Legislature(2023 - 2024)ADAMS 519
05/15/2023 01:30 PM House FINANCE
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| SB140 | |
| SB48 | |
| SB77 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 48 | TELECONFERENCED | |
| + | SB 75 | TELECONFERENCED | |
| + | SB 140 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 178 | TELECONFERENCED | |
| += | SB 77 | TELECONFERENCED | |
SENATE BILL NO. 140
"An Act relating to funding for Internet services for
school districts; and providing for an effective
date."
3:58:04 PM
TIM GRUSSENDORF, STAFF, SENATOR LYMAN HOFFMAN, briefly
reviewed SB 140, which was the companion bill to HB 193. He
explained that there were two differences between the two
bills. Firstly, the effective date had moved from FY 24 to
FY 25 and the Senate had attached a new fiscal note that
had been zeroed out [control code EChxI, offered by the
Department of Education and Early Development (DEED)](copy
on file). The Senate wanted to determine what the finances
would be in FY 25 before committing additional funds to the
bill. The Senate did not believe that many of the smaller
communities in the state would be able to implement the
necessary infrastructure to reach 100 megabytes per second
(MBPS) download speed in the near future. The large fiscal
note was likely unnecessary for the time being. The
legislature could revisit the topic in the subsequent year
and determine if more funds were needed.
Co-Chair Foster clarified that the fiscal note referenced
by Mr. Grussendorf was OMB component 3004. He understood
that the Senate zeroed out the fiscal note but saw that
$6,000 was requested for services. He asked Mr. Grussendorf
to explain the request in more detail.
Mr. Grussendorf explained that the $6,000 request was
simply intended to keep the program running.
Co-Chair Edgmon commented that there were three categories
of schools in Alaska: those with high internet, those on
the E-rate program that would not participate in SB 140,
and those that did not have money or the wherewithal to
implement speeds beyond 20 MBPS. There were about 722
schools in the state with E-rate compensation. There were
many variables that would have to line up in order to
facilitate schools to participate in the broadband program.
He predicted that in the future, virtually every school in
the state would have access to high download speeds and
upload speeds. Before the fiscal note was zeroed out, it
reflected the cost that would have been required if every
school in the state qualified for and participated in the
broadband program at the maximum rate, which was unlikely.
The E-rate number was also not attainable. He noted that
the legislature would have to return to the topic the
following year and appropriate the money to allow for the
schools to participate in the program. He thought the bill
was important but thought the change to the fiscal note was
"overblown." It was an issue of fairness to him, and he was
concerned about the divide that seemed to exist surrounding
the bill.
Co-Chair Foster noted that Representative Jesse Sumner was
in the audience.
4:05:46 PM
Representative Galvin commented that she had been long
concerned that rural Alaska would not have the opportunity
to access the necessary online learning for the governor's
performance scholarship. She thought it was unfair that
communities did not have access to particular classes and
subjects that were required for the scholarship because
access to reliable internet was not guaranteed. She
emphasized that everyone needed to have the same
opportunities. She supported getting high-speed internet to
all areas of the state.
Representative Ortiz commented that he was in support of
expanding broadband throughout Alaska. He asked if there
was a timeframe for qualification for the Infrastructure
Investment and Jobs Act (IIJA) funds and whether there was
a concern that some rural schools might not be able to
implement the necessary infrastructure within the required
timeframe.
Mr. Grussendorf responded that he did not know the answer,
but DEED might have a comment. He wondered if Co-Chair
Edgmon might be able to provide more information.
4:09:43 PM
Co-Chair Edgmon asked Representative Ortiz to repeat the
question.
Representative Ortiz asked if there were required
timeframes that might cause some schools to lose out on
opportunities for federal funds for broadband.
Co-Chair Edgmon responded that the E-rate program had
already been very successful in the state. He thought
around $130 million was distributed amongst schools and
libraries in the prior year. The state had been able to
match the federal E-rate funds since the beginning of the
program. In 2014, the Broadband Assistance Grant (BAG) was
established to directly allow schools to participate in the
program and receive 10 MBPS internet. He added that IIJA
had raised the benchmark from 10 MBPS to 100 MBPS. Schools
needed to have faster internet services and he thought
schools might have to rely on satellite programs. He did
not think the fiscal note was projecting into the future
because there would be a reduced number of schools and
services dependent upon an E-rate program. He noted that
the cruise ships in Juneau impacted internet services and
some communities experienced slow internet speeds year-
round. He thought the demand was real and schools would be
at a disadvantage without high-speed internet. There was no
immediate plan because the timelines were different
depending on the community. Fiber-optic cable projects were
planned in various areas of the state, but the timelines
were varied. The projects were in motion but there was
nothing to be done in the meanwhile. He was frustrated that
students were expected to perform at a certain level in
standardized tests when all schools did not have the same
resources.
