CHAIRWOMAN DRUE PEARCE  called the Senate Rules Committee meeting to                                                          
order at 1:45 p.m.   All members were present.                                                                                  
                                                                                                                                
CHAIRWOMAN   PEARCE  announced   that  a   Senate  Rules   Committee                                                            
substitute  (Version O) was prepared  for SB 174-EDUCATION  FUNDING.                                                        
                                                                                                                                
SENATOR  COWDERY  moved  to  adopt  CSSB  174(RLS)  as  the  working                                                            
document  of the committee.   There being  no objection, the  motion                                                            
carried.                                                                                                                        
                                                                                                                                
CHAIRWOMAN PEARCE informed  committee members that CSSB 174(RLS) has                                                            
a fiscal  note in the amount  of $18,385,300.   Section 1  increases                                                            
the base allocation  amount by $70.  Section 2 changes  the required                                                            
local  contribution  by limiting  the  annual increase  in  assessed                                                            
valuation  to 50  percent of  the total  increased  amount over  the                                                            
prior year.  Section 3  changes the facilities constituting a school                                                            
definition  from 750 down  to 425, which  deals with the  Petersburg                                                            
and Wrangell difficulty.   This version does not include a change to                                                            
the North Slope Borough.                                                                                                        
                                                                                                                                
There  being no questions  or testimony,  SENATOR  COWDERY moved  to                                                            
calendar CSSB 174(RLS) with its accompanying fiscal note.                                                                       
                                                                                                                                
SENATOR PHILLIPS objected.                                                                                                      
                                                                                                                                
The motion to calendar  CSSB 174(RLS) carried with Senators Cowdery,                                                            
Therriault,  Ellis and  Pearce voting  "yea,"  and Senator  Phillips                                                            
voting "nay."