Legislature(1997 - 1998)
04/29/1997 03:12 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES STANDING COMMITTEE April 29, 1997 3:12 p.m. MEMBERS PRESENT Representative Con Bunde, Chairman Representative Joe Green, Vice Chairman Representative Al Vezey Representative Brian Porter Representative Fred Dyson Representative J. Allen Kemplen MEMBERS ABSENT Representative Tom Brice COMMITTEE CALENDAR CONFIRMATION HEARING: University Board of Regents Annette M. Nelson-Wright - CONFIRMATION ADVANCED * HOUSE BILL NO. 254 "An Act relating to disclosure of public records identifying a participant in the advance college tuition payment program; relating to the composition and assets of the Alaska advance college tuition payment fund; relating to administration of the advance college tuition payment program; relating to advance college tuition payment contracts; and providing for an effective date." - MOVED HB 254 OUT OF COMMITTEE * HOUSE BILL NO. 194 "An Act relating to credits against certain taxes for contributions for educational purposes; and providing for an effective date." - MOVED HB 194 OUT OF COMMITTEE * HOUSE CONCURRENT RESOLUTION NO. 18 Declaring 1997 to be observed as the 80th Anniversary of the University of Alaska Fairbanks and recognizing the vital role played by the University of Alaska Fairbanks. - MOVED HCR 18 OUT OF COMMITTEE HOUSE BILL NO. 155 "An Act relating to hearings before and authorizing fees for the State Commission for Human Rights; and providing for an effective date." - MOVED HB 155 OUT OF COMMITTEE HOUSE BILL NO. 16 "An Act relating to delinquent minors, to the taking of action based on the alleged criminal misconduct of certain minors, to the services to be provided to the victims of criminal misconduct of minors, and to agency records involving minors alleged to be delinquent based on their criminal misconduct; and amending Rule 19 and repealing Rules 6, 7, 11(a), 12(a), and 21(f), Alaska Delinquency Rules." - MOVED HB 16 OUT OF COMMITTEE (* First public hearing) PREVIOUS ACTION BILL: HB 254 SHORT TITLE: UNIVERSITY TUITION PAYMENT PROGRAM SPONSOR(S): REPRESENTATIVE(S) KELLY, Cowdery JRN-DATE JRN-DATE ACTION 04/18/97 1171 (H) READ THE FIRST TIME - REFERRAL(S) 04/18/97 1171 (H) HES 04/24/97 1332 (H) COSPONSOR(S): COWDERY 04/29/97 (H) HES AT 3:00 PM CAPITOL 106 BILL: HB 194 SHORT TITLE: TAX CREDITS: CONTRIBUTIONS TO EDUCATION SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-DATE ACTION 03/14/97 665 (H) READ THE FIRST TIME - REFERRAL(S) 03/14/97 666 (H) HES, STATE AFFAIRS, FINANCE 03/14/97 666 (H) FISCAL NOTE (REV) 03/14/97 666 (H) GOVERNOR'S TRANSMITTAL LETTER 04/29/97 (H) HES AT 3:00 PM CAPITOL 106 BILL: HCR 18 SHORT TITLE: 80 YEAR ANNIV OF UNIV. ALASKA FAIRBANKS SPONSOR(S): REPRESENTATIVE(S) DAVIES,Brice,Nicholia,Kelly JRN-DATE JRN-DATE ACTION 04/17/97 1139 (H) READ THE FIRST TIME - REFERRAL(S) 04/17/97 1139 (H) HES 04/21/97 1224 (H) COSPONSOR(S): KELLY 04/29/97 (H) HES AT 3:00 PM CAPITOL 106 BILL: HB 155 SHORT TITLE: HUMAN RIGHTS COMMISSION FEES & HEARINGS SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR JRN-DATE JRN-DATE ACTION 02/24/97 443 (H) READ THE FIRST TIME - REFERRAL(S) 02/24/97 443 (H) STATES AFFAIRS, HES, FINANCE 02/24/97 444 (H) ZERO FISCAL NOTE (GOV) 02/24/97 444 (H) GOVERNOR'S TRANSMITTAL LETTER 03/11/97 (H) STA AT 8:00 AM CAPITOL 102 03/11/97 (H) MINUTE(STA) 03/13/97 (H) STA AT 8:00 AM CAPITOL 102 03/13/97 (H) MINUTE(STA) 03/20/97 (H) STA AT 8:00 AM CAPITOL 102 03/20/97 (H) MINUTE(STA) 03/22/97 (H) STA AT 10:00 AM CAPITOL 102 03/22/97 (H) MINUTE(STA) 03/25/97 (H) MINUTE(STA) 03/26/97 846 (H) STA RPT CS(STA) 5DP 03/26/97 847 (H) DP: JAMES, ELTON, BERKOWITZ, VEZEY 03/26/97 847 (H) IVAN 03/26/97 847 (H) ZERO FISCAL NOTE (GOV) 2/24/97 03/26/97 847 (H) REFERRED TO HES 04/29/97 (H) HES AT 3:00 PM CAPITOL 106 BILL: HB 16 SHORT TITLE: JUVENILE DELINQUENCY PROCEDURES SPONSOR(S): REPRESENTATIVE(S) KELLY JRN-DATE JRN-DATE ACTION 01/13/97 31 (H) PREFILE RELEASED 1/3/97 01/13/97 31 (H) READ THE FIRST TIME - REFERRAL(S) 01/13/97 31 (H) HES, JUDICIARY 04/25/97 (H) HES AT 3:30 PM CAPITOL 106 04/25/97 (H) MINUTE(HES) 04/29/97 (H) JUD AT 1:00 PM CAPITOL 120 04/29/97 (H) MINUTE(JUD) 04/29/97 (H) HES AT 3:00 PM CAPITOL 106 WITNESS REGISTER ANNETTE M. NELSON-WRIGHT 8539 Forest Lane Juneau, Alaska 99801-9056 Telephone: (907) 790-4456 POSITION STATEMENT: Appointee for the University Board of Regents. WENDY REDMAN, Vice President of University Relations University of Alaska P.O. Box 75500 Fairbanks, Alaska 99775 Telephone: (907) 463-3086 POSITION STATEMENT: Testified on HB 254. JIM LYNCH, Associate Vice President for Finance and Planning University of Alaska P.O. Box 75500 Fairbanks, Alaska 99775 Telephone: (907) 463-3086 POSITION STATEMENT: Testified on HB 254. RICHARD S. CROSS, Deputy Commissioner Office of the Commissioner Department of Education 801 West Tenth Street, Suite 200 Juneau, Alaska 99801-1894 Telephone: (907) 465-2815 