4:14:40 PM
Representative Stapp commented that he had never seen a
fiscal note change to reflect the preferences of the Senate
Finance Committee. He asked if it was typical practice.
Mr. Grussendorf responded that it had happened before
although it was not necessarily typical. There were times
when a legislature received new information and might
disagree with a department's fiscal note. He thought it
seemed unlikely that every school district in the state
would be able to take advantage of the program immediately.
A similar situation had occurred in the past in which a
fiscal note regarding Power Cost Equalization (PCE) assumed
that every household in the state would increase its
kilowatt level to the maximum, which was unrealistic.
Representative Stapp thought the reasoning was sound and
agreed that it did not seem possible that all schools could
take full advantage of the program within the next fiscal
year. He noted that GCI had provided estimates (copy on
file) of household internet usages, and he wondered why the
estimates could not be used in lieu of offering an
indeterminate fiscal note.
Mr. Grussendorf responded that he thought there needed to
be more work done. The Senate Finance Committee asked DEED
to craft a more specific fiscal note but did not receive a
response. He thought it should wait until the estimates
were available.
Representative Stapp asked why the legislature should pass
the bill now if there still needed to be more work done on
the fiscal note, particularly considering that the
increases would not go into effect until FY 25.
Mr. Grussendorf responded that he did not know the answer
and it was a policy decision made by the Senate Finance
Committee.
Representative Stapp asked if DEED had weighed in on the
changes made to the fiscal note.
Mr. Grussendorf responded that he was not aware of a
response by the department. He was not sure if the
department would know how many schools would be able to
participate in the initial program.
4:19:52 PM
Representative Hannan stated that she was in support of
internet capabilities across the state, particularly in
rural areas. Her concern was that the bill took effect in
January of 2024. She wondered why the bill needed to be
moved rapidly now considering the effects would not be
immediate. She understood that the House and Senate
versions of the bills had not been introduced until the
first week of May and added that the first time she had
heard about the bill was when GCI came to her directly and
shared the company's support for the bill. She was more
understanding about schools needing the benefits provided
by the bill than about vendors' needs. She asked if an
element of the bill would be lost if it did not pass in the
current session.
Mr. Grussendorf responded that the delay in the effective
date of the bill was because many of the schools were still
in the midst of the time consuming grant writing process.
By the time IIJA funds were available, the majority of the
bill would be in place and districts could start applying
for the money.
Co-Chair Edgmon added that the competition for the federal
E-rate program had increased tremendously. The state needed
to be organized in order to receive money from the federal
government due to IIJA money and a renewed emphasis on the
E-rate program. Schools could be positioned to participate
in the E-rate cycle that would take effect in 2024 if the
bill were to pass in 2023. If the legislature waited to
pass the bill until 2024, there would be an entire year of
lost time. He was convinced that there would be a
significant difference between passing the bill in 2023 and
waiting until 2024.
Representative Ortiz understood that it was unlikely that a
large number of school districts in the state would be
applying for the broadband funds. He asked what would be
different that would permit more districts to have access
to broadband in the following year. He understood that
there was a lack of infrastructure, but wondered what other
changes would be enacted to encourage a wider availability
of broadband. He was unsure what the timeframe and order of
operations should be.
Co-Chair Foster suggested that Ms. Lisa Parady respond to
the question.
4:26:28 PM
LISA PARADY, EXECUTIVE DIRECTOR, ALASKA COUNCIL OF SCHOOL
ADMINISTRATORS, responded to Representative Ortiz's
question. She noted that DEED Deputy Commissioner Lacy
Sanders was also available for questions. School districts
needed to apply for the BAG program by March of each year
to qualify for service in the following year. She
acknowledged that Co-Chair Edgmon was correct in that
districts' ability to access the grant would be pushed to
the following year if the bill was not passed in the
current year. The state had missed the March deadline, but
she hoped the passage of the bill would allow districts to
apply by March of 2024 for service in 2025. She explained
that the emphasis of IIJA was on the communities that did
not have service and many of the schools to which Co-Chair
Edgmon spoke were in unserved areas. She did not want to
create a situation in which the unserved districts would be
artificially capped at 25 MBPS. The E-rate was a formula
unique to each school district and largely tied to poverty.
