Legislature(2005 - 2006)CAPITOL 17
04/20/2006 09:00 AM House RULES
| Audio | Topic |
|---|---|
| Start | |
| HB278 | |
| HB13 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| = | HB 13 | ||
| = | HB 278 | ||
HB 13-SCHOOL CONSTRUCTION BOND REIMBURSEMENT [Contains discussion of SB 36 and HB 493.] 9:30:04 AM CHAIR ROKEBERG announced that the final order of business would be HOUSE BILL NO. 13, "An Act relating to reimbursement of municipal bonds for school construction; and providing for an effective date." [Before the committee was CSHB 13(FIN).] 9:31:02 AM REPRESENTATIVE HARRIS moved to adopt the proposed committee substitute (CS) for HB 13, Version 24-LS0062\R, Mischel, 4/11/06, as the working document. REPRESENTATIVE BERKOWITZ objected for discussion purposes. He stated his understanding that Version R removes the area cost differential component of the title, and he said he wishes the committee would not take that action. He related: Normally I like tightening titles, but I think that this is a conversation that the legislature has to have. And if we have a vehicle that's going to give us the ability to continue that conversation, I think we ought to keep that in play. And as for the ... subsequent component of area cost differential, that's a tactical consideration... REPRESENTATIVE HARRIS interjected to withdraw his motion [to adopt Version R as a work draft; therefore CSHB 13(FIN) was once again before the committee]. CHAIR ROKEBERG asked the co-sponsor of the bill to speak to the original bill. 9:32:28 REPRESENTATIVE GATTO, Alaska State Legislature, as co-prime sponsor of HB 13, said he would like to speak to Representative Berkowitz's objection to adopting Version R as a work draft. He reported that the studies referring to the cost differential and how it affects the state are so significant that "it ought to be a stand-alone piece of legislation, if that's what we want to do." He said, "It would be like taking this bill and attaching SB 36 and calling that an amendment to a simple bill, and making the amendment 35 pages." He said the area cost differential is going to affect all 53 school districts in the state, and "we will have winners and losers." He classified the Anchorage, Fairbanks, and Matanuska-Susitna school districts as losers. REPRESENTATIVE HARRIS asked Representative Gatto to explain how those school [districts] are losers. REPRESENTATIVE GATTO responded: Because what the area cost differential does is it takes the existing money we appropriate for education, according to a formula in SB 36, and changes the formula. That means if the money remains a constant, then we have to deduct money from some districts in order to increase the amount of money that's forwarded to other districts. So, it becomes the kind of thing that is a play of individuals against individuals, districts against districts. And so, what I'd like to say is I think it would be more appropriate to make that a separate issue and go ahead and adopt the CS so that we can talk about this one issue of school bond debt reimbursement and not get, at this point, into an issue that is so significant that it would require a significant amount. 9:34:12 AM CODY RICE, Staff to Representative Carl Gatto, Alaska State Legislature, on behalf of Representative Gatto, co-prime sponsor of HB 13, suggested that the simplest way of looking at the cost differential is in terms of market share. He mentioned the fiscal note, which shows the percent change in market share by district. REPRESENTATIVE HARRIS interjected that he understands when "the amount of money you have is the same and you're to split it up differently." However, he said he thinks the reality is that the money is not going to remain the same. He stated, "So, I think ... the intent is to divide a larger pot of money up a slightly bit different." MR. RICE replied that that is possible. He said there has been talk of a "hold harmless." He said it's important to note that the hold harmless would need to be permanent - not a one-time fix - because there would be a permanent change of market share for different districts. He projected that the [school] districts of every member of the committee would lose market share. 9:35:37 AM REPRESENTATIVE MCGUIRE asked Representative Gatto to explain the steps that brought the cost factors into the title of the bill. REPRESENTATIVE GATTO offered his understanding that in the House Finance Committee an amendment was offered by Representative Chenault to add the study, but was then withdrawn. MR. RICE detailed that what had happened is that Representative Chenault had "added in a phase-in form of the cost factor study," which he noted is shown on pages 7-9 of CSHB 13(FIN). He pointed out that Version R would extend the bond debt reimbursement date through November 30, 2008, whereas the bill before the committee does not do that. Furthermore, regarding the cost factor study, Mr. Rice said Representative Chenault's previously mentioned amendment involved a hold harmless [clause] based on "last year's base student allocation." He said, "So, if it is the will of the committee to keep something like that in there, I would strongly recommend increasing that number to be a true hold harmless." 9:37:28 AM MR. RICE, in response to a request from Representative Harris, directed attention to language in the bill on page 9, [line 21], which read, "base student allocation of $4,919 per student". He said that amount "would not be sufficient for a hold harmless." 