Legislature(2017 - 2018)BUTROVICH 205

03/24/2017 08:00 AM EDUCATION

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                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE EDUCATION STANDING COMMITTEE                                                                             
                         March 24, 2017                                                                                         
                           8:01 a.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Shelley Hughes, Chair                                                                                                   
Senator Gary Stevens                                                                                                            
Senator John Coghill                                                                                                            
Senator Tom Begich                                                                                                              
MEMBERS ABSENT                                                                                                                
Senator Cathy Giessel                                                                                                           
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 87                                                                                                              
"An Act relating to energy  efficiency standards and standardized                                                               
options  for   building  and  equipment  components   for  school                                                               
construction   and   major   maintenance;  relating   to   school                                                               
construction  and   major  maintenance   grants  and   bond  debt                                                               
reimbursement;   establishing    a   working   group    to   make                                                               
recommendations  relating to  energy efficiency  and standardized                                                               
components in schools; and providing for an effective date."                                                                    
     - HEARD & HELD                                                                                                             
SENATE BILL NO. 78                                                                                                              
"An Act  creating the education  endowment fund and  the dividend                                                               
lottery fund;  authorizing contributions from the  permanent fund                                                               
dividend  to the  dividend lottery  fund;  relating to  transfers                                                               
from the dividend lottery fund  and the education endowment fund;                                                               
relating to  the definition of  'gambling'; and providing  for an                                                               
effective date."                                                                                                                
     - HEARD & HELD                                                                                                             
SENATE BILL NO. 96                                                                                                              
"An  Act relating  to education;  relating  to school  districts;                                                               
relating  to  course  credit  for  students;  relating  to  group                                                               
insurance,  self-insurance,  and other  cooperative  arrangements                                                               
between    school    districts    and    businesses,    nonprofit                                                               
organizations, and  government agencies; relating to  funding for                                                               
school districts;  relating to  school operating  funds; relating                                                               
to competency examinations for  teacher certificates; relating to                                                               
the Professional  Teaching Practices Commission; relating  to the                                                               
duties  and  powers of  the  Department  of Education  and  Early                                                               
Development  and   the  commissioner   of  education   and  early                                                               
development;   relating  to   a  virtual   education  consortium;                                                               
relating to  the minimum  wage for bus  drivers; relating  to the                                                               
investment,  appropriation,  and  administration  of  the  public                                                               
school trust fund; and providing for an effective date."                                                                        
     - BILL HEARING CANCELED                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB 87                                                                                                                   
SHORT TITLE: SCHOOL CONSTRUCTION ENERGY EFFICIENCY STD                                                                          
SPONSOR(s): SENATOR(s) MACKINNON                                                                                                
03/10/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/10/17       (S)       EDC, FIN                                                                                               
03/22/17       (S)       EDC AT 8:00 AM BUTROVICH 205                                                                           
03/22/17       (S)       Heard & Held                                                                                           
03/22/17       (S)       MINUTE(EDC)                                                                                            
BILL: SB 78                                                                                                                   
SHORT TITLE: PERM FUND DIVIDEND CONTRIBUTIONS/LOTTERY                                                                           
SPONSOR(s): SENATOR(s) BISHOP                                                                                                   
03/06/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/06/17       (S)       EDC, FIN                                                                                               
03/24/17       (S)       EDC AT 8:00 AM BUTROVICH 205                                                                           
WITNESS REGISTER                                                                                                              
BRITTANY HUTCHISON, Staff                                                                                                       
Senator Anna MacKinnon                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Reviewed SB 87 on behalf of the sponsor.                                                                  
JOHN ANDERSON, Director                                                                                                         
Research and Rural Development                                                                                                  
Alaska Housing Finance Corporation (AHFC)                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Answered questions related to SB 87.                                                                      
CHRISTOPHER HODGIN, Engineer                                                                                                    
Statewide Public Facilities                                                                                                     
Department of Transportation and Public Facilities (DOTPF)                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Answered questions related to SB 87.                                                                      
JACK HEBERT, CEO                                                                                                                
Cold Climate Housing Research Center                                                                                            
