendance area  and small municipal school                                                                    
     district fund."                                                                                                            
2:52:01 PM                                                                                                                    
Co-Chair Foster passed the gavel to Co-Chair Seaton.                                                                            
2:52:23 PM                                                                                                                    
AT EASE                                                                                                                         
2:52:56 PM                                                                                                                    
REPRESENTATIVE NEAL  FOSTER, SPONSOR, provided  detail about                                                                    
the  bill. He  reported that  HB 212  expanded the  Regional                                                                    
Education Attendance  Area (REAA)and small  municipal school                                                                    
district fund  to include major  maintenance in  addition to                                                                    
new  school  construction. The  bill  would  save the  state                                                                    
money by  reducing the  need for  replacement. The  bill was                                                                    
supported by  the Coalition for Education  Equity, which was                                                                    
a coalition  comprised of several  school districts  and was                                                                    
heavily  involved in  the Kasayulie  decision. He  asked his                                                                    
staff to continue.                                                                                                              
JANE  PIERSON, STAFF,  REPRESENTATIVE NEAL  FOSTER, provided                                                                    
an explanation  of changes in  the new  Committee Substitute                                                                    
     Section 1 from  version D is eliminated  from version U                                                                    
       The new CS supports  keeping the two lists for school                                                                    
     construction   and  major   maintenance  as   they  are                                                                    
     currently in statute.                                                                                                      
     Section  2  is new,  amending  AS  14.11.030(b) to  add                                                                    
     clarifying  language  that  it is  the  unexpended  and                                                                    
     unobligated  balance of  the fund  that may  not exceed                                                                    
     Section 3  Adds a  new subsection AS  14.11.030(e) that                                                                    
     states  that  not more  than  20  percent of  the  fund                                                                    
     available  for appropriation  from the  REAA and  small                                                                    
     municipal school  district fund  may be used  for major                                                                    
     maintenance projects.                                                                                                      
Ms. Pierson  cited the two  spreadsheets that  were included                                                                    
in  members' files;  "With School  Debt Program  Reinstated"                                                                    
and  "Without  School  Debt  Program  Reinstated"  (copy  on                                                                    
file). She  continued to  address the  bill with  a prepared                                                                    
     The  school construction  and  major maintenance  grant                                                                    
     programs  were  the   only  significant  programs  that                                                                    
     provided funding  for new construction,  renovation, or                                                                    
     major maintenance  without bonding capacity.  A healthy                                                                    
     and continued grant program for construction and                                                                           
     major  maintenance provided  a vetted  solution to  the                                                                    
     funding for high priority  major maintenance needs such                                                                    
     as  boilers, roofs,  and  other  important systems  and                                                                    
     safety measures in schools.                                                                                                
Ms. Pierson  furthered that in  2010 the  legislature passed                                                                    
SB 237  - School Construction &  Costs [CHAPTER 93 SLA  10 -                                                                    
06/21/2010], which  established the  REAA and in  2013, five                                                                    
small  municipal districts  were included  in the  fund. The                                                                    
program  was a  success and  greatly reduced  the number  of                                                                    
schools  on   the  school   construction  grant   list.  She                                                                    
explained that the  funding was based on the  amount of debt                                                                    
outstanding for municipal schools  adjusted by the amount of                                                                    
money spent  on REAA schools  and by the percent  of student                                                                    
population.  The  method  provided  a  consistent  level  of                                                                    
funding  for  REAA  and small  municipal  school  districts'                                                                    
school  construction and  addressed the  concerns raised  in                                                                    
the  Kasayulie   case.  She  furthered  that   in  2015  the                                                                    
legislature passed  SB 64 -  School Bond  Debt Reimbursement                                                                    
[CHAPTER 3 SLA  15 - 04/24/2015], which  placed a moratorium                                                                    