She agreed that the fiscal note would not accurately depict
the uses because not all districts were ready to access the
dollars. She thought the bill would provide equity to
students in rural areas as the districts became more able
to access the funds, which would look different for each
district. There would also be price compression as more
infrastructure was built; however, more providers would be
able to offer services which would bring about competition
and alleviate price compression. The department crafted a
fiscal note on what it knew to date, but it was not able to
determine which district would be able to build the
necessary infrastructure in time.
Co-Chair Foster asked whether the deputy commissioner would
like to respond to the question as well.
LACEY SANDERS, DEPUTY COMMISSIONER, DEPARTMENT OF EDUCATION
AND EARLY DEVELOPMENT, clarified that the E-rate
application period was open from January through March.
After the application period was over, the department used
the information to develop the broadband grants
application. The application period had opened in April and
districts were working on applications for FY 24. As
currently written, the bill would apply to the 2025
application period.
Co-Chair Foster asked whether Ms. Christine O'Connor would
like to respond to the question as well.
4:31:54 PM
CHRISTINE O'CONNOR, EXECUTIVE DIRECTOR, ALASKA TELECOM
ASSOCIATION, ANCHORAGE (via teleconference), responded that
if the legislature waited to pass the bill until the next
session, it would push schools' eligibility for broadband
speed increases back to July 1 of 2025. She added that the
state already had over $600 million in federal grant
funding and over $50 million in private capital to help the
state fund projects. The funds had already been allocated
to Alaska before IIJA funding and the state would see the
impacts of IIJA funding on broadband over the course of the
following year. As the infrastructure at the schools was
upgraded, the schools would not be limited to 25 MBPS as
long as the broadband grant program was in place because
the schools would be able to access a fiber connection as
soon as it was available. She noted that pricing for
broadband had been dropping dramatically in recent years
and the drops were expected to continue. The cost of
broadband on a fiber network would be different than what
schools currently paid for satellite service. She concluded
that broadband would become less and less expensive and
there would be more competition. Every broadband provider
in the state was building network or planning to build
network which would also contribute to lowered rates.
Co-Chair Foster thought that the timing of the rollout of
the program had been explained thoroughly. He noted that
there were other individuals available for questions if
needed.
4:35:17 PM
Representative Hannan understood the timing and the need to
pass the bill in the current session. She asked why the
bill was not introduced until May 1. She wondered if it was
not known whether the state would have the capacity to
reach 100 MBPS. She assumed that any school without the
infrastructure to implement the program in January of 2023
would still not have the infrastructure in May of 2023. She
asked what changed that offered assurance that the state
could reach the 100 MBPS capacity.
Ms. Parady responded that the bill began with 10 MBPS in
2014. She lived on the North Slope at that time and had
seen the impact on teachers and schools unable to work with
the internet. She had worked with senators at the time to
set the floor at 10 MBPS, which was monumental for remote
and rural areas. About five years ago, she worked with Co-
Chair Edgmon and others to lift the floor to 25 MBPS, which
was still very slow. She explained that it was decided that
it would make sense to again incrementally lift the floor
to 100 MBPS given the emphasis on infrastructure due to
IIJA and other similar programs. Increasing internet speeds
in schools was a goal for the Alaska Council of School
Administrators every year. When students were learning
remotely due to COVID-19, students who did not have more
than 25 MBPS internet speeds were doing paper and pencil
packets for almost two years.
Representative Hannan supported the bill. She could not
imagine that any district with lower internet speeds would
not be "hounding" their legislators to introduce the bill
by January 1. She was irritated that the bill was
introduced so late in the session and thought mistakes
could be made if it were to be rushed. She was confused as
to why the bill was not pre-filed.
Representative Cronk agreed with Co-Chair Edgmon that the
bill was needed in rural districts. He had taught in very
remote areas and it was difficult to navigate the internet
capabilities. Higher speed internet was key to helping
students learn.