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Answered questions related to SB 87.                                                                      
KATIE CONWAY, Manager                                                                                                           
Outreach and Efficiency, Government Relations                                                                                   
Alaska Energy Authority (AEA)                                                                                                   
Department of Commerce, Community and Economic Development                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Answered questions related to SB 87.                                                                      
SENATOR CLICK BISHOP                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Sponsor of SB 78.                                                                                         
PETE FELLMAN, Staff                                                                                                             
Senator Click Bishop                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Explained SB 78 on behalf of the sponsor.                                                                 
ACTION NARRATIVE                                                                                                              
8:01:51 AM                                                                                                                    
CHAIR  SHELLEY  HUGHES  called   the  Senate  Education  Standing                                                             
Committee meeting  to order at 8:01  a.m. Present at the  call to                                                               
order were Senators Begich, Coghill, Stevens, and Chair Hughes.                                                                 
        SB 87-SCHOOL CONSTRUCTION ENERGY EFFICIENCY STD                                                                     
8:02:19 AM                                                                                                                    
CHAIR HUGHES announced  the consideration of SB 87.  She noted it                                                               
is the second hearing of the  bill. She listed those available to                                                               
answer questions.                                                                                                               
BRITTANY HUTCHISON,  Staff, Senator Anna MacKinnon,  Alaska State                                                               
Legislature,  reviewed  SB  87  on behalf  of  the  sponsor.  She                                                               
summarized the purpose and goal of  SB 87. She said the bill will                                                               
increase energy and operating efficiency  in school buildings. It                                                               
will help make schools more  affordable, maintainable, and longer                                                               
lasting.  School districts  in  Alaska  need long-term  operating                                                               
cost savings,  and energy and  operating costs are eating  up the                                                               
base student  allocation. As stewards of  public funds, efficient                                                               
use of money and energy is  essential to public policy. The state                                                               
needs  to  maintain  and  control costs  for  all  public  school                                                               
facilities  and extend  the lives  of those  facilities by  being                                                               
more  energy efficient,  by using  standardized component  parts,                                                               
and  by placing  prioritization on  classroom infrastructure  and                                                               
functional design.                                                                                                              
8:05:21 AM                                                                                                                    
SENATOR  STEVENS asked  who makes  up the  group that  is putting                                                               
this together.  He voiced concern about  co-locating schools with                                                               
other state facilities.                                                                                                         
MS.  HUTCHISON replied  that Section  10 lists  the nine  working                                                               
group members:  one from DEED, one  from AHFC, one from  AEA, one                                                               
from  the  Cold Climate  Research  Center,  one from  DOTPF,  one                                                               
superintendent  from a  rural  school district  and  one from  an                                                               
urban  school district,  and two  members  from the  construction                                                               
She  addressed Senator  Stevens' concern  about co-location.  The                                                               
bill  provides  that  all  agencies  or  organization  must  have                                                               
background checks  and separate entrances. She  provided examples                                                               
of  who  might co-locate  in  a  school,  such as  health  aides,                                                               
firefighters, librarians.                                                                                                       
8:07:05 AM                                                                                                                    
SENATOR STEVENS had  concerns about energy costs  in rural areas.                                                               
He  said  that some  members  in  the  working group  would  have                                                               
experience with rural energy costs.                                                                                             
MS. HUTCHISON agreed.                                                                                                           
8:07:45 AM                                                                                                                    
CHAIR HUGHES asked if two  members from the construction industry                                                               
would be enough.  She suggested having one member  be from either                                                               
AEA or Cold Climate Research.                                                                                                   
MS. HUTCHISON  responded that the  sponsor has  considered having                                                               
architects  or  designers  in  the  group  and  she  is  open  to                                                               
suggestions. She would like to keep it to 9 to 11 members.                                                                      
SENATOR  BEGICH   suggested  having   two  alternates   from  the                                                               
construction industry.                                                                                                          
MS.  HUTCHISON said  reiterated  that  the goal  is  to keep  the                                                               
working group manageable with 9 to 11 members.                                                                                  
8:09:37 AM                                                                                                                    
SENATOR  STEVENS  asked  if  the   working  group  has  a  higher                                                               
authority than the local community has.                                                                                         
MS. HUTCHISON said  the group does not have  authority over local                                                               
