HB 310-SCHOOL CONSTRUCTION DEBT REIMBURSEMENT  8:03:22 AM CHAIR SEATON announced that the first order of business would be HOUSE BILL NO. 310, "An Act extending the deadline for authorizing school construction debt reimbursed by the state." 8:04:44 AM KATIE KOESTER, Staff to Representative Paul Seaton, Alaska State Legislature, explained that HB 310 provides the third extension period for the existing program, carrying it through November 30, 2013. She pointed to the flow chart, in the committee packet, as an illustration of the debt bond reimbursement program. She indicated the school house figure on the left of the chart and noted the two versions for bond funding: either the state reimburses 60 percent or 70 percent of the bond with the municipality responsible for the balance. She explained that the program funding qualifications for reimbursement are primarily determined by the space and construction regulations in 4AAC.31.020. She pointed out that the Department of Education and Early Development (EED) make this decision. She described the ballot stage of a bond project, explaining that voter approval allows a municipality to offer bonds, and then moves forward with the building project. 8:09:11 AM CHAIR SEATON clarified that the funding commitment for reimbursement is for the life of the project. MS. KOESTER concurred, and detailed that most bonds are for 20 years. She pointed out that some of these bonds are still active and that the payments are accounted for in the operating section of the state budget; approximately $106 million for this year. 8:10:12 AM REPRESENTATIVE MUNOZ asked for an explanation of the Capital Improvements Projects table, noting that the initial Voter Amounts shows $0. 8:10:50 AM SAM KITO, School Facilities Engineer, Department of Education and Early Development (EED), explained to the committee that the Capital Improvements Projects table is the debt report, and is updated when there are changes to the debt program. He directed attention to the Voter Amount column, and disclosed that a $0 amount indicates bonds that were not approved by voters. He said that the table indicates approval by the EED. In further response to Representative Munoz, he replied that both voter approval and EED approval of a bond is required prior to the release of funds. 8:12:18 AM CHAIR SEATON inquired whether legislative approval for appropriation of bond debt reimbursement is also required. MR. KITO specified that legislative approval is "a follow-on" as a project agreement is written immediately after completion of voter and EED approval. He clarified that a project agreement contains a school district agreement that the state will pay "subject to the appropriation of the legislature," and that EED payment is prorated to the amount appropriated. 8:13:25 AM REPRESENTATIVE BUCH asked for clarification of the Comments column on the table. MR. KITO replied that the projects are approved in groups, so the written comments are a shorthand notation referencing all the projects with the same date in the Department Approval column. 8:14:42 AM REPRESENTATIVE EDGMON asked if the $106 million program operating budget is a record high. MR. KITO said yes, and observed that it had been slowly increasing. 8:15:56 AM REPRESENTATIVE MUNOZ asked if the operating budget includes projects approved by EED, though not yet approved by voters. MR. KITO stipulated that occasionally debt service requests, which were placed in the operating budget considerations, were not submitted by the October 15th deadline. He shared that if EED was aware of a project expenditure that it would include an estimate in the budget request. 8:17:21 AM REPRESENTATIVE EDGMON agreed that the program has been successful and he shared his support. Noting that a number of municipalities have denied bond programs, he asked if there was an election pattern for multiple requests before approval. MR. KITO shared that some of the smaller communities have recently experienced difficulty with bond approval, but he knew of no predictable trend. 8:19:10 AM CHAIR SEATON directed attention to the handout detailing Sec. 14.07.020, and described the guidelines for planning educational facilities. He continued, referring to Sec. 14.11, and observed that the bond program generally dovetails with construction grants. He referred to the two Capital Improvement Projects handouts for the Initial Agency Decision and the Reconsideration List, and asked the committee to review these for recommendations during the next committee hearing. 8:21:44 AM CHAIR SEATON opened public testimony. 8:22:01 AM MARY FRANCIS, Executive Director, Alaska Council of School Administrators (ACSA), said that ACSA was supportive of the continuation of this program. She submitted a position statement of support, for inclusion in the committee packet. 8:23:25 AM DAVE JONES, Assistant Superintendent, Kenai Peninsula Borough School District, testified in support of HB 310, and urged passage of the bond program extension. CHAIR SEATON said that the bill would be held, and public testimony would remain open. [HB 310 was held over.]