SENATE BILL NO. 11                                                             
                                                                               
"An Act relating to state aid for school construction                          
debt; and providing for an effective date."                                    
                                                                               
Co-Chair Therriault provided members with a proposed                           
committee substitute, work draft 0-LS015\D, 5/8/98 (copy on                    
file).                                                                         
                                                                               
MICHAEL MORGAN, FACILITIES SECTION, EDUCATION SUPPORT                          
SERVICES, DEPARTMENT OF EDUCATION stated that he worked with                   
Co-Chair Therriault's staff on the proposed committee                          
substitute.  Mr. Morgan reviewed changes incorporated by the                   
proposed committee substitute.  He noted that page 4, lines                    
2 and 3 were changed to assure that the last of the bonds                      
authorized in 1993 stay intact.  The bond election passed in                   
Fairbanks in 1996 would stay in place.  Subsection 8 on page                   
4 looks at retroactive reimbursement for projects in                           
districts, which passed bonds that were not funded.  He                        
explained that there was no money left under the formula to                    
reimburse some school districts for bonds that were passed.                    
                                                                               
Representative Mulder noted that Ketchikan, Anchorage, and                     
Sitka passed bonds with the stipulation of a 70/30 split                       
with the State.                                                                
                                                                               
Mr. Morgan noted that subsection 9 on page 4 offers 70                         
percent reimbursement for districts that have projects,                        
which bond in the future.                                                      
                                                                               
Page 5, lines 1 and 2 states that an amount due a                              
municipality for reimbursement may not be reduced by the                       
cost to the department to administer the reimbursement                         
program.                                                                       
                                                                               
Page 6, line 28 through page 7, line 1 was added at the                        
request of the Department.  This would allow the same types                    
of projects that are currently available under the grant                       
program in AS 14.11.008 to be offered.  Projects to improve                    
space and allow operating cost reductions would be covered.                    
                                                                               
Section 6, on page 7 provides a maximum authorization of                       
$357,143,000.  This is the total project cost.  The state                      
share would be 70 percent of this number.                                      
                                                                               
Co-Chair Therriault clarified that the municipality would                      
provide the bonding.  The state share would be paid through                    
debt reimbursement general funds.                                              
                                                                               
KAREN REHFELD, DIRECTOR, DIVISION OF ADMINISTRATIVE                            
SERVICES, DEPARTMENT OF EDUCATION noted that the fiscal note                   
includes the repeal of the off-set of the cigarette tax                        
distribution for the debt retirement program, of $2.4                          
million dollars in FY 99.                                                      
                                                                               
Representative Mulder MOVED to ADOPT the proposed committee                    
substitute work draft 0-LS015\D, 5/8/98.                                       
                                                                               
Representative Kohring MOVED to report HCS CSSB 11 (FIN) out                   
of Committee with the accompanying fiscal note.                                
                                                                               
HCS CSSB 11 (FIN) was REPORTED out of Committee with a "do                     
pass" recommendation and with a fiscal impact note by the                      
Department of Education.