control.  She added  that  a  school district  can  go above  and                                                               
beyond the recommendations for cost  per square footage, but must                                                               
pay for it. The idea is to follow certain standards.                                                                            
8:10:58 AM                                                                                                                    
CHAIR HUGHES  asked whether an  existing school would  go through                                                               
the same process to convert to a multiple-purpose facility.                                                                     
MS. HUTCHISON said that provision is included in the plan.                                                                      
CHAIR  HUGHES  questioned  the   clarity  of  "major  maintenance                                                               
project" on page 5, line 31.                                                                                                    
MS. HUTCHISON said she did not have the answer.                                                                                 
8:12:02 AM                                                                                                                    
SENATOR   BEGICH  said   that  "major   maintenance"  in   school                                                               
construction is defined in statute.                                                                                             
CHAIR HUGHES  wondered if  new out  buildings on  school property                                                               
would follow the same process.                                                                                                  
MS. HUTCHISON said they had not considered it.                                                                                  
CHAIR HUGHES suggested it would work, as the bill is written.                                                                   
8:13:15 AM                                                                                                                    
SENATOR BEGICH  asked Ms.  Hutchison if she  would be  looking at                                                               
these suggestions soon.                                                                                                         
MS. HUTCHISON  said the sponsor  does have a list  of suggestions                                                               
and  has   heard  from   multiple  stakeholders,   including  the                                                               
Department of  Law. She thought  they would  have a plan  by 5:00                                                               
8:14:17 AM                                                                                                                    
SENATOR COGHILL saw  that on page 10, lines 26  and 27, after the                                                               
working group  is done they  report to the legislature.  He asked                                                               
if that is after regulations have gone into effect.                                                                             
MS.  HUTCHISON explained  the timeline.  Once SB  87 passes,  the                                                               
working group  would have 18 months  to come up with  a report to                                                               
the legislature.  Immediately after, the department  would have 6                                                               
months  to  write regulations.  The  sponsor  is considering  the                                                               
legislature's role as it relates to regulations.                                                                                
SENATOR COGHILL suggested  that DEED, as a member  of the working                                                               
group, may want  to be involved all through the  process in order                                                               
to provide a fiscal note.                                                                                                       
8:15:46 AM                                                                                                                    
MS. HUTCHISON  said there  is a DEED  fiscal note  attached which                                                               
requests two full-time employees and one temporary employee.                                                                    
SENATOR COGHILL liked the timeline  and the working group makeup.                                                               
He also  said he can  accept the  18-month deadline. He  asked if                                                               
the working group has a definition for climate regions.                                                                         
8:17:30 AM                                                                                                                    
MS. HUTCHISON replied that there is  a list of four climate zones                                                               
in Alaska. AHFC can address the zones.                                                                                          
CHAIR HUGHES  pointed out  that there  are cost  variables within                                                               
those zones.                                                                                                                    
SENATOR  COGHILL agreed  that economic  and transportation  costs                                                               
also vary.                                                                                                                      
MS. HUTCHISON  noted that the  bill establishes the  maximum cost                                                               
per  square  foot, which  is  subject  to  change based  on  many                                                               
CHAIR  HUGHES asked  if  AHFC is  the best  one  to address  that                                                               
MS. HUTCHISON said yes.                                                                                                         
8:19:02 AM                                                                                                                    
JOHN ANDERSON,  Director, Research and Rural  Development, Alaska                                                               
Housing  Finance Corporation  (AHFC), answered  questions related                                                               
to SB 87. He responded first  to the question about climate zones                                                               
by  relating  AHFC's  building   energy  efficient  standards  in                                                               
reference  to residential  housing. They  apply the  same climate                                                               
zone  standards   through  all  programs,   including  commercial                                                               
application  or  public  facilities.   Their  process  follows  a                                                               
national  model the  Department of  Energy and  the Environmental                                                               
Protection  Agency put  out. AHFC  uses modeling  software called                                                               
AkWarm to determine  climate regions using the  number of heating                                                               
degree  days. It  is specific  to the  energy characteristics  in                                                               
Alaska's   regions   and   includes   Climate   Zone   9.   Other                                                               
characteristics  such as  transportation costs  can be  addressed                                                               
through the working group.                                                                                                      
8:21:01 AM                                                                                                                    
SENATOR BEGICH  stated that  the bill is  written to  address the                                                               
