Legislature(2009 - 2010)BELTZ 105 (TSBldg)

02/01/2010 08:00 AM EDUCATION

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved SB 237 Out of Committee
Bills Previously Heard/Scheduled
Moved SB 109 Out of Committee
         SB 237-SCHOOL CONSTRUCTION DEBT REIMBURSEMENT                                                                      
CO-CHAIR THOMAS  announced consideration of SB  237, sponsored by                                                               
the Education Committee.                                                                                                        
8:06:33 AM                                                                                                                    
CO-CHAIR  MEYER stated  that  SB 237  is  a housekeeping  measure                                                               
extending   the   sunset   on  the   school   construction   debt                                                               
reimbursement program for three years,  from November 30, 2010 to                                                               
November  30,  2013.  The  state   of  Alaska  school  bond  debt                                                               
reimbursement is open  to any municipality that  has the capacity                                                               
to  bond,  and is  an  important  partnership between  the  local                                                               
communities  and  the  state.  It  allows  the  projects  on  the                                                               
Department of Education and Early  Development's approved list to                                                               
be reimbursed  up to 70  percent. Local governments share  in the                                                               
cost of construction projects which they  might not be able to do                                                               
without state matching funds.                                                                                                   
He said it is  difficult to say for sure how much  it is going to                                                               
cost the state because it  depends upon the local municipalities'                                                               
ability  to get  school bonds  passed, but  a spreadsheet  in the                                                               
committee members'  packets provides a history  of education debt                                                               
reimbursements from fiscal year 1976 through 2009.                                                                              
In  closing, he  observed that  this has  been a  very successful                                                               
program and the sunset has been extended many times.                                                                            
8:09:06 AM                                                                                                                    
SAM  S.  KITO  III,  P.E.,   Technical  Engineer  and  Architect,                                                               
Facilities   Engineer,   Department   of  Education   and   Early                                                               
Development (DEED), Juneau, Alaska,  said he administers approval                                                               
for debt projects under the  grant debt reimbursement program. He                                                               
explained that the program before  the committee provides for two                                                               
levels  of  reimbursement  for school  districts  that  have  the                                                               
ability to  issue bonds. The 70-percent  reimbursement program is                                                               
for  school  districts that  are  building  facilities that  fall                                                               
within the  department's space guidelines.  If a  school district                                                               
has  a  project  that  does   not  meet  the  department's  space                                                               
guidelines, it  can still bond  for the  project at a  60 percent                                                               
reimbursement level.                                                                                                            
He said  the current program  was authorized originally  under HB
13, extended  under HB 373  and has been  going on for  about six                                                               
years.  Under that  program the  DEED has  authorized a  total of                                                               
approximately $300  million worth of  projects at both 70  and 60                                                               
MR. KITO  said the fiscal  note reflects an  anticipated increase                                                               
in  the  debt service.  He  provided  the  members with  a  graph                                                               
detailing the  legislature's payment on  debt service for  all of                                                               
the  debt  programs that  have  been  in  place; the  total  debt                                                               
service  includes the  projects on  that graph  as well  as those                                                               
authorized under HB 13 and HB 373.                                                                                              
8:11:28 AM                                                                                                                    
SENATOR OLSON  asked what  might be brought  up in  opposition to                                                               
this bill.                                                                                                                      
MR. KITO  responded that  the debt program  is only  available to                                                               
districts that have access to  municipal bonding capability. Some                                                               
districts  do  not, such  as  the  Regional Education  Attendance                                                               
Areas (REAA)  and smaller municipal  school districts  that don't                                                               
have  a large  enough  tax base  to take  advantage  of the  debt                                                               
SENATOR OLSON asked  what provisions are being made  for the REAA                                                               
and smaller districts.                                                                                                          
MR. KITO said  he does not know specifically, but  does know that                                                               
the  Department  of  Education and  Early  Development  has  been                                                               
working with the  governor's office to try and  address the issue                                                               
of  school  construction  projects  on  the  department's  school                                                               
construction grant list.                                                                                                        
8:13:11 AM                                                                                                                    
SENATOR  DAVIS moved  to  report  SB 237  out  of committee  with                                                               
individual  recommendations and  attached  fiscal note(s).  There                                                               
being no objection, SB 237 moved from committee.                                                                                

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