HB 350-SCHOOL BOND DEBT REIMBURSEMENT  8:10:14 AM CO-CHAIR STORY announced that the next order of business would be HOUSE BILL NO. 350, "An Act relating to school bond debt reimbursement; and providing for an effective date." 8:10:41 AM CO-CHAIR DRUMMOND, as prime sponsor, stated that HB 350 simply would open up the process for school districts to collaborate with the governing bodies within their communities to create school bonds for presentation to their voters. She added that, according to the Department of Education and Early Development (DEED), the process would take a couple of years before the first set of bond issues would come before voters and the legislature, thus the fiscal note would be indeterminate. There would not be a funding commitment until 2024, when the legislature and the governor could agree to return to the school bond debt reimbursement promises, as made and fulfilled for decades. She urged the committee to move the proposed legislation to the House Finance Committee where future implications could be discussed. 8:12:13 AM REPRESENTATIVE PRAX questioned whether Legislative Legal Services has been consulted on the issue of one community obligating the entire state to pay for school bonds. He expressed the concern that the state would be committing to bonds without a statewide vote. CO-CHAIR DRUMMOND responded that the legislature is mandated to spend a certain amount of funding on rural schools and communities that do not have taxing authority. She asserted that the Alaska State Constitution directs that a system of public schools be maintained, which not only means paying teachers and providing students with transportation, but also maintaining school facilities. She argued that communities with taxing authority contribute to the operation of schools through the foundation formula and also contribute when a school is built, repaired, or remodeled. She directed attention to a spreadsheet from 2015, showing that when the school bond debt moratorium was first put in place there were 21 school districts around the state that had bond issues at various levels of repayment, including all the urban school districts that had passed a significant amount of bond issues. She said that in 2015 Senate Bill 64 [passed during the Twenty-Ninth Alaska State Legislature] ended school bond reimbursement for new bond debt from 2016 until 2020. In 2020 the legislature extended the moratorium to 2025. Since 2015, only Anchorage and the North Slope Burrough have put school bonds before their voters, taking on 100 percent of the responsibility for paying off the bond debts. She stressed that paying off the debt is expensive. She said that before the moratorium the state reimbursed Anchorage an average of 65 percent of school bond debt. She offered the comparison that a property tax before the moratorium of $35 would equal a $100 property tax now. She deduced that the proposed legislation would actually be a tax reduction on local property taxes. She expressed appreciation for the support of the proposed legislation. REPRESENTATIVE PRAX stated that he understands the history of school bond debt in the state; he expressed the belief that the problem would be that [a decision to build a new school would force those who have no voice in the matter to pay for that school]. He questioned whether Legislative Legal Services has been asked for an opinion. He argued that the vote on school bonds should be put to the legislature. 8:17:03 AM REPRESENTATIVE HOPKINS posed the question to Representative Prax on how the proposed legislation would not conform to the Alaska State Constitution, specially. REPRESENTATIVE PRAX explained that, in his opinion, it would be unfair for certain communities to obligate the legislature. He stated that the legislature is supposed to represent the entire state, but the legislature would not get a vote on bond issues. He said, "For four years I've watched bond elections and ... their selling point is somebody else is going to pay for it." REPRESENTATIVE HOPKINS stated that [school bond reimbursement] was in effect for several decades before the 2015 cancellation. He asserted that if school bond debt reimbursement was not legally sound, then it would have been challenged decades ago. He voiced his strong support of HB 350. 8:18:31 AM REPRESENTATIVE CRONK expressed the understanding that any new bonds after 2015 would not be reimbursed, and HB 350 would continue only what was in place before 2015. He requested clarification that any bonds after 2015, up to this point, would not be reimbursed. 8:19:08 AM CO-CHAIR DRUMMOND stated that, prior to 2015, the state was reimbursing school bond debt. She asserted that the proposed legislation would simply return to the procedures in place before 2015. She pointed out that the indeterminate fiscal note for the proposed legislation relays that DEED does not know how many municipalities would qualify under the program and when they may seek voter approval for new school capital debt. The school districts and municipalities would work with DEED to determine projects that would qualify and to determine the reimbursement amount. She stated that a new school building would qualify at a different level of reimbursement than major repairs of school facilities. She stated that DEED maintains a list of priority capital projects that is currently around $200 million. She added that every school district in the state has projects which qualify for reimbursement. She said that capital funds should be applied to those projects "because the state may stop reimbursing, but the kids don't stop trooping through the schools ... and the buildings continue to wear and tear and need repair." She argued that the state is way behind on this. 8:22:02 AM CO-CHAIR STORY observed that once new school bond debt reimbursement is approved, the Matanuska-Susitna Borough would have more new bonds; because of the increase in student enrollment, new buildings would be needed. She expressed the opinion that it is the state's responsibility to help, and this is a way to help. 8:22:50 AM REPRESENTATIVE HOPKINS moved to report HB 350 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, HB 350 was reported out of the House Education Standing Committee.