Co-Chair Edgmon commented that the topic of increasing
internet speeds in schools had always been "out there," but
the emphasis for many schools was on an increased Base
Student Allocation (BSA). There were many schools that felt
that advocating for both a higher BSA and increased
internet speeds would be unrealistic in the current
political environment.
4:41:37 PM
Representative Galvin asked if schools were using a portion
of classroom budgets to cover internet services or if it
was an entirely separate budget item.
Ms. Parady deferred the question to Ms. Sanders. She did
not think that classroom budgets were used for internet.
Ms. Sanders responded that she agreed with Ms. Parady.
School districts received a grant for internet and
individual classrooms were not paying for internet
services.
Representative Galvin understood that if a district was
short on the E-rate money, the monetary shortfall would be
a completely separate issue from the need for BSA
increases. She wanted to clarify that the two would be
considered completely different needs.
Ms. Parady responded that the state provided broadband
assistance grants, but the school districts could use other
funding towards the negotiated contract districts had with
their service provider.
Representative Galvin asked if all of the funding that
would be allocated through SB 140 would be specific to
internet services. She understood that the money would be
returned to the state if all of the funds were not used.
Ms. Parady responded that the department would have a few
options if it had an appropriation that was not sufficient
to meet all of the applications received for broadband
grants. One option would be to prorate the funding and a
second option would be that the department could ask for a
supplemental for the shortfall, which would mean that the
department would need to make a request to the legislature.
The school districts entered into a grant agreement with
the department and the funding was only used for the
broadband grants. If the school did not use the entirety of
the funding, it would be returned to the department.
Representative Galvin asked if the minimum speed was
changed from 25 MBPS to 100 MBPS but the state could not
deliver the speed, would the state be set up for an
"unfunded mandate."
Ms. Sanders responded that school districts signed the
contracts with the service providers and if the broadband
funding was not sufficient, the districts would have to
determine how to pay for the remaining balance, whether
that be through local contributions, funding from the BSA,
or another funding source.
4:46:53 PM
Representative Stapp read AS 13.03.127(b):
If insufficient funding is appropriated to provide
funding authorized under this section, the state share
shall be distributed pro rata to eligible school
districts.
Representative Stapp understood that the bill would amend
the statute. He understood that under SB 140, the district
would apply for a grant and the legislature would
appropriate the funds. He did not think the legislature
would be able to appropriate the necessary amount of funds
to the program given the confusing situation regarding the
fiscal note. He understood that the district would
distribute the grants and then likely return to the
legislature to request a supplemental if more funds were
needed. He presumed that the cost in the fiscal note would
not matter because there would likely be another cost in
the supplemental budget. He asked if his understanding was
correct.
Ms. Sanders responded that requesting a supplemental was a
policy call; however, Representative Stapp was correct that
the first step would be to determine whether proration was
to occur and that an option would be to return to the
legislature and identify the shortfall.
Representative Coulombe referred to a spreadsheet titled
"Federal E-rate Program Report Summary" (copy on file)
provided by DEED. She noted that on page 10, the Lower
Kuskokwim School District (LKSD) was being charged $28
million for internet. She asked if she was reading the
spreadsheet correctly.
Ms. Sanders deferred the question.
4:49:20 PM
AMY PHILLIPS-CHAN, DIRECTOR, DIVISION OF ARCHIVES,
LIBRARIES AND MUSEUMS (via teleconference), responded that
the pre-E-rate cost for LKSD was about $28 million. She
noted that E-rates would pay between 20 percent and 90
percent of an eligible district's cost for internet
services. In 2023, LKSD received just under $2 million from
the E-rate program.
Representative Coulombe asked if it was $28 million per
school in LKSD.
Ms. Phillips-Chan responded that she did not have the
particular spreadsheet in front of her, but she understood
that $28 million was the total cost for the district.
Co-Chair Foster asked for clarification that he was looking
at the correct spreadsheet.
Representative Coulombe noted that the spreadsheet was
provided by DEED and had yellow shading. She supported
better internet rates for schools and was intimately aware
of the issue due to being on the DEED Finance Subcommittee.
She asked where the accountability was for providers as far
as the rates being charged. She asked whether there was a
limit to the amount the federal government would pay. She
thought it seemed like a significant amount of money.