POSITION STATEMENT: Testified in support of HB 194. BOB BARTHOLOMEW, Deputy Director Income and Excise Audit Division Department of Revenue P.O. Box 110420 Juneau, Alaska 99811-0420 Telephone: (907) 465-2320 POSITION STATEMENT: Testified on HB 194. LARRY WIGET, Director of Government Relations Anchorage School District 4600 Debarr Street Anchorage, Alaska 99519 Telephone: (907) 269-2255 POSITION STATEMENT: Testified in support of HB 194. REPRESENTATIVE JOHN DAVIES Alaska State Legislature Capitol Building, Room 422 Juneau, Alaska 99801 Telephone: (907) 465-4457 POSITION STATEMENT: Sponsor of HCR 18. PAULA HALEY, Executive Director Human Rights Commission 800 A Street, Number 204 Anchorage, Alaska 99501 Telephone: (907) 276-7474 POSITION STATEMENT: Testified on HB 155. BRUCE CAMPBELL, Legislative Assistant for Representative Kelly Alaska State Legislature Capitol Building, Room 411 Juneau, Alaska 99801 Telephone: (907) 465-2327 POSITION STATEMENT: Testified on HB 16. REPRESENTATIVE PETE KELLY Alaska State Legislature Capitol Building, Room 411 Juneau, Alaska 99801 Telephone: (907) 465-2327 POSITION STATEMENT: Sponsor of HB 16. ACTION NARRATIVE TAPE 97-37, SIDE A Number 0000 CHAIRMAN CON BUNDE called the House Health, Education and Social Services Standing Committee meeting to order at 2:12 p.m. Members present at the call to order were Representatives Bunde, Vezey and Dyson. Representatives Kemplen, Porter and Green arrived at 3:13 p.m. This meeting was teleconferenced to Anchorage and offnet sites. CONFIRMATION HEARING TO THE UNIVERSITY BOARD OF REGENTS CHAIRMAN BUNDE announced that the committee would address the nomination of Annette M. Nelson-Wright to the University of Alaska Board of Regents. ANNETTE M. NELSON-WRIGHT said she was born and raised in Anchorage and attended the University of Alaska Anchorage, where she worked for the Environment and Natural Resources Institute. She has a step-daughter who attends the University of Alaska Fairbanks and she currently attends the University of Alaska Southeast where her husband is an adjunct professor. She was editor of the university newspaper and felt she would do a good job representing the students as the student regent. Number 0170 CHAIRMAN BUNDE stated that it would be useful to have a student regent who has experiences related to the various state universities. Number 0188 REPRESENTATIVE AL VEZEY asked for an explanation of the student position on the Board of Regents. Number 0199 MS. NELSON-WRIGHT explained that she would serve as a liaison between the Board of Regents and the students on all campuses. She would try to address student difficulties and concerns with university policy. She would relay those concerns and try to find solutions for the students. Number 0229 REPRESENTATIVE VEZEY clarified that the Board of Regents is created by statute. He asked if there was one dedicated spot for a student regent. MS. NELSON-WRIGHT answered that he was correct. She explained that in order to be nominated for the position, you have to win an election for this position on your campus. The winner of that election, as well as the winners from the other campuses, are forwarded along with letters and recommendation of support to the Governor's office. She stated that she received letters of support from Representative Hudson, Representative Elton and Senator Duncan. The Governor then chooses a nominee from those names. Number 0319 REPRESENTATIVE VEZEY clarified that she saw the position as being more than just a student liaison. He commented that the university system was going through a lot of changes, some of which are being forced upon the system. He asked her to comment on some of the changes that the university system is going to have to make or address. Number 0355 MS. NELSON-WRIGHT felt the university is going to have to address the fact that there is not the same amount of money as there was in the past. During the boom period, the university system created a large infrastructure which is difficult to support. This has related in a loss of income and a loss of jobs to certain people, but she felt this was an issue that had to be addressed. She did not think that the university could afford a lot of the current expenses and that the university needed to be streamlined. She cited the recent union incident and said the university has to approach this in a level-headed manner. Number 0463 REPRESENTATIVE J. ALLEN KEMPLEN participated in student government at the University of Alaska Anchorage. He expressed a frustration that the student regent has not been a strong spokesperson for the needs of the university and students in an increasingly competitive world. He asked how she would be a strong and vocal individual and if she would seek retrenchment of the university system. Number 0578 MS. NELSON-WRIGHT felt there were large branches which could be combined. The university did a study where they went through and did a