on   school  projects   employing   debt  reimbursement   as                                                                    
authorized  by local  voters until  July 1,  2020. Currently                                                                    
due   to  an   increase  in   applications  for   the  major                                                                    
maintenance grant  funding list  the bill expanded  the REAA                                                                    
funding  which was  beneficial for  rural and  urban Alaska.                                                                    
She elaborated  that by including  major maintenance  to the                                                                    
REAA  fund other  non-REAA projects  could take  priority on                                                                    
the major maintenance list.                                                                                                     
2:57:52 PM                                                                                                                    
Vice-Chair  Gara  MOVED  to  ADOPT  the  proposed  committee                                                                    
substitute  for  HB  212, Work  Draft  30-LS0741\U  (Laffen,                                                                    
3/29/18). There being NO OBJECTION, it was so ordered.                                                                          
Co-Chair Foster  summarized that  the bill  did not  ask for                                                                    
additional funding,  it merely changed  how the pie  was cut                                                                    
and  how  the  funds   were  allocated.  He  explained  that                                                                    
currently  the  funding  was   only  authorized  for  school                                                                    
construction for  REAA schools  and the bill  requested that                                                                    
the money  could also fund major  maintenance. He emphasized                                                                    
that the bill did not request more money.                                                                                       
Representative  Wilson asked  for  the  definition of  major                                                                    
maintenance. Ms. Pierson replied  that the definition was in                                                                    
AS 14.11.013. She read the following from the statute:                                                                          
     (A) avert imminent danger or correct life-threatening                                                                      
          (B)   house  students   who  would   otherwise  be                                                                    
          unhoused;  for  purposes   of  this  subparagraph,                                                                    
          students are  considered unhoused if  the students                                                                    
          attend school in temporary facilities;                                                                                
          (C) protect the structure of existing school                                                                          
          (D) correct building code deficiencies that                                                                           
          require major repair or rehabilitation in order                                                                       
          for the facility to continue to be used for the                                                                       
          educational program;                                                                                                  
          (E) achieve an operating cost savings;                                                                                
          (F) modify or rehabilitate facilities for the                                                                         
          purpose of improving the instructional program;                                                                       
          (G) meet an educational need not specified in (A)                                                                     
           - (F) of this paragraph, identified by the                                                                           
Ms. Pierson  indicated that  the projects  had to  cost over                                                                    
$25  thousand.  Representative   Wilson  asked  whether  the                                                                    
funding applied  to any district  or only REAA  schools. Ms.                                                                    
Pierson  replied that  the funding  applied to  REAA schools                                                                    
and  the small  municipal  districts. Representative  Wilson                                                                    
spoke about the state's other  project list for school major                                                                    
maintenance  that included  many urban  schools. She  stated                                                                    
that REAA schools  on the state major  maintenance list that                                                                    
were funded  through the REAA  fund would move off  the list                                                                    
and allow other schools to advance on the list.                                                                                 
3:00:40 PM                                                                                                                    
Ms. Pierson  replied that a  major maintenance  list existed                                                                    
and was included  in members' packets (copy  on file) titled                                                                    
"Attachment  4 Major  Maintenance List  FY 19  Final," which                                                                    
included the  Department of Education and  Early Development                                                                    
(DEED)   Capital  Improvement   Projects  (FY   2019)  Major                                                                    
Maintenance Grant Fund. Representative  Wilson was trying to                                                                    
connect  the  dots  and  understand  the  project  list  Ms.                                                                    
Pierson was  referring to.  She used an  example with  a top                                                                    
listed school  being a REAA  school and inquired  whether it                                                                    
could  use  funding  from  the REAA  fund  versus  using  an                                                                    
Undesignated  General  Fund  (UGF) only  appropriation.  Ms.                                                                    
