Legislature(2003 - 2004)
03/24/2004 09:04 AM Senate FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 328
"An Act relating to the national forest income program in the
Department of Community and Economic Development and to the
authority of the department to adopt regulations; making
conforming amendments; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken explained that this bill would provide the
Department of Community and Economic Development with the necessary
authority to adopt regulations required "to implement a federal
program commonly know as National Forest Receipts."
SENATOR BERT STEDMAN, the bill's sponsor, stated that this
legislation would allow the State to align with federal changes to
the National Forest Receipts (NFR) program.
DICK COOSE, Staff to Senator Stedman, read the SB 328 introduction
statement as follows.
Historically, the distribution of funds under the National
Forest Receipts Program was authorized under a 1908 federal
law (16 USC 500) where 25% of the annual income earned from
activities within a national forest was shared with the State
for distribution to boroughs, cities, and regional education
attendance areas located within the national forest. With the
passage of the "Secure Rural Schools and Self-Determination
Act of 2000" (P.L. 106-393), National Forest Receipts payments
to the State for fiscal years 2002 - 2007 will be based upon
the average of the three highest annual payments made to the
State during the "eligibility period" of fiscal years 1987 -
2000.
Payments to the State under the Secure Rural Schools and
Community Self-Determination Act stabilized for the period
2002-2007 rather than fluctuate and significantly dropping due
mainly to the drastic reduction in national forest timber
harvest the past several years. Distribution to the boroughs,
cities, and rural education attendance areas changed only in
that the federal act required that at least 15% but no more
than 20 % of each local entities payment be spent on "special
projects" with the balance to be spent on the traditional
schools and roads categories. The special projects are defined
in the Federal act.
SB 328 allows the Department of Community and Economic
Development to prepare regulations to reflect the distribution
and accounting for the 15-20% special projects distributions
required by the Federal act.
Senator Stedman reminded that it would be beneficial to align the
State with federal forestry statutes, particularly were the NFR
receipt program to continue into the future.
Co-Chair Wilken asked when the current NFR program would expire.
Mr. Coose responded that the current authorization is in effect
through the year 2007.
Co-Chair Wilken asked whether extending the NFR program beyond that
date would require federal re-authorization.
Mr. Coose affirmed that it would.
Co-Chair Green understood therefore that the primary purpose of
this legislation is to conform to federal changes.
Co-Chair Wilken understood that some of the statutory issues being
addressed occurred when the State combined two departments.
Senator Stedman clarified that the legislation is required due to
federal changes.
Mr. Coose explained that one of the federal regulations that
changed was the mandate that 20-percent of the receipts be spent in
support of special projects. The Department must receive
authorization to rewrite regulations in that regard. He also noted
that the Department could further respond to Co-Chair Wilken's
comment regarding the departments' consolidation issue.
Co-Chair Green asked for an example of what would constitute a
special project.
Mr. Coose explained that there are two kinds of special projects:
one being a local government or community project such as the
construction of a community shelter at Ward Lake in Ketchikan or a
project to enhance search and rescue endeavors in Juneau, Sitka,
and Ketchikan as well as some forestry service education projects.
He expressed that the projects are clearly defined in federal law.
Amendment #1: This amendment inserts new language in Section 1,
page two, following line two, as follows.
(m) In this section, "number of children in average daily
membership" means that the number of full-time equivalent
students enrolled and residing in the city school district or
regional education attendance area that receives a share of
the income from the public schools allocation of the fund
created in (b) of this section.
Co-Chair Wilken moved to adopt Amendment #1 and objected for
explanation.
Senator Stedman explained that the forest service receipts are
shared based upon acreage. In addition to the major boroughs such
as the City & Borough of Sitka and the City and Borough of Juneau,
some of the unorganized communities are grouped together and then
the receipts are shared. Currently, however, some communities are
including correspondence study students in their calculations,
which adversely weighs their school district over another.
Amendment #1 "would level the playing field" by eliminating this
disparity.