9:37:52 AM CHAIR ROKEBERG said, "Part of the intent of having ... [Version R] before us was to reorder the numbers that have caused some of the confusion." He offered his understanding that CSHB 13(FIN) has been in the hands of the committee for a year. MR. RICE confirmed that [the committee has had CSHB 13(FIN) for a year]. CHAIR ROKEBERG concluded, "That was my intention as the chairman, and that was more structural than substantive. Just so people understand that it might help [to know] why that is." 9:38:18 AM REPRESENTATIVE MCGUIRE noted that Representative Gatto had begun to say that an amendment was offered by Representative Chenault that had been withdrawn; however, on pages 7-9 of the bill, she observed that reference is made to district cost factors, and a reflection of that shows in the title. She said, "So, somehow that concept was incorporated, whether it was that amendment or another." She clarified, "I'm trying to understand how that conversation went, whether you were accepting of it at that time, [and,] if so, what made you change your mind now." She said she would also like to know if Representative Gatto has had conversations with Representative Chenault "about the removal of this." REPRESENTATIVE GATTO responded that he has never been in favor of the cost factor study or the "American Institute for Research (AIR)" study. He said the AIR study was flawed and the flaws could be identified "in all the areas that we actually knew the numbers." He continued: So, the [Institute of Social and Economic Research (ISER)] study became a substitute study. The ISER study brought forward somewhat similar ... results. And my understanding is, from reading the results, what the ISER study will do is reapportion a pie. Now, my biggest concern is that if you take brand new money - let's say $90 million - and distribute it somewhat differently, remember ... the $90 million is in addition to close to a billion. If the ISER study were to apply only to the new money, that would be one issue, but if it ... is retroactive and starts to include close to a billion dollars, now we're reappropriating money in huge, huge gulps. So, I would ... have expected that the introduction of the ISER study would have said, "Take this new money and reapportion this new money" -- we would essentially have two formulas. I don't believe I'm seeing that happen. And to further complicate it, there is also half ISER, quarter ISER, bring it in over two years or four years; it becomes somewhat of a complicated issue. And if we want to address that complicated issue at this late date, we're going to take a lot more committee time in all likelihood to come back to the school district and the finance ... director and talk about how the money would be distributed. But we did get a study done, and the study goes across and says under the old formula here's how each school district will fare [and] under the new formula here's how each school district would fare. We came up with the percent movement, as well as the percent difference. And ... then I had it run a couple of different ways, and that is from the worst to the best ... and also alphabetically so you could find your personal district. And on the ... Anchorage district, if indeed we were working under the ISER study, and not under SB 36, they would have an 8 percent - according to this page - 8 percent reduction in the amount of money they were receiving from the state ... in the share of the entire pie. In order to bring them back up to zero, so they do not lose, we would need substantially more money. 9:42:01 AM REPRESENTATIVE MCGUIRE said she understands that part but wants an answer as to how it is that the reference to the cost factors - which she said she understands Representative Gatto does not support - got into the bill. She asked whether it is his intent to remove the [cost factor references] now and whether he had conversations with, for example, Representative Chenault who put that reference in the bill. REPRESENTATIVE GATTO responded that he was not present during the House Finance Committee meeting and only later learned from Representative Meyer that Representative Chenault had "offered the ISER and then withdrew it." He said he did not see that language in Version R, and he explained his understanding was that it would be offered on the House floor. He said he would be okay with battling the issue out on the House floor, because it's an issue that should be discussed among a group larger than one committee. 9:43:17 AM MR. RICE recollected that Representative Chenault's words regarding "this amendment" were, "I hate to hijack a bill, but in this case I'm going to have to." CHAIR ROKEBERG said, "Was not ... HB 493 the vehicle that they used and released from committee and I have it in the [House Rules Standing Committee] now? Isn't that part of [Version R]?" MR. RICE answered that's correct. He said HB 13 has been in the House Rules Standing Committee for a year and, as such, he said "some of the dates are, I guess you could say, stale - they're no longer particularly relevant." He said the House Finance Committee, after adding the cost factor study to HB 13, came out with its own bond debt reimbursement bill, HB 493, which is substantially similar - minus the cost factor study. Mr. Rice explained that essentially what is being done is changing HB 13 to update the dates "and to the