Pierson replied in the affirmative.                                                                                             
Representative   Tilton   asked   whether  there   was   any                                                                    
prioritization    of   maintenance    versus   new    school                                                                    
construction  and  if  so, she  wondered  why.  Ms.  Pierson                                                                    
explained  that the  reason the  CS included  that not  more                                                                    
than  20 percent  of the  fund  available for  appropriation                                                                    
from the REAA  and small municipal school  district fund may                                                                    
be used  for major  maintenance projects  was to  ensure the                                                                    
priority   was  new   school  construction.   The  provision                                                                    
specified "up to 20 percent"  because at times of new school                                                                    
construction utilizing 20 percent might not be possible.                                                                        
Representative Tilton  asked for  the average lifespan  of a                                                                    
school building  covered by the  bill. Ms.  Pierson deferred                                                                    
to  the  Department  of   Education  and  Early  Development                                                                    
Vice-Chair  Gara recalled  that in  some cases  it had  been                                                                    
easier to move  up the major maintenance list  if the school                                                                    
district  had more  resources  to justify  its  need in  the                                                                    
application,  leaving  districts  with  less  funding  at  a                                                                    
disadvantage on the list. He  asked whether the scenario had                                                                    
been  a  concern.  Ms.  Pierson  responded  that  the  Major                                                                    
Maintenance  Grant  Fund  was   a  grant  program  requiring                                                                    
applications.  She pointed  to  AS  14.11.011 that  outlined                                                                    
application   requirements.  She   agreed   that  a   better                                                                    
application proposal could improve  the chances of rising on                                                                    
the  list.  However,  she  pointed   to  the  current  major                                                                    
maintenance list  and noted that the  first, fifth, seventh,                                                                    
eighth, fourteenth, sixteenth,  and seventeenth schools were                                                                    
all REAA.                                                                                                                       
3:04:03 PM                                                                                                                    
Vice-Chair  Gara  did not  want  a  REAA  school to  not  be                                                                    
included on  the major maintenance  list if REAA  funds were                                                                    
diminished   and  guessed   that  was   also  the   sponsors                                                                    
intention. He  deduced that the  bill's purpose was  to find                                                                    
an  "easier source  of funding"  for some  major maintenance                                                                    
but  not remove  REAA  schools from  the  list. Ms.  Pierson                                                                    
answered in  the affirmative and  noted that was  the reason                                                                    
the sponsor  wanted only one  list. She detailed  that there                                                                    
was a  cap on the  REAA small  municipal school fund  of $70                                                                    
million. She indicated  that in 2011 some  funding was moved                                                                    
out of the fund and it  would be "advantageous" to use funds                                                                    
for maintenance.                                                                                                                
Representative  Tilton restated  her  question regarding  an                                                                    
average current  building life span to  help understand what                                                                    
the maintenance level was.                                                                                                      
TIM  MEARIG, SCHOOL  FINANCE AND  FACILITIES, DEPARTMENT  OF                                                                    
EDUCATION AND  EARLY DEVELOPMENT, answered that  no standard                                                                    
life span  for schools existed.  The district used  50 years                                                                    
as an  average. Representative  Tilton asked whether  the 50                                                                    
years applied to all school  districts. Mr. Mearig responded                                                                    
that  it was  difficult to  speak to  average life  spans of                                                                    
individual  buildings  but  overall   the  state  strove  to                                                                    
achieve 50 years of life for school facilities.                                                                                 
Co-Chair  Seaton   asked  for  clarification.   He  wondered                                                                    
whether  the answer  applied to  REAA buildings.  Mr. Mearig                                                                    
replied that he  was speaking about the  average lifespan of                                                                    
the buildings. He had details  on the average age of schools                                                                    
but was referring to average lifespan.                                                                                          
Representative Guttenberg  asked how the list  was upgraded.                                                                    
He looked  at the  order of  the list  and asked  why school                                                                    