Senator Dyson asked for further explanation regarding these
correspondence school enrollment calculations.
Senator Stedman responded that one school in particular has
expanded its distance correspondence school enrollment. This has
served to increase their average daily student count. This
amendment would allow only those students residing in and attending
the community school to be factored into the equation. This would
correct this current inequity.
Co-Chair Wilken stated that the intent of the NFR was to assist
individual school districts in the operation of their schools by
utilizing a funding formula based upon "students actually in
seats." As depicted in the Department of Education and Early
Development chart dated March 11, 2004 and titled "Correspondence
History FY99-FY05 Projected" [copy on file] the community of Craig
had eight students enrolled in its correspondence program in FY
2000. 574 were enrolled in FY 2004. The NFR is being used to fund
those 574 correspondence students who do not physically participate
in the school district. The amendment would serve to allocate the
NFR, as intended, based upon those students who are physically
present in the schools.
Senator Stedman stated that the communities that are embedded in
the Tongass National Forest are unable to tax federal forest
service lands, are unable "to expand into other resource based
areas or do economic expansions to keep their population employed."
He voiced appreciation for the efforts being exerted by Alaska's
Congressional delegation in Washington to extend the NFR program.
Senator Dyson asked for confirmation that the City of Craig has a
correspondence school program.
Senator Stedman affirmed that the school has a substantial amount
of correspondence students.
Co-Chair Wilken referred Members to the aforementioned Department
of Education and Early Development correspondence program chart.
Senator Dyson asked whether the students enrolled in Craig's
correspondence program are from Craig, are from elsewhere, or are a
combination of both.
Senator Stedman understood that the students are from around the
State.
Senator Dyson asked for confirmation that the correspondence
program being referenced could include students who live in Craig.
Senator Stedman responded that the program is a combination of
students both within and outside of Craig.
Senator Dyson asked, therefore, whether the amendment would exclude
students who reside in Craig but are enrolled in the correspondence
program from being counted as part of the Craig school enrollment.
Co-Chair Wilken expressed that further information in this regard
must be acquired.
Senator Stedman acknowledged.
Senator Dyson declared that students who live in Craig but who are
enrolled in the correspondence program should be counted as Craig
school students.
Co-Chair Green interjected that the amendment would not exclude in-
district correspondence students as it specifies that those who
enroll and reside in Craig would qualify.
Co-Chair Wilken agreed that the amendment's language does address
Senator Dyson's concern.
Co-Chair Wilken requested that a breakout of the in-district
students be specified in the chart.
Senator Olson asked how the adoption of this amendment would affect
the Craig School District. He opined that the amendment should be
held until that information is available.
Co-Chair Wilken stated that the amendment could be adopted prior to
receipt of that information.
Senator Olson asked whether this amendment would affect charter
schools.
Senator Stedman stated that the answer would be forthcoming.
Co-Chair Green commented that charter school students who are
enrolled and reside in the school district would not be affected by
the adoption of this amendment.
Senator Olson acknowledged.
Co-Chair Green stated that the purpose of NFR is to provide
assistance to local communities within the national forest based
upon residency.
Senator Hoffman asked whether any of the 574 students who are
enrolled in the Craig correspondence program were counted in the
receipt of NFR dollars in any other district.
Senator Stedman understood the question to be whether any of the
students are being "double counted" in that they might be counted
as being enrolled in both a correspondence program and in the
community in which they reside. He assured that further information
in this regard would be forthcoming.
Co-Chair Wilken declared, "that if they are, they shouldn't be." He
suspected that this is not the case.
Senator Hoffman therefore asked how the students who are not
residents of Craig would be accounted for were the amendment
adopted.
Co-Chair Wilken understood that they would get State support
through the State Student Foundation Formula which is a separate
accounting. The NFR is additional funding to the State Foundation
Formula.
Co-Chair Wilken removed his objection to the Amendment.
There being no further objection, Amendment #1 was adopted.
Co-Chair Wilken ordered the bill to be HELD in Committee.
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