Legislature(1997 - 1998)

04/29/1997 03:12 PM HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                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.                                      
                                                                               

Document Name Date/Time Subjects