number 4 that was  at the cut off in the  prior year was not                                                                    
always  the  first  on  the  list  the  following  year.  He                                                                    
inquired  how the  ranking took  place. Mr.  Mearig answered                                                                    
that  all  the projects  were  ranked  against a  series  of                                                                    
criteria by points, which  determined priority. He furthered                                                                    
that if  a project that was  introduced in a given  year had                                                                    
points exceeding  other projects  previously on the  list it                                                                    
would   out  rank   the  prior   year's  priority   schools.                                                                    
Representative  Guttenberg  noted  that  priorities  changed                                                                    
from year to  year. He asked if a school  was given a chance                                                                    
to redo its grant application from one year to the next.                                                                        
3:10:10 PM                                                                                                                    
Mr.  Mearig responded  that  every year  a  district had  an                                                                    
opportunity  to  apply  for  the  grant.  He  reported  that                                                                    
several  years  ago  the  department  allowed  districts  to                                                                    
extend  the previous  year's application  for an  additional                                                                    
year, so they would not have  to invest in a new application                                                                    
every  year. The  scores from  the prior  year were  carried                                                                    
over  for one  additional year,  but the  district would  be                                                                    
able to  write a  new application  with better  or different                                                                    
information  in an  attempt to  elevate the  project on  the                                                                    
Co-Chair Seaton OPENED public testimony.                                                                                        
KERRY BOYD,  SUPERINTENDENT, YUKON KOYUKUK  SCHOOL DISTRICT,                                                                    
EAGLE RIVER  (via teleconference),  spoke in support  of the                                                                    
legislation and believed it would  help her school district.                                                                    
The bill  would potentially allow  for the backlog  of major                                                                    
maintenance projects  to be addressed.  She stated  the need                                                                    
for the major maintenance grants  to be funded. She reported                                                                    
that  the governor  had requested  $70 million  in HB  282 -                                                                    
Approp: Capital Budget Contingent  on Tax. She asked whether                                                                    
the  funding would  be included  in the  capital budget  and                                                                    
asked the committee to pass HB 212.                                                                                             
Representative  Guttenberg  asked  Ms.  Boyd  to  provide  a                                                                    
geographic   description  of   the   Yukon  Koyukuk   school                                                                    
district.  Ms.   Boyd  complied  and  noted   that  she  was                                                                    
presently  in  the  Eagle  River   office.  She  listed  the                                                                    
districts  that  included  six  urban  areas  in  Fairbanks,                                                                    
Wasilla, Delta  Junction, and Juneau.  The ten  rural remote                                                                    
schools in  the district  were spread  out over  70 thousand                                                                    
square miles;  most were accessed  by airplane and  two were                                                                    
accessible  via road.  The district  had some  older schools                                                                    
and that were addressed through the major maintenance list.                                                                     
Co-Chair Seaton CLOSED public testimony.                                                                                        
Representative Wilson  MOVED to REPORT CSHB  212(FIN) out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
There being NO OBJECTION, CSHB  212(FIN) was REPORTED out of                                                                    
committee  with  a "do  pass"  recommendation  and with  one                                                                    
previously published zero fiscal note: FN1 (EED).                                                                               
3:15:23 PM                                                                                                                    
AT EASE                                                                                                                         
3:18:21 PM                                                                                                                    

Document Name Date/Time Subjects
HB 316 Sectional Analysis.pdf HFIN 3/30/2018 1:30:00 PM
HB 316
HB316 Sponsor Updated.pdf HFIN 3/30/2018 1:30:00 PM
HB 316
Washington Post- Supporting Doc 1.pdf HFIN 3/30/2018 1:30:00 PM
HB 316
Washington Post Supporting Doc 2.pdf HFIN 3/30/2018 1:30:00 PM
HB 316
CSHB 231 (FSH) Explanation of Changes FINAL 3.27.18.pdf HFIN 3/30/2018 1:30:00 PM
HB 231
CSHB 231 (FSH) Sectional Analysis FINAL 3.27.18.pdf HFIN 3/30/2018 1:30:00 PM
HB 231
HB 231 Transmittal Letter 4.14.17.pdf HFIN 3/30/2018 1:30:00 PM
HB 231
CSHB 231 (FSH) H FIN Presentation FINAL 3.30.18 .pdf HFIN 3/30/2018 1:30:00 PM
HB 231
HB 316 Supporting Doc ACLU to H-FIN re HB 316 (Final).pdf HFIN 3/30/2018 1:30:00 PM
HB 316
HB 212 CS version U.pdf HFIN 3/30/2018 1:30:00 PM
HB 212
HB 212 - Explanation of changes D to U 3.27.18.pdf HFIN 3/30/2018 1:30:00 PM
HB 212
HB 212 - Sectional version U.pdf HFIN 3/30/2018 1:30:00 PM
HB 212
HB 316 - Department of Law Concern 3.29.18.pdf HFIN 3/30/2018 1:30:00 PM
HB 316
HB212model_wo SDR.pdf HFIN 3/30/2018 1:30:00 PM
HB 212
HB212model_w SDR.pdf HFIN 3/30/2018 1:30:00 PM
HB 212