SSSB 37 EDUCATION FACILITIES FINANCING AUTHORITY   SB 111 APPROP: EDUCATION FACILITIES FUND  CHAIRMAN MACKIE brought SSSB 37 and SB 111 back before the committee. RICK CROSS , Deputy Commissioner, Department of Education, expressed the department's willingness to work on the difficult problem of providing a steady source of funding for capital construction and major maintenance needs. Mr. Cross noted the original version of the legislation used the Department of Education's capital construction and major maintenance list as the list that would be funded. However, the sponsor substitute uses a modified list, and the the department strongly recommends that SSSB 37 revert to using the department's capital construction and major maintenance list. He said the Bond Reimbursement & Debt Review Committee has worked hard over the last several years to improve the quality of that list and to have it become a list that truly reflects the capital construction and major maintenance needs throughout the entire state. He added that the process is not perfect, but the pledge is there is to continue to improve it. Mr. Cross also pointed out that there is a statutory process for ranking projects, which, he said, is fair to both urban and bush Alaska and it is the one that should be used in determining the order of rank. In conclusion, Mr. Cross said this is part of a solution to the problem of providing a steady source of funding for all of the educational needs, which not only includes capital construction and major maintenance, but includes operation expenses as well. He also expressed the department's willingness to work with the leadership in ensuring that there is a steady source of funding for the operation of the state's school programs that will improve quality for all children. Number 104 CHAIRMAN MACKIE commented that the DOE list doesn't, in a lot of peoples' minds, take care of needs that are in the urban areas as well as the rural areas. So he has made the decision to look to some of the urban school districts and those members that represent those areas to be more involved in a plan that's going to have fair distribution throughout the state. He added that's the only chance that anything like this would even have of being approved. MR. CROSS said he understands what the chairman is saying, but some of the projects in the bill are not approvable under the statute. He also said that when Alaska has had boom years, urban Alaska has been well represented on the list. Number 140 CHAIRMAN MACKIE stated the issue is a huge policy question, and it is something that is going to be decided by the leadership and the Finance Committee if and when anything like this were to be considered. He thinks it is important to have this issue move over to the Health, Education & Social Services Committee where it can be considered along with other education issues. Number 155 SENATOR DONLEY stated he thinks the Department of Education has been very biased against urban school districts and that he completely disagrees with the testimony from the department. He said the department has been very difficult to work with over the past four to six years and has been insensitive to the urban areas. It's so bad that for many years the Anchorage School District hasn't even bothered to put in capital requests. He concluded that maybe the fact the department has less contested requests is because some of the urban districts have given up even trying. SENATOR WILKEN moved SSSB 37 and SB 111 and the attached fiscal notes be passed out of committee with individual recommendations. SENATOR PHILLIPS objected. The roll was taken with the following result: Senators Donley, Wilken and Mackie voted "Yea" and Senator Phillips voted "Nay." The Chairman stated SSSB 37 and SB 111 would move to the next committee of referral with individual recommendations.