Ms. Sanders deferred the question to Ms. Phillip-Chan as
she did not know the limits.
Ms. Phillips-Chan responded that she had the conversation
with the E-rates coordinator when the bill was first
introduced. The question was posed if schools would be
eligible for increased funding through the E-rate program.
Through the conversation, it was agreed that the schools
would be able to receive additional funding from the
program if the internet speed increased to 100 MBPS. The
total award amount for each school district was based on
the poverty levels of students as measured by their free
lunch or reduced lunch eligibility.
Ms. Parady elaborated that there had been leftover money in
every year in which the 25 MBPS level was achieved. The
department had not needed to come forward with an
additional supplemental request.
4:53:34 PM
Co-Chair Foster announced that the committee would take an
at ease that might be extended. He had just received word
that there was a 5:00 p.m. meeting and the committee would
reconvene after the meeting.
4:54:16 PM
RECESSED
6:43:40 PM
RECONVENED
Co-Chair Foster called the meeting back to order. He
reminded the committee of items on the agenda.
6:44:54 PM
AT EASE
6:46:02 PM
RECONVENED
Co-Chair Foster asked if members had any more questions
about SB 140.
Representative Galvin thought the costs associated with the
bill could vary widely. She wondered if there was a way to
ask for a specific type of process in coordination with the
E-rate program.
Co-Chair Edgmon responded that the federal E-rate program
and its process, the BAG program and its process, and the
school districts' decisions covered Representative Galvin's
question and any autonomy that could be outside of the
three elements he listed.
Co-Chair Foster understood that the bill was time
sensitive. He noted that there was one amendment but if
other members wanted to craft more amendments, he could set
an amendment deadline for the following day.
6:49:11 PM
AT EASE
6:51:22 PM
RECONVENED
Co-Chair Johnson MOVED to ADOPT Amendment 1, 33-LS0687\S.2
(Klein, 5/15/23) (copy on file):
Page 1, line 1, following "districts;":
Insert "relating to transportation of students;"
Page 1, line 10:
Delete all material and insert:
"* Sec. 2. AS 14.09.010(a) is repealed and reenacted
to read:
(a) A school district that provides student
transportation services for the transportation of
students who reside a distance from established
schools is eligible to receive funding for operating
or subcontracting the operation of the transportation
system for students to and from the schools within the
student's transportation service area. Subject to
appropriation, the amount of funding provided by the
state for operating the student transportation system
is the amount of a school district's ADM, less the ADM
for the district's correspondence programs during the
current fiscal year, multiplied by the per student
amount for the school district as follows, for the
school years beginning July 1, 2023:
DISTRICT PER STUDENT AMOUNT
Alaska Gateway $2,536
Aleutians East 378
Anchorage 531
Annette Island 222
Bering Strait 60
Bristol Bay 3,257
Chatham 342
Copper River 1,934
Cordova 409
Craig 515
Delta/Greely 2,019
Denali 2,203
Dillingham 1,484
Fairbanks 995
Galena 310
Haines 763
Hoonah 364
Iditarod 258
Juneau 735
Kake 331
Kashunamiut 6
Kenai Peninsula 1,115
Ketchikan 886
Klawock 712
Kodiak Island 974
Kuspuk 797
Lake and Peninsula 468
Lower Kuskokwim 338
Lower Yukon 1
Matanuska-Susitna 1,109
Nenana 716
Nome 757
North Slope 1,365
Northwest Arctic 30
Pelican 88
Petersburg 457
Saint Mary's 235
Sitka 522
Skagway 44
Southeast Island 1,408
Southwest Region 728
Tanana 581
Unalaska 790
Valdez 897
Wrangell 854
Yakutat 907
Yukon Flats 322
Yukon/Koyukuk 365
Yupiit 2.
* Sec. 3. Section 1 of this Act takes effect January
1, 2024.
* Sec. 4. Section 2 of this Act takes effect July 1,
2023."
Co-Chair Foster OBJECTED for discussion.
Co-Chair Johnson explained that the amendment would
increase the districts' transportation per-student funding.
Transportation funding generally came from the BSA. The
amendment would alleviate some of the pressure some
districts were feeling and ensure that students were able
to get to school on time. The projected pupil
transportation funding was estimated to be $72,568,348 and
the amendment increased funding to $88,079,805. The funding
would come from a general fund transfer to the education
fund. She had ensured that the amendment was single-subject
compliant with the underlying bill and asked for members'
support.
