10:41:22 AM SENATE BILL NO. 235 "An Act relating to a public school performance incentive program; and providing for an effective date." This was the second hearing for this bill in the Senate Finance Committee. Co-Chair Green noted interest expressed by the Committee to discuss certain aspects of this legislation. 10:41:58 AM Amendment #1: This amendment inserts language to Sec. 14.03.123. Public school performance incentive program., added by Section 2 of the bill on page 3, following line 3 to read as follows. (d) Notwithstanding (a) of this section, the department may not distribute a school performance incentive payment to more than 850 certified employees annually. The limitation of this subsection does not affect the number of noncertified employees and central office personnel to whom the department distributes a school performance incentive payment under (a) and (b) of this section. The department's regulations adopted under this section shall implement the requirements of this subsection. (e) The public school performance incentive program described in this section expires June 30, 2009. The program may be continued or reestablished by the legislature. The Legislative Budget and Audit Committee shall review the program not later than December 31, 2008, and may submit its recommendations to the respective houses of the legislature in the form of a bill that, if enacted into law, would continue or reestablish the program on or before July 1, 2009. Senator Bunde moved for adoption. Senator Bunde explained he supported the basic concept of the legislation. Co-Chair Wilken had made a compelling argument on the benefits of providing incentives to reward good performance of employees in private enterprises. Senator Bunde, however, had concerns about the considerable expense of the proposed program. He therefore suggested establishing it as a pilot program, and one that school districts could choose to participate in rather than providing another State mandate. These changes would reduce the fiscal note cost from $15 million to $5.8 million. 10:43:49 AM Senator Bunde detailed that the pilot program would operate through the year 2008, at which time the Legislative Budget and Audit Committee would submit a recommendation to the legislature to expand or eliminate the program. This would provide an acceptable compromise. Senator Bunde commented that the argument could be made that the funding for this proposed program should instead be appropriated to the education foundation funding formula. However, improvements in education are necessary and this program is a method that could assist in achieving improvements. 10:44:51 AM Senator Hoffman asked how the participating schools would be selected. 10:45:14 AM Senator Bunde responded that the program would be available on a "first come first served" basis in which schools would be accepted in the order their applications were received. 10:45:25 AM There was no objection and the amendment was ADOPTED. 10:45:32 AM Senator Bunde offered a motion to report the bill, as amended, from Committee with individual recommendations and new fiscal note. Without objection, CS SB 235(FIN) was MOVED from Committee with a new fiscal note dated 2/23/06 from the Department of Education and Early Development in the amount of $5,800,000. 10:46:00 AM Co-Chair Green noted the representatives from citigroup would be available to meet with Members individually to provide additional information on the proposal to reissue tobacco settlement revenue bonds.