Legislature(1997 - 1998)
04/08/1997 06:09 PM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SB 11 SCHOOL DEBT REIMBURSEMENT
SENATOR HALFORD, Sponsor, testified on behalf of the
bill. Also testifying were MICHAEL MORGAN, LARRY WIGET
and CARL ROSE. SENATOR PHILLIPS MOVED Amendment #1.
SENATOR DONLEY objected, then withdrew his objection.
SENATOR PARNELL objected. Amendment #1 was ADOPTED by
a 5 to 1 vote. SENATOR TORGERSON MOVED Amendment #2.
There being no objection, Amendment #2 was ADOPTED. SB
11 was HELD for further consideration.
SENATE BILL NO. 11
"An Act relating to state aid for school construction debt;
and providing for an effective date."
COCHAIR SHARP noted that representatives from the Department
of Education were present to speak to the bill, as was the
bill sponsor. He invited Senator Halford to address the
committee.
SENATOR HALFORD indicated he was available for questions.
SENATOR ADAMS inquired about the retroactivity clause and
its effect on long term financial goals. SENATOR HALFORD
responded that retroactivity applied to reimbursement of up
to seventy percent for bonds sold with prior approval. It
would apply to Mat-Su and Anchorage, and there had been a
question regarding North Slope projects. It was not
intended to apply to anything that had already been
accomplished. It would apply to projects that had been
approved but not yet had bonds sold. If bonds had already
been sold, but departmental approval had not been received,
they could go back to the department to get approval.
SENATOR ADAMS had another concern which was covered in a
draft amendment being copied for submittal to the committee,
according to SENATOR HALFORD. SENATOR ADAMS asked for
comments on a proposal to reduce the percentage from
seventy-five to fifty. SENATOR HALFORD responded that fifty
percent of something was worth more than seventy-five
percent of nothing. SENATOR ADAMS expressed interest in
merging other legislation into the bill so there would be
equity among school districts, particularly for rural
Alaska. SENATOR HALFORD responded briefly about the nature
of the problem.
MICHAEL MORGAN, Facilities Section Manager, Department of
Education, testified in opposition to the legislation based
on two reasons. The first related to continued advocacy for
legislation that addressed statewide needs, whereas SB 11
only addressed needs for communities with the ability to
bond. The other reason was that it ignored the
prioritization process currently used by the department
which the legislature put in statute. In response to a
question from SENATOR ADAMS about a proposal to reduce the
percentage to fifty, MR. MORGAN supported it because it
potentially freed up money for communities not addressed by
the bill. In response to a question from SENATOR PHILLIPS,
he said he was speaking on behalf of the department and not
the entire administration. There were requests for the
department's priority list of projects. MR. MORGAN informed
the committee that the department had been recommending $100
million annually for statewide construction.
SENATOR PARNELL brought up an April 15 ballot in Anchorage
with a list of school projects to be 100 percent funded by
city taxpayers. The retroactivity clause would make some of
the projects available for reimbursement. He questioned the
wisdom of reimbursement versus using the money to further
fund additional projects. SENATOR HALFORD provided
additional explanation.
LARRY WIGET, Director, Government Relations, Anchorage
School District, addressed the committee. He brought up the
issue of willingness of a community concerning overall
indebtedness. By providing retroactive reimbursement at
seventy-five percent, it lowered bonded indebtedness which
would allow communities to take on greater debt in the
future, or increase bond capacity. Research showed there
would be greater likelihood for voters to support bond
measures if they knew the funds were available.
There was additional discussion about departmental approval
of projects. MR. MORGAN offered explanation of timing
differences concerning approval. In response to a question
from SENATOR PARNELL, MR. MORGAN explained there was no cap
and districts could bond for as much as they chose. There
had been a statutory limit in the past. With the cap there
had been a prioritization process, but under the legislation
there would be none, so communities could submit the
projects they chose.
In response to a question from SENATOR ADAMS, MR. MORGAN
stated the fiscal note addressed a portion of the
retroactivity clause but did not include the proposed
amendments which had been discussed. There was additional
discussion about the indeterminate amount of the fiscal
note. SENATOR ADAMS believed the North Slope Borough would
be eligible, but the bill still needed to be made equitable
for rural schools. He reiterated his concern about how it
would impact the long range financial goal.
The presence of Senator Donley was noted.
SENATOR HALFORD informed the committee about the
applicability of the amendment. It was not intended to pay
back prior expenditures and had a narrow window.
COCHAIR SHARP called for further questions or comments.
There being none, SENATOR PHILLIPS MOVED Amendment #1 and
explained that it dropped the reimbursement percentage from
seventy-five percent to fifty percent. SENATOR DONLEY
objected for sponsor comment. SENATOR HALFORD briefly
reiterated his position. SENATOR DONLEY then withdrew his
objection. SENATOR PARNELL objected. A roll call vote was
taken on the MOTION to adopt Amendment #1.
IN FAVOR: Donley, Adams, Phillips, Torgerson, Sharp
OPPOSED: Parnell
Amendment #1 was ADOPTED by a 5 to 1 vote.
SENATOR TORGERSON MOVED Amendment #2. There being no
objection, Amendment #2 was ADOPTED.
A request was made of the department by COCHAIR SHARP to
provide additional information regarding other school
districts with bond issues that would be eligible under the
retroactivity clause. He announced that SB 11 would be HELD
for further consideration.
CARL ROSE, Executive Director, Alaska Association of School
Boards, addressed the committee, commenting that the bill
had been somewhat divisive because it created haves and have
nots. He didn't oppose the legislation, but noted it left
out a large portion of the membership he represented, namely
in the rural areas, because they lacked the capacity to
issue bonds. The main issue was fairness and equity. Brief
discussion followed MR. ROSE'S comments.
The presence of COCHAIR PEARCE was noted.
COCHAIR SHARP stated that SB 11 would be HELD for further
consideration and took up HB 58.
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