Representative Ortiz referred to page 3 of the amendment.
He asked which version of the bill would be changed by the
amendment.
Co-Chair Johnson deferred the question to her staff.
6:53:51 PM
MATT GRUENING, STAFF, REPRESENTATIVE DELENA JOHNSON,
explained that Amendment 1 was referring to Section 1 of
the underlying bill (SB 140). The bill had a delayed
effective date of January 1, 2024, and the amendment would
change the effective date of the pupil transportation
portion of the bill to July 1, 2023.
Representative Ortiz asked if the impact of the amendment
would be one year or two years of transportation funding.
Mr. Gruening responded that he understood it to be one year
of transportation funding but asked if an available
testifier could confirm the information.
Co-Chair Foster asked Mr. Gruening if he wanted a response
from Ms. Lacey Sanders. He was unsure if Ms. Sanders was
still available.
Mr. Gruening responded in the affirmative. He added that
the appropriation process would occur annually and the
funding would need to be paid out year by year.
Representative Hannan understood that the Senate had
included pupil transportation in its version of the
operating budget. She asked if the dollar amounts in the
amendment were identical to the numbers put forth by the
Senate. She wondered if the funding would include every
district that offered pupil transportation.
Co-Chair Johnson responded that the amendment would allow
all districts to get transportation. She was unsure what
figures the Senate had put forth in its version of the
operating budget.
Mr. Gruening responded that the pupil transportation
funding was paid out annually based on a statutory formula
and the figures in the amendment were identical to those in
the Senate's bill.
6:57:05 PM
Representative Galvin understood that the bill would cause
a net positive extra expense to the current year's budget
of over $7 million. She noted that the disparity between
the districts was quite large; for example, the Alaska
Gateway was at $2,536 while Bering Strait was $60. She
asked if the figures were proportionate based on number of
students, number of miles, or another measurement.
Mr. Gruening responded that the figures in SB 52, which had
been passed by the Senate, were used to derive the figures.
He was not certain how the increases were decided upon but
thought that DEED would have more information.
Representative Galvin relayed that she had heard from a
superintendent that it might be based on half of the
Consumer Price Index (CPI) and about 11 percent for every
district. She asked if her understanding was correct.
Mr. Gruening asked if there was anyone from DEED available
to answer the question.
Co-Chair Foster responded that he did not think anyone was
available.
Co-Chair Johnson understood that the figures were based on
the number of miles in the district. Some students in
districts such as the Alaska Gateway lived further from the
schools than students in other districts. She thought that
transportation needed to reflect the needs of each
individual district.
Representative Stapp was confused by the amendment. He
thought that the proposed increase for the Anchorage School
District was not proportionate to the number of students in
the district. He understood that the increase in the
amendment would total $7.5 million but the underlying bill
had an indeterminate fiscal note. He did not understand how
the $7.5 million figure had been derived.
Mr. Gruening responded that the numbers came from Fiscal
Note 7 from SB 52 [control code VbdAN by DEED](copy on
file), which was the fiscal note that increased pupil
transportation funding.
Co-Chair Foster asked if the fiscal note represented the
net change.
Mr. Gruening responded in the affirmative.
Representative Stapp understood that there would be a $7.5
million indeterminate fiscal note if the amendment were to
be adopted.
Mr. Gruening responded in the negative and explained that
DEED had calculated the increase for each school district.
He added that it was technically a zero fiscal note because
the funding would come from the public education fund, but
the increased cost was identified in the analysis and would
total about $7.5 million.
Co-Chair Foster suggested that Ms. Heidi Teshner respond to
the question.
7:02:52 PM
HEIDI TESHNER, ACTING COMMISSIONER, DEPARTMENT OF EDUCATION
AND EARLY DEVELOPMENT, (via teleconference), responded that
the $7.5 million figure was based on the 11 percent
increase per student amount that was already set out in
statute. The amounts were based on historical expenditures
by district and varied across districts based upon the per
student amounts.
Representative Stapp referred to lines 7 through 10 of the
amendment. He asked what the amendment would accomplish and
why $7.5 million was needed. He did not understand how the
figure was derived. He asked if transportation services
were being increased by 11 percent.