program assessment on all of the campuses, it listed suggestions of how to save the university money to the benefit of the university and the students. She understood that not much had come of this study. Number 0612 REPRESENTATIVE KEMPLEN referred to the two-year time frame that she would be appointed to the Board of Regents and asked what she expected to accomplish. Number 0644 MS. NELSON-WRIGHT wanted to see more student involvement with the Board of Regents. She wanted the Board of Regents to be more accessible to the students, as students often see the Board of Regents as a large group of people who aren't student friendly. She wanted to make a difference to an institution which she hoped would prosper and grow and contribute to the state of Alaska. Number 0702 REPRESENTATIVE BRIAN PORTER commended her on her awareness of the fiscal challenges being faced by the university system. Number 0748 CHAIRMAN BUNDE referred to her comments on addressing communication between the students and the regents. He asked if there were more specific needs that she felt needed to be addressed to alleviate student concerns. Number 0780 MS. NELSON-WRIGHT mentioned difficulties her step-daughter has faced at the University of Alaska Fairbanks in getting simple tasks accomplished. She felt the university needs to become more student friendly and she wanted to assist in this process. She wanted to communicate with students from the various campuses via e-mail. Number 0820 CHAIRMAN BUNDE cited the economic fiscal realities which all the state is facing. He asked what would top the list of her priorities for keeping, consolidating or changing what is at the university. Number 0852 MS. NELSON-WRIGHT felt the university has a large administration and that the students could be better served by hiring more professors. There is a certain amount of administration and bureaucracy that is required to carry out certain functions including grants and community service. She thought at times the administration was excessive and that the students could be better served through improving the quality of education. She referred to the benefits she is receiving due to the small class size at the University of Alaska Southeast. She said many students transfer up to the university system to see Alaska, not to receive an education. This was a perception that she hoped to change. Number 0931 REPRESENTATIVE JOE GREEN mentioned her age and asked if she would still be able to communicate effectively with other students just coming out of high school. Number 0980 MS. NELSON-WRIGHT stated that she has a 17-year-old and a 19-year- old step daughter. She believed that she could communicate with this age group. Her step-daughter who attends the University of Alaska Fairbanks feels comfortable coming to her and expressing difficulties that she has faced with the university. She felt that she is approachable on campus and has not had difficulties in her position of campus newspaper editor. Students have approached her with concerns and suggestions for newspaper articles. Number 1042 REPRESENTATIVE GREEN referred to the financial situation of the university system and the broad spectrum of academia that the university handles despite the population size of the state of Alaska. He asked if all the courses and degrees were essential to maintain the university system or could some departments be reduced in order to concentrate on certain subjects. Number 1104 MS. NELSON-WRIGHT felt that diversity was important in order to bring in other students. However, the current financial situation might indicate that the university should concentrate on those areas in which they do very well and those areas which are applicable to Alaska. This might give the university more strength. At a time in which the university has more fiscal ability, then they would be able to branch out into those other areas. She felt the university could do more work in the area of research. Research is an integral part of a university system. Number 1207 REPRESENTATIVE GREEN made a motion to move the nomination of Annette M. Nelson-Wright to the University of Alaska Board of Regents forward to the full House without any recommendations. There being no objection, the nomination of Annette M. Nelson- Wright was advanced. HB 254 - UNIVERSITY TUITION PAYMENT PROGRAM Number 1250 CHAIRMAN BUNDE announced the next item on the agenda was HB 254, "An Act relating to disclosure of public records identifying a participant in the advance college tuition payment program; relating to the composition and assets of the Alaska advance college tuition payment fund; relating to administration of the advance college tuition payment program; relating to advance college tuition payment contracts; and providing for an effective date." WENDY REDMAN, Vice President of University Relations, University of Alaska, said HB 254 is the Alaska advance college tuition payment fund. In 