climate  zones. He  suggested having  other  language to  address                                                               
other factors,  such as cost  and transportation factors,  to get                                                               
to  a square-footage  cost. He  asked  if AHFC  sets those  costs                                                               
based only on climate data.                                                                                                     
MR. ANDERSON said yes.                                                                                                          
8:21:51 AM                                                                                                                    
CHAIR HUGHES  inquired about  the 30-year life  of a  building on                                                               
page 10.  She wondered  if that  length could  be extended  to 50                                                               
MS. HUTCHISON  recommended asking  Cold Climate  Housing Research                                                               
Center, AHFC, or DOTPF.                                                                                                         
CHAIR HUGHES asked Mr. Hodgin to answer.                                                                                        
8:22:55 AM                                                                                                                    
CHRISTOPHER  HODGIN,   Engineer,  Statewide   Public  Facilities,                                                               
Department  of  Transportation  and  Public  Facilities  (DOTPF),                                                               
answered questions related  to SB 87. He addressed the  life of a                                                               
building.  If  it  is  extended past  30  years,  increased  cost                                                               
factors must be considered.  Regarding energy efficient upgrades,                                                               
some of the technologies have less than a 30-year life.                                                                         
8:23:51 AM                                                                                                                    
JACK HEBERT, CEO, Cold Climate  Housing Research Center, answered                                                               
questions related to SB 87. He  said the durability of a building                                                               
is  based  on a  number  of  factors  related to  the  mechanical                                                               
systems.  However,  the  structure  itself is  dependent  on  the                                                               
building science  incorporated in  it. There is  no reason  why a                                                               
building cannot be designed to last 50 to 75 years.                                                                             
CHAIR HUGHES asked how much that might affect the cost.                                                                         
MR. HEBERT opined that it does  not necessarily have to cost more                                                               
with proper selection of materials.                                                                                             
8:25:25 AM                                                                                                                    
SENATOR BEGICH asked  about page 6, Section 8, where  it says the                                                               
Commissioner  of  DEED  shall consult  with  AEA.  He  questioned                                                               
whether DOTPF  could also be  consulted and  if that was  ok with                                                               
8:26:00 AM                                                                                                                    
KATIE  CONWAY,  Manager,   Government  Relations,  Alaska  Energy                                                               
Authority (AEA),  Department of Commerce, Community  and Economic                                                               
Development  (DCCED), answered  questions related  to SB  87. She                                                               
suggested  that  while   AEA  could  manage  this   task  if  the                                                               
legislature requests it,  DOTPF could also. She  thought it would                                                               
make sense to ask DOTPF.                                                                                                        
8:26:52 AM                                                                                                                    
MR. HODGIN agreed that DOTPF could assist with the task.                                                                        
SENATOR BEGICH said it didn't matter  to him who does it; the one                                                               
best suited to is fine with him.                                                                                                
CHAIR HUGHES offered  a question directed to  DEED regarding when                                                               
the  reports  mentioned on  page  8  are  required. It  says  the                                                               
maintenance and support team will  report and the school district                                                               
will also  report. She asked if  one or two reports  are required                                                               
and  what is  to be  reported.  She requested  that DEED  address                                                               
those issues at a later meeting.                                                                                                
CHAIR HUGHES held SB 87 in committee.                                                                                           
         SB 78-PERM FUND DIVIDEND CONTRIBUTIONS/LOTTERY                                                                     
8:28:59 AM                                                                                                                    
CHAIR HUGHES announced the considerations of SB 78.                                                                             
SENATOR  CLICK BISHOP,  Alaska State  Legislature, sponsor  of SB
78.  He introduced  SB  78 by  saying  that the  bill  sets up  a                                                               
foundation  for an  innovative way  to  raise funding  to help  a                                                               
great cause  - funding the  future for Alaska's greatest  asset -                                                               
its  children. He  said he  has long  been in  favor of  economic                                                               
diversification  and  using  renewable  resources,  such  as  the                                                               
earning of the permanent fund.                                                                                                  
He  shared  a  personal  story  about an  education  tax  on  his                                                               
paycheck when  he was first  starting to  work. In the  1980s the                                                               
education head tax  was struck down. He said he  has been seeking                                                               
support for a way to fund education for the last four years.                                                                    
He called his  bill a voluntary limited income tax.  He said over                                                               
60  percent  of  his  district supports  education.  He  gave  an                                                               
example  of a  constituent  who  returned his  PFD  the last  two                                                               
SENATOR BISHOP said  the purpose of the bill is  to look way into                                                               
the  future, post  oil, to  help partially  fund education  using                                                               