percentage of HB 493." He stated, "This is a materially similar bill to HB 493." MR. RICE said another substantial change is that the percentages have decreased. He explained, "Previously it was a 70 percent reimbursement for EED-approved schools [and] 60 percent for non- EED-approved schools; that's gone to 60/40, which is exactly the same as HB 493." Mr. Rice continued: So, it's a policy call, but essentially this is a lower bill number on the same topic that had an amendment added to it in [the House Finance Committee]. [The House Finance Committee] decided to push their own bill on the same topic, minus the amendment that the original sponsor objected to. We're trying to rectify that. 9:45:06 AM REPRESENTATIVE HARRIS asked how HB 13 got a title amendment in the House Finance Committee if it was in the House Rules Standing Committee for a year. CHAIR ROKEBERG replied, "That was when it was moved a year ago. That was actually taken in the last session." In response to a follow-up question from Representative Harris, he confirmed that CSHB 13(FIN) has been in the House Rules Standing Committee for a year. He stated, "As I mentioned, my intention here was to observe the lower number regime and that was all." 9:45:52 AM REPRESENTATIVE MCGUIRE moved to adopt the proposed committee substitute (CS) for HB 13, Version 24-LS0062\R, Mischel, 4/11/06, as the working document. There being no objection, Version R was before the committee. 9:46:42 AM REPRESENTATIVE BERKOWITZ moved to adopt Amendment 1, which read as follows [original punctuation provided]: Add a new section: Sec. _____AS14.11.100 (q) is amended to read: (p)The total amount of school construction projects approved for reimbursement by the department under (a)(13) and (a)(14) of this section (1) may not exceed $179,256,000 ($177,256,000) (2) after June 30, 1999, and until October 31, 2006, shall be allocated as follows: (A) $61,925,000 to projects in a municipality with a public school enrollment of 45,000 or more students in fiscal year 2005, as determined under AS 14.17.500; (B) $40,570,000 to projects in a municipality with a public school enrollment of at least 14,500 but less than 20,000 students in fiscal year 2005, as determined under AS 14.17.500; (C) $20,000,000 to projects in a municipality with a public school enrollment of at least 10,000 but less than 14,600 students in fiscal year 2005, as determined under AS 14.17.500; (D) $2,588,000 to projects in a municipality with a public school enrollment of at least 7,500 but less than 10,000 students in fiscal year 2005, as determined under AS 14.17.500; (E) $5,995,000 to projects in a municipality with a public school enrollment of at least 4,000 but less than 6,000 students in fiscal year 2005, as determined under AS 14.17.500; (F) $1,237,000 to projects in a municipality with a public school enrollment of at least 2,400 but less than 2,800 students in fiscal year 2005, as determined under AS 14.17.500; (G) $1,100,000 to projects in a municipality with a public school enrollment of at least 2,200 but less than 2,400 students in fiscal year 2005, as determined under AS 14.17.500; (H) $2,000,000 to projects in a municipality with a public school enrollment of at least 1,501 but less than 1,800 students in fiscal year 2005, as determined under AS 14.17.500; (I) (H) $7,164,000 to projects in a municipality with a public school enrollment of at least 1,300 but less than 1,500 students in fiscal year 2005, as determined under AS 14.17.500; (J) (I) $1,260,000 to projects in a municipality with a public school enrollment of at least 740 but less than 757 students in fiscal year 2005, as determined under AS 14.17.500; (K) (J) $608,000 to projects in a municipality with a public school enrollment of at least 650 but less than 757 students in fiscal year 2005, as determined under AS 14.17.500; (L) (K) $32,000,000 to projects in a municipality with a public school enrollment of at least 500 but less than 600 students in fiscal year 2005, as determined under AS 14.17.500; (M) (L) $2,809,000 to projects in a municipality with a public school enrollment of at least 370 but less than 390 students in fiscal year 2005, as determined under AS 14.17.500; CHAIR ROKEBERG [objected] for discussion purposes. REPRESENTATIVE BERKOWITZ noted that Amendment 1 originates from Representative Joule's office. He stated his understanding that during the hustle and bustle of last session, some mistakes were made and Amendment 1 would correct them. CHAIR ROKEBERG indicated that the oversight had to do with a previous exclusion of an area that was within a student population. REPRESENTATIVE BERKOWITZ stated his understanding that "everyone acknowledges that these numbers should have been what they are, and so we're trying to put them back in." REPRESENTATIVE ROKEBERG asked if there was any further discussion of Amendment 1. He announced that there being no further [objection], Amendment 1 was adopted. [Representative Rokeberg's previous objection to Amendment 1 was treated as withdrawn.] REPRESENTATIVE GATTO expressed his support of Amendment 1. 9:47:45 AM CHAIR ROKEBERG closed public testimony. 9:47:50 AM REPRESENTATIVE MCGUIRE moved to report the proposed committee substitute (CS) for HB 13, Version 24-LS0062\R, Mischel, 4/11/06, as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 13(RLS) was reported from the House Rules Standing Committee.
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