1990, the legislature created this fund to provide an incentive for people to purchase credits at the current rate to be redeemed in the future. At the time, Alaska was one of four states developing this type of program. Today there are close to 25 states which have a similar program and many more states are in the process of developing a program. MS. REDMAN said HB 254 makes some technical changes in the state law. These changes create conformity with federal requirements, allowing the program to remain tax-exempt in regards to the university. The bill also provides additional language on the tax deferral portion of the program for the participants. This would allow expenses other than just tuition to be utilized by the participant. The participant can use this money for books as well as room and board. MS. REDMAN stated that there were some time constraints involved. The university received the federal requirements in February and the changes to the program must be made by August of 1997. Number 1370 CHAIRMAN BUNDE commented that this program locks tuition in at today's rates. He asked, if this program exceeded beyond what was expected, then would it cause a situation in future years where the university system was having to produce outstanding education at discount prices. Number 1400 MS. REDMAN answered that this was a program created for the university system by the legislature. Number 1411 JIM LYNCH, Associate Vice President for Finance and Planning, University of Alaska, testified next via teleconference from Fairbanks. The major problem of the program, since its initiation, has been the tax issues related to it. The Internal Revenue Service (IRS) considered the program to be a taxable entity. The federal (indisc.) really changed that for state prepaid tuition programs as long as certain qualifications are met. This bill ensures that the current program meets all the federal requirements which will ensure that the university is tax-exempt. Number 1446 CHAIRMAN BUNDE clarified that he was testifying that this bill would allow the program to meet all the federal requirements. Number 1454 REPRESENTATIVE GREEN explained that credits can be prepaid. As inflation raises other universities' tuition, more students might stay in the state university system. He understood that if you prepay, based on current tuition, and the benefactor decides to go to some other university, then there is a credit, but it is credit on money rather than on units that they could take. Number 1500 MS. REDMAN answered that this scenario was correct. The participant's invested money would be returned. She explained that this is not a good savings program. If people are not going to go to the University of Alaska, then there are clearly better ways to save money. She suggested that even if you are planning to go to the University of Alaska, you would make more money by other mechanisms. The attractiveness of this program is that it is listed on the Permanent Fund check-off, so it is easy to do. This has created a high participation rate in the program. Program delays were implemented when some of the more astute students realized that they could buy credits one year and then cash them in the next. Currently there is a built-in delay in the program. MS. REDMAN referred to a question by the chair and said there has been difficulty in some states, specifically Michigan, where this type of program has effectively forced the state university to hold their tuition rates down to prevent bankruptcy. Hopefully, the University of Alaska has instituted a program which should level the tuition rate. She stated that the market has been good, allowing the investments to keep up with the rate of tuition. There will always be a financial pressure with this type of program. Number 1582 REPRESENTATIVE PORTER asked if the only way to take advantage of this program was through the permanent fund. Number 1591 MS. REDMAN answered that you can also purchase the credits. REPRESENTATIVE PORTER asked if the university was happy with this scheme. He commented that the last few years were a great investment period, but the future investments are uncertain. Number 1622 MS. REDMAN answered that the university is not unhappy with the program. The university is happy in the sense that this program has provided some good public relations. There is always a danger with this type of program that it could hurt the university financially in the future. Currently the Department of Revenue (DOR) invests this money for the university and as long as a good investment strategy can be continued then everything is fine. Number 1654 REPRESENTATIVE PORTER clarified that whatever the current tuition rate is, the same rate will be available whenever the participant decides to enter the program. He asked if it would be better to put a fail-safe on this program. Number 1674 MR. LYNCH explained that there are some fail-safe clauses in this