Alaska's  renewal  resource,  the  power of  its  permanent  fund                                                               
8:33:17 AM                                                                                                                    
SENATOR STEVENS asked if he will use Pick, Click, Give.                                                                         
SENATOR BISHOP said yes.                                                                                                        
PETE  FELLMAN,   Staff,  Senator   Click  Bishop,   Alaska  State                                                               
Legislature,  explained  SB  78  on behalf  of  the  sponsor.  He                                                               
explained  that SB  78  provides that  everyone  could donate  to                                                               
education   in   $100   increments  on   their   permanent   fund                                                               
application. He  said that half of  the money goes to  the public                                                               
education fund;  a quarter  goes to  an education  endowment fund                                                               
which  will reach  a  cap and  then roll  money  into the  public                                                               
education fund; and one quarter  goes into the lottery fund which                                                               
has a  $500 million cap. After  the lottery has reached  the cap,                                                               
all future  donations will  go to education.  Out of  the lottery                                                               
fund, 20  percent will go to  lotter prizes, and 80  percent will                                                               
stay in the  lottery fund. Every year the lottery  fund will grow                                                               
and will be managed in a conservative manner.                                                                                   
8:36:47 AM                                                                                                                    
MR.  FELLMAN   showed  a  table   of  hypothetical   fund  result                                                               
possibilities  year  by  year: number  of  participants,  average                                                               
donations, deposits to  fund types, and prize  amounts. He termed                                                               
it a bucket  lottery. He hoped the fund  would be self-sustaining                                                               
in the future.                                                                                                                  
He  noted Alaska  already has  sixteen  variations of  charitable                                                               
gaming and  he provided  examples, such as  the Ice  Classic. The                                                               
lottery will  not need  administrative money  from the  state, it                                                               
comes from the donations.                                                                                                       
8:40:05 AM                                                                                                                    
MR. FELLMAN explained the changes  in the proposed CS, version R.                                                               
One change  would cap the  amount of  money needed to  manage the                                                               
lottery to  $500,000. The  other change was  so that  the 125,000                                                               
people who do  not file their permanent fund on  a computer could                                                               
participate in the lottery. It  removes the word "electronic" and                                                               
"who files electronically" from the bill.                                                                                       
8:40:48 AM                                                                                                                    
SENATOR COGHILL  moved to  adopt the  CS for  SB 78,  labeled 30-                                                               
LS0534\R, as the working document before the committee.                                                                         
CHAIR HUGHES objected for discussion purposes.                                                                                  
8:41:43 AM                                                                                                                    
CHAIR HUGHES noted there are state  lotteries in the U.S., but SB
78 is more  like a raffle. She asked what  the difference between                                                               
a lottery and a raffle is.                                                                                                      
MR.  FELLMAN  clarified that  it  is  a limited  lottery  because                                                               
participants must  be residents  of the state  who receive  a PFD                                                               
and  the  donation can  come  only  once  a  year from  the  PFD.                                                               
Participants  cannot spend  their  children's PFD  or their  rent                                                               
money. It is different than any other game of chance.                                                                           
CHAIR  HUGHES   asked  why  they  chose   "lottery"  rather  than                                                               
MR. FELLMAN  said they  were excited  about it  and lottery  is a                                                               
catch  word for  big winnings,  not a  small raffle.  The sponsor                                                               
pictured  the  Governor announcing  the  permanent  fund and  the                                                               
winners  of this  lottery. He  concluded that  95 percent  of the                                                               
money stays secure for education.                                                                                               
CHAIR HUGHES removed her objection and version R was adopted.                                                                   
She held SB 78 in committee.                                                                                                    
8:45:35 AM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Chair Hughes  adjourned the  Senate Education  Standing Committee                                                               
at 8:45 a.m.                                                                                                                    

Document Name Date/Time Subjects
SB 78 - Sponsor Statement Alaska Permanent Fund Education Lottery - final.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Legislation Ver. U.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Proposed Blank CS Ver. R.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Sectional Summary.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Summary of Changes by CS SB78.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Fiscal Note - DOR-PFD-03-17-17.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Fiscal Note - LAW-CRIM-03-17-17.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Fiscal Note - DOR-TRS-03-17-17.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Supporting Doc. Dividend Summary.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Supporting Doc. Gaming report.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Supporting Doc. PickClickGive.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Supporting Doc. Statutes Reference SB78.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Supporting Doc.Alaska Permanent Fund Education Lotter2.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Supporting DOC.Games of Chance listed in Section.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 78 - Supporting Doc.SB78 Final chart.pdf SEDC 3/24/2017 8:00:00 AM
SB 78
SB 87 - Opposing Documents - Architects Alaska Inc. Letter of Opposition.pdf SEDC 3/24/2017 8:00:00 AM
SB 87