Ms. Teshner responded that was her understanding and
explained that SB 52 increased the current existing per
student amounts that were set in statute. The amounts were
then multiplied by the average daily membership (ADM) minus
correspondence programs. She explained that was the process
through which the $7.5 million figure was derived.
Representative Stapp responded that the amendment did not
indicate the information.
Co-Chair Foster reminded the committee that Mr. Alexei
Painter was available for questions. He noted that
Representative Mike Prax was in the audience.
Co-Chair Johnson asked Mr. Painter to respond to
Representative Stapp's question.
ALEXEI PAINTER, DIRECTOR, LEGISLATIVE FINANCE DIVISION,
explained that the fiscal note was included in the Senate's
version of the operating budget and attached to SB 52. If
it passed in SB 140 instead of SB 52, the transportation
increases would still be funded through the public
education fund and set in statute.
7:06:57 PM
Representative Coulombe understood that the public
education fund had a strict formula that determined the
amount that could be drawn from the fund. She thought it
was based on a percent of market value (POMV) draw. She
asked Mr. Painter if he could clarify the process.
Mr. Painter responded that he thought Representative
Coulombe might be confusing it with the Public School Trust
Fund. The public education fund was an amount based on an
annual estimate of the expenditures for pupil
transportation costs and the foundation program.
Representative Tomaszewski thought that it seemed like the
amendment proposed a statute change. He understood that if
the statute were to be changed, the increase would occur
annually.
Mr. Gruening responded that it was a change to statute and
would be paid out every year but it would still be part of
the annual appropriation process.
Representative Tomaszewski asked if there was a fiscal note
associated with the change.
Mr. Gruening responded that the fiscal note would be
updated after the bill moved from committee.
Co-Chair Foster clarified that the fiscal note would be
identical to Fiscal Note 7 to SB 52. He suggested that
committee staff copy the fiscal note and distribute the
copies to committee members.
Representative Galvin asked for clarification that while it
would be an increase of $7.5 million, there had not been an
increase since 2016. She asked if the amounts could
decrease if there was a population decrease and there were
fewer students in any given district.
Mr. Gruening responded that he understood that the numbers
would adapt based on the formula. He asked DEED to confirm
the information.
Ms. Teshner responded that it was based on the actual ADM.
If the ADM was lower than the appropriation, the funding
would lapse back to the public education fund.
7:11:05 PM
Representative Josephson noted that there were larger
numbers for highway dependent communities. He asked why a
district such as Kuspuk requested $797 per student, but the
Lower Yukon School District (LYSD) was $1 per student.
Ms. Teshner responded that the per student amounts were
originally based on historical data of what the actual
transportation costs were in a given district. Some
districts did not provide a pupil transportation program
even though a dollar amount was designated in statute to
fund the program. Districts informed the department every
year whether or not they would be participating in the
transportation program and the department would provide
grants accordingly. If a district did not provide a program
in the time period during which the historical data was
calculated, the current per student amounts would be low.
Representative Josephson assumed that schools in LYSD would
play each other in sporting events and students would fly
from town to town. He wondered if such travel would be
considered pupil transportation.
Ms. Teshner responded in the negative and explained that
pupil transportation strictly referred to transportation to
and from school.
Representative Coulombe asked Mr. Painter how much money
was currently in the public education fund.
Mr. Painter responded that it was projected to be zero at
the end of the year. There was originally a forward funding
appropriation, but based on oil prices the fund was
projected to have a zero balance by the end of the year.
The two appropriations to the fund were the amount
necessary for the foundation program and the amount
necessary for the pupil transportation program. After the
two appropriations had been utilized, the balance would be
zero.
Representative Coulombe understood there was currently a
zero balance but money would come back in to pay for the
two appropriations.
Mr. Painter responded that the two appropriations were
transferred into the fund from the general fund. The fund
would then be spent without further appropriation according
to the formula. He clarified that the process was to
appropriate the amount necessary from the general fund to
the public education fund to cover the two appropriations,
which would then be distributed to the districts
accordingly.
7:14:39 PM
Representative Hannan asked about districts that had single
digit dollar amount increases for transportation. She
understood that the districts in question did not claim any
student transportation funds and the number acted as a
placeholder.
Ms. Teshner responded that Representative Hannan's
understanding was correct.