program. The program can be discontinued if the situation gets to a point where it is intolerable and the increase in the redemption values can be limited. The long term future will depend on the investment markets as to how good the program will be for the participants. Number 1701 REPRESENTATIVE VEZEY asked for information on the financial risk to the university. Number 1706 MR. LYNCH stated that essentially there is a guarantee associated with the program that if you come to the University of Alaska, you will receive a future education based on the price of today's tuition. This program invests that money with the hope that the investment earnings, between now and whenever you attend the university, will be great enough to pay the current tuition. If the investment earnings are not enough, then the university is at risk for the difference of the redemption value of those credits and whatever the current tuition is. Number 1742 REPRESENTATIVE PORTER stated that he could start one of these funds for his grandson, who is a one-year-old, and pay into it every year. In 18 years his grandson could decide to go to the University of Alaska for the cost of a 1997 tuition. Number 1760 MR. LYNCH explained that the university will have invested those monies today and 18 years from now, they expect that the money put in will be great enough to pay the tuition. An actuarial analysis was done about a year ago on this program. This analysis concluded that if you can assume that tuition and inflation will be 7 percent a year and you can invest the money at 7 percent a year, then you can sell those tuition credits at today's price. The program will be viable and you can refund that money in the future. If those assumptions are wrong, then the price of the credits has to be adjusted. Number 1790 CHAIRMAN BUNDE commented that when he began teaching in the university system, a credit hour cost $20, and now an hour is $100. Number 1820 REPRESENTATIVE VEZEY said that it sounds as if the university is treating this program as if it were a trust. When the credits are redeemed, a certain amount is taken out of the trust. If what is in the trust doesn't cover the current rates, then the university loses money. He felt the university was still gaining from what that student paid. The university might not get as much as it might have. He referred to studies which say that the cost of education is rising faster than the rate of inflation in the long term. He did not know if this program was a good idea in terms of total cash flow, but the university does get the money as well as getting the student when it comes time for them to go to college. Number 1862 MR. LYNCH answered that this was correct. Number 1869 CHAIRMAN BUNDE stated that the volume of students was very important. Number 1878 REPRESENTATIVE GREEN noted that you could check off the untaxed portion of the PFD. He asked what would happen if you wanted to put in taxed dollars. Number 1902 MR. LYNCH stated that all money entering this program is taxed. Even though you check off your PFD to be put into this program, that money is still taxed to the original recipient. If the PFD is $1,000, you will pay taxes on that income on the year the dividend is declared. All money coming into the program is after tax dollars. MS. REDMAN explained that he meant taxed to the purchaser. MR. LYNCH referred to the savings account. The increase in value of the earnings is tax deferred until it is used by the student and is taxed to the student. There is no tax deduction at this point. Number 1939 MS. REDMAN stated that there is talk of allowing a tax deduction at the federal level. Number 1946 MS. REDMAN said that even if you check off the PFD to put money into this fund, you will still be taxed on the amount of the dividend. Number 1999 REPRESENTATIVE PORTER made a motion to move HB 254 with individual recommendations and zero fiscal notes. There being no objection, HB 254 moved from the House Health, Education and Social Services Standing Committee. HB 194 - TAX CREDITS: CONTRIBUTIONS TO EDUCATION Number 2016 CHAIRMAN BUNDE announced the next item on the agenda was HB 194, "An Act relating to credits against certain taxes for contributions for educational purposes; and providing for an effective date." Number 2028 RICHARD S. CROSS, Deputy Commissioner, Office of the Commissioner, Department of Education, said this bill expands the opportunity for corporations in Alaska, who pay taxes, to get an additional tax credit for contributions to elementary and secondary schools. There is a current tax credit mechanism for contributions to the University of Alaska system. The Department of Education (DOE) feels that this opportunity will create relationships between corporations and school districts in the state, creating possibilities for students. The department hopes that the corporation's donation will be more than monetary, that it will create an opportunity