SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE March 7, 1997 1:30 p.m. MEMBERS PRESENT Senator Jerry Mackie, Chairman Senator Gary Wilken, Vice Chairman Senator Dave Donley Senator Randy Phillips MEMBERS ABSENT Senator Lyman Hoffman COMMITTEE CALENDAR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 37 "An Act relating to the Education Facilities Financing Authority; and providing for an effective date." -- MOVED SSSB 37 OUT OF COMMITTEE SENATE BILL NO. 111 "An Act making an appropriation to the education facilities fund; making an appropriation from the constitutional budget reserve fund under art. IX, sec. 17(c), Constitution of the State of Alaska; and providing for an effective date." -- MOVED SB 111 OUT OF COMMITTEE HOUSE BILL NO. 35 "An Act extending the termination date of the Alaska regional economic assistance program; and providing for an effective date." -- MOVED HB 35 OUT OF COMMITTEE SENATE BILL NO. 9 "An Act relating to municipal capital project matching grants for a municipality organized under federal law as an Indian reserve; and providing for an effective date." -- MOVED SB 9 OUT OF COMMITTEE SENATE BILL NO. 50 "An Act relating to administrative penalties for violation of public water supply system requirements; amending Alaska Rule of Civil Procedure 82 regarding attorney's fees; and providing for an effective date." -- HELD TO 3/7/97 MEETING PREVIOUS SENATE COMMITTEE ACTION SB 37 - See Community & Regional Affairs minutes dated 3/5/97. SB 111 - See Community & Regional Affairs minutes dated 3/5/97. HB 35 - No previous action to record. SB 9 - No previous action to record. SB 50 - Community & Regional Affairs minutes dated 2/5/97. WITNESS REGISTER Richard S. Cross, Deputy Commissioner Department of Education 801 W. 10th St., Suite 200 Juneau, AK 99801 POSITION STATEMENT: Department recommends SSSB 37 use DOE's capital construction & major maintenance list Representative Alan Austerman State Capitol Juneau, AK 99802-1182 POSITION STATEMENT: Prime Sponsor of HB 35 Paul Fuhs 10652 Porter Lane Juneau, AK 99801 POSITION STATEMENT: Supports HB 35 ACTION NARRATIVE TAPE 97-9, SIDE A Number 001 CHAIRMAN MACKIE called the Senate Community & Regional Affairs Committee meeting to order at 1:30 p.m., noting the presence of all committee members with the exception of Senator Hoffman. He then stated SB 50 (PUBLIC WATER SUPPLY VIOL: ADMIN PENALTIES) would be held over to the Monday, March 10 meeting.  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.  HB 35 EXTEND REG. ECONOMIC ASST PROGRAM  CHAIRMAN MACKIE brought HB 35 before the committee as the next order of business. REPRESENTATIVE ALAN AUSTERMAN , prime sponsor of HB 35, explained the legislation extends the sunset date for the Alaska Regional Development Organizations program (ARDOR), a program that has been in existence since approximately 1988, to the year 2000. There's currently 11 ARDOR's in the state, and these are private, nonprofit corporations that are working on economic development throughout the state. Representative Austerman directed attention to an annual report which shows the program received approximately $605,000 from the state in FY 96, and the total budget of the program amounted to approximately $6,500,000. He also pointed out that the participants in the program pay a fee to be part of the program which amounted to over $3,000,000 in FY 96. He said the investment on the state part is well worth the effort. Number 227 PAUL FUHS of Juneau testifying in support of HB 35, emphasized that the ARDOR's are public, private partnerships. He said at least half of these boards are private sector members that really keep their feet on the ground for a practical program. Mr. Fuhs also pointed out that these ARDOR's were formed when state funds started to go down. The communities used to fight and compete against each other for all the state money, and now that there isn't any, they've really changed their thinking to how they are going to make money and how they are going to build an economy in their region. Number 242 There being no further testimony on HB 35, CHAIRMAN MACKIE asked for the will of the committee. SENATOR WILKEN moved that HB 35 and the attached fiscal note be passed out of committee with individual recommendations. Hearing no objection, it was so ordered.  SB 9 CAP PROJ MATCHING GRANT FOR INDIAN RESERV  CHAIRMAN MACKIE stated he sponsored the same legislation last year, and it passed the House but failed to come up for a vote in the Senate during the final days of the session. Chairman Mackie explained that when the capital matching program was put into place, it had vague language about the Metlakatla Indian Community. The community participated in the program for a number of years, but two years ago when Senator Halford was chairing the Finance Committee, he discovered that the statute definition was not written specific enough to include the Metlakatla Indian Community, so he suggested that it be fixed. SB 9 rectifies the problem by specifically removing Metlakatla from the Unincorporated Capital Matching Grant Program and specifically includes Metlakatla in the statute provisions for the Municipal Capital Matching Grant Program. Chairman Mackie pointed out that language in Section 1 provides that Metlakatla is the only entity in the state that now, or in the future, could qualify under the statute definition. Number 275 SENATOR PHILLIPS asked if the people of the Metlakatla community have to vote on how the grant money is expended. CHAIRMAN MACKIE confirmed that they do. The money goes to the Metlakatla Indian Community Council and they determine how the money will be spent. There being no further testimony on SB 9, CHAIRMAN MACKIE asked for the pleasure of the committee. SENATOR WILKEN moved that SB 9 and the accompanying fiscal notes be passed out of committee with individual recommendations. Hearing no objection, it was so ordered. There being no further business to come before the committee, the meeting adjourned at 1:55 p.m.