to establish a working relationship. Educational possibilities ensue when people become involved in a child's education. He was here in support of this bill. Number 2089 CHAIRMAN BUNDE asked if the contributions have to be monetary or if they could be material with a monetary value. Number 2093 MR. CROSS answered that the contributions have to be monetary. Number 2096 REPRESENTATIVE VEZEY commented that this bill was similar to Representative Kott's bill regarding education technology. Number 2116 REPRESENTATIVE FRED DYSON referred to page 8, line 14, the mining business school district contribution tax credit. Number 2154 BOB BARTHOLOMEW, Deputy Director, Income and Excise Audit Division, Department of Revenue, said the state currently has a mining license tax. Mining operations pay on the income of their mining operations in Alaska. Section 21 allows a tax credit for contributions to school districts from anyone who is subject to the mine tax. This bill affects seven state taxes including; corporate income tax, fisheries, mining and oil severance. Number 2191 REPRESENTATIVE PORTER clarified that it was a fifty percent credit across the board. If you gave a dollar, then you would get a 50 cent credit. MR. BARTHOLOMEW explained that the current law for the education credit has two tiers in the education credit. Tier 1 is a 50 percent credit for the first $100,000. Tier 2 is a 100 percent credit for the next $100,000. This legislation proposes a tier 3 which is 50 percent of the next $150,000. The intent is to try to create a private/state match where new dollars other than state money are being put in the pie. MR. BARTHOLOMEW felt the fiscal note explained the DOR position. The advantage of HB 194 is that it brings in new dollars, even though the state will have to contribute. TAPE 97-37, SIDE B Number 0000 LARRY WIGET, Director of Government Relations, Anchorage School District, stated that the district supports extending the tax credit for cash contributions to public schools. He referred to a resolution by the Anchorage Chamber of Commerce. The chamber of commerce, in concept, supports building stronger school/business partnerships as does the Anchorage school district. Currently, there is a strong working relationship with the chamber of commerce in building additional school partnerships. There are approximately 200 school/business partnerships. The district hopes that this opportunity of providing cash contribution/tax credits would not only lead to cash contributions but a more formal engagement between businesses and the school district. MR. WIGET anticipated that no one would be making a cash contribution to be used anywhere the school district chose. He felt the money would be directed for a specific use. He commented that there was no history with this type of legislation and the school district was not sure how much money would ultimately be generated. He hoped other school districts within the state who have access to business, including schools in rural areas, will benefit from this bill. Number 0195 CHAIRMAN BUNDE mentioned that BP (Alaska) Inc. is donating truckloads of computers to school districts throughout Alaska. The first load leaves for Fairbanks tomorrow. This company has purchased $600,000 worth of software that will also be donated. He felt the business community was trying to provide support for the public schools. If the state could encourage and support businesses through some tax credits, then the state should do it. Number 0268 MR. WIGET said the Anchorage School District was appreciative of businesses within the Anchorage community who have stepped forward with their resources and made an investment. He mentioned that the Alaska Railroad takes the students on a train ride as well as having their personnel going into the schools to read to the students. He wanted the students to have a greater appreciation and understanding of what it is to be a member of the business community. Hopefully the students will aspire to careers and job opportunities which exist in fields other than those that they would normally be exposed to by their family or through the limited orientation that they would get in the classroom. Number 0332 REPRESENTATIVE GREEN referred to the fact that tier 1 and tier 2 encompass a lot of money and asked what currently happened with such donations. Number 0350 MR. WIGET believed that these donations only involved the university system. Number 0364 CHAIRMAN BUNDE explained that HB 194 would expand the program to kindergarten through twelfth grade. Number 0400 REPRESENTATIVE VEZEY referred to page 4, line 5, Section 7, and asked for an explanation of 26 U.S.C. 170. Number 0425 MR. BARTHOLOMEW answered that this language states that if you are going to make a contribution to a school and get a tax credit for it, you can't also take a business deduction. In tax language this is referred to as a double dip; taking both a deduction and a credit. The business would have to decide up front whether they wanted the tax credit, usually much more valuable, or a straight business deduction. The language in HB 194 would limit businesses to one or the other. Number 0460 REPRESENTATIVE VEZEY asked what authority was involved to tell anyone what their relationship with the IRS could be. Number 0467 MR. BARTHOLOMEW explained that this language would only be as it relates to the state tax. When the state sets up the corporate income tax, the state mirrors the federal IRS. It would still be a federal business deduction, but when the state calculates the tax, the state would make the business chose between the deduction or the credit. This language only affects the calculation of the state corporate income tax, not the federal tax. Number 0518 REPRESENTATIVE DYSON made a motion to move HB 194 with individual recommendations and attached fiscal notes. There being no objection, HB 194 was moved from the House Health, Education and Social Services Standing Committee. HCR 18 - 80 YEAR ANNIV OF UNIV. ALASKA FAIRBANKS Number 0551 CHAIRMAN BUNDE announced the next item on the agenda was HCR 18, Declaring 1997 to be observed as the 80th Anniversary of the University of Alaska Fairbanks and recognizing the vital role played by the University of Alaska Fairbanks. Number 0577 REPRESENTATIVE JOHN DAVIES, Sponsor of HCR 18, said the resolution asks the legislature to recognize the 80th anniversary of the University of Alaska Fairbanks as it is important to celebrate good things. The legislature spends a lot of their time focused on problems and how to resolve them, but every once in a while there needs to be recognition for those things which are going well. He felt the University of Alaska Fairbanks has done a lot of good things in its 80 years of existence. REPRESENTATIVE DAVIES also thought the resolution would assure university students, faculty and staff that the legislature continues to value the mission of higher education. While it might be necessary to reduce budgets, there shouldn't be the perception that there is a reduced appreciation of higher education. REPRESENTATIVE DAVIES stated that this resolution recalls the actions that the territorial legislature took 80 years ago, on May 3, 1917, in establishing the university. He felt the legislature should honor the efforts of many Alaskans who have contributed to the creation of a strong university and that we recognize the contributions that the university has made to Alaska. He cited various accomplishments; educating teachers and leaders of Alaska, developing new markets in resource areas such as fisheries, finding new uses for Sitka spruce trees, allowing safe commerce in the hub area of the state around Anchorage in the presence of volcanos and developing engineering solutions to deal with permafrost and other cold regions challenges. This is the only northern university in the United States that has meet that unique challenge. Number 0745 REPRESENTATIVE GREEN made a motion to move HCR 18 with individual recommendations. There being no objection, HCR 18 moved from the House Health, Education and Social Services Standing Committee. HB 155 - HUMAN RIGHTS COMMISSION FEES & HEARINGS Number 0757 CHAIRMAN BUNDE announced the next item on the agenda was HB 155, "An Act relating to hearings before and authorizing fees for the State Commission for Human Rights; and providing for an effective date." Number 0808 PAULA HALEY, Executive Director, Human Rights Commission, testified next via teleconference from Anchorage. She said HB 155 is part of a comprehensive approach to increased demand for the agency's services in the wake of diminishing resources. The commissioner and staff have determined that seeking additional resources in these times is not enough and that an effort has to be made to meet the demands. In addition to budget requests, the commission has revised their internal procedures, amended their regulations last spring, are seeking to re-amend their regulations this spring and are proposing this legislation. All these things are being done in the hopes that the commission can become more effective and cost efficient in the business of enforcing civil rights. MS. HALEY said that HB 155 allows the commission to charge fees for educational services and allows it to hold its hearings out of the commission office, either in person or through teleconference participation. It would also allow meetings to be recorded rather than having them transcribed. The savings and fees which might be generated would be used for investigator overtime. The Department of Law determined that investigators were eligible for overtime and this money is currently not budgeted. The savings could allow some temporary staff to assist in the case processing. MS. HALEY explained that HB 155 is part of the commission's efforts to grapple with investigative delays resulting from the increased demand on services and to save money and streamline the process. Number 0908 CHAIRMAN BUNDE asked if there would be problems in the legal community with the change from transcription to recording. Number 0925 MS. HALEY stated that transcription is very expensive. A transcript can make things easier as people can read more quickly than they can listen. A court reporter can cost anywhere from $800 to $1,000 a day. She has not heard of any concerns about cutting the transcription. The commission would not be proceeding to criminal charges because their process is an administrative civil process. Number 0983 CHAIRMAN BUNDE described the possible inaccuracies of transcription and cited the tape of the Constitutional Convention. Number 1009 CHAIRMAN BUNDE commended the attempt to reduce travel costs. Number 1026 REPRESENTATIVE PORTER made a motion to move HB 155 with individual recommendations and zero fiscal note. There being no objection, HB 155 was moved from the House Health, Education and Social Services Standing Committee. REPRESENTATIVE DYSON stated that he had served on the Human Rights Commission up until the end of 1996. He was part of the decision- making process which brought this legislation forward, and it was his idea to include subsection 4 on page 1. CHAIRMAN BUNDE encouraged him to declare his conflict when this bill came to the floor. HB 16 - JUVENILE DELINQUENCY PROCEDURES Number 1093 CHAIRMAN BUNDE announced the next item on the agenda was HB 16, "An Act relating to delinquent minors, to the taking of action based on the alleged criminal misconduct of certain minors, to the services to be provided to the victims of criminal misconduct of minors, and to agency records involving minors alleged to be delinquent based on their criminal misconduct; and amending Rule 19 and repealing Rules 6, 7, 11(a), 12(a), and 21(f), Alaska Delinquency Rules." He referred to the seven fiscal notes. Number 1107 BRUCE CAMPBELL, Legislative Assistant for Representative Kelly, referred to the fiscal notes. He said the Department of Law is estimating that approximately 20 cases might occur through the dual sentencing provision. The Alaska Court System has used that number to create their fiscal note comprised of what it would cost the court system to handle 20 additional cases. The Department of Corrections would be receiving children from dual sentencing. These juveniles would be coming out of youth corrections and if they receive an adult sentence, they would then be forwarded to adult corrections which would cause a future fiscal note. If the Department of Law has additional work, then the Office of Public Advocacy and the Public Defender Agency would be involved in some fashion. REPRESENTATIVE PETE KELLY, sponsor of HB 16, stated that his first reaction to the fiscal note, which predicted the number of cases, was that it seemed reasonable. Number 1238 REPRESENTATIVE PORTER did not have any reason to believe that the estimate of cases is not reasonable, but he questioned the deduction which would result if the function occurred somewhere else. He stated that the juvenile procedure, in some instances, can be just as expensive as the adult procedure. He felt there was some room for adjustment. Number 1270 CHAIRMAN BUNDE described dual sentencing. There is a juvenile sentence, with a kicker of an adult sentence if the juvenile sentence does not encourage the juvenile to behave more like a juvenile instead of an adult. Number 1318 REPRESENTATIVE PORTER mentioned that HB 16 could be viewed as giving juveniles, who are in the position of making a significant decision about their life, some additional impetus to make the right kind of decision. This could ultimately cut down on the amount of cases seen by the Division of Family and Youth Services and the Alaska Court System. This bill creates a reality. It says that the state will allow you to be in the juvenile system, but if you don't play by the rules then you will go to the adult system. He has seen some success with waiving kids to adult court and he felt that HB 16 would also be effective. Number 1371 REPRESENTATIVE KELLY felt HB 16 was the perfect augment to the juvenile waiver bill. There will be fewer cases where trouble will arise from having an artificial line drawn at a specific age. A line is drawn at the age of 13, but it is still far better than just having an adult waiver without a companion bill. Number 1395 REPRESENTATIVE PORTER made a motion to move HB 16 with individual recommendations and the attached fiscal notes. There being no objection, HB 16 was moved from the House Health, Education and Social Services Standing Committee. REPRESENTATIVE KELLY said he would pursue the fiscal notes in the House Finance Committee. Number 1422 ADJOURNMENT There being no further business to conduct, CHAIRMAN BUNDE adjourned the meeting of the House Health, Education and Social Services Standing Committee at 4:25 p.m.