Representative Hannan asked if the 11 percent increases
were for districts that were actually offering pupil
transportation and if the remainder of the increases were
just placeholders.
Ms. Teshner responded in the affirmative.
Co-Chair Foster noted that Representative Jesse Sumner was
in the audience.
7:16:14 PM
Co-Chair Edgmon understood that the committee was hearing a
Senate bill [SB 140] that was amending another Senate bill
[SB 52]. He wondered if the bill before the committee was
necessary if the same information already existed in
another bill. He supported the intent of the amendment but
did not understand the purpose if it was already in another
bill.
Co-Chair Johnson responded that her intent was not to
impair either bill, but to make SB 140 more appealing and
more applicable to all areas of the state. She thought the
amendment would add dimension to the underlying bill and
wanted to ensure that the pupil transportation increases
would get funded regardless of the bill that passed. There
had been a significant shortage of bus drivers and the
drivers were going on strike in the Mat-Su Valley and there
was a need for funding increases. She wanted to ensure that
the transportation increases happened and the bus driver
shortage and strike were addressed.
Co-Chair Edgmon commented that the Mat-Su Valley would
receive a large sum if the BSA were to be increased and
some of the money could be used for pupil transportation.
He asked if SB 52 would insert the transportation increases
into statute in the same manner as Amendment 1 to SB 140.
He understood that the intent was to include the increases
in SB 140 because SB 52 might not pass. He asked if his
understanding was correct.
Co-Chair Johnson responded that her intent was to ensure
that pupil transportation was addressed in the current
year. She had not tracked the specifics of SB 52. She
thought that pupil transportation was separate from the BSA
and it was important that both were addressed.
7:20:52 PM
AT EASE
7:30:18 PM
RECONVENED
Co-Chair Foster explained that he checked with Legislative
Legal Services to ensure that it was legal to copy a
section of one bill and insert it into another bill. He
received confirmation that it was legal. He asked Ms.
Teshner to speak to the fiscal note.
Ms. Teshner did not have the information in front of her.
Co-Chair Foster asked Representative Tomaszewski to repeat
the question.
Representative Tomaszewski referred to Fiscal Note 5 to SB
52 [control code hGSaa by DEED](copy on file) which showed
an increase to the BSA. He relayed that he no longer had a
question on the fiscal note.
Co-Chair Foster asked if Ms. Teshner had any comments. He
asked staff to copy and distribute Fiscal Note 5 to the
committee.
Ms. Teshner responded that there would be a zero fiscal
note for SB 52 for the foundation program and a zero fiscal
note for the pupil transportation program. The pupil
transportation component was zero because the funding
originated from the general fund and was transferred into
the public education fund and not directly into the pupil
transportation component. The amount was shown in the
public education fund in Fiscal Note 5.
Co-Chair Foster asked if Fiscal Note 5 was no longer valid
after the introduction of Fiscal Note 7.
Ms. Teshner responded in the negative and relayed that both
were necessary. Both notes included the same analysis, but
Fiscal Note 7 was a zero fiscal note because the funding
was not directly appropriated into the formula and was
instead a general fund transfer to the public education
fund. The foundation program and pupil transportation
program were funded through a draw from the public
education fund.
Representative Tomaszewski asked if the appropriations
included any federal match funding.
Ms. Teshner responded that the pupil transportation program
did not have any federal match, but the foundation funding
had funding that could be considered a federal match.
Alaska was an equalized state and had an equalized formula,
which meant that federal impact aid funding was integral
when considering the amount of state aid paid that would be
paid out to districts. The funding could be considered a
federal match because the state was allowed to use the
funding to reduce the amount paid by the state.
Representative Tomaszewski asked if the match applied to
pupil transportation.
Ms. Teshner responded in the affirmative.
7:35:56 PM
Representative Coulombe asked how the 11 percent increase
was chosen.
Ms. Teshner responded that the Senate Finance Committee
(SFC) proposed the 11 percent increase.
Representative Coulombe asked if the figure was based on a
formula or something similar.
Ms. Teshner replied that she understood that it related to
the CPI adjustment, but she was not certain of the exact
formula.
Co-Chair Edgmon commented that he thought that 11 percent
represented half of the CPI increase that was put into
place by SFC. He did not know the reason why it was half of
the CPI and not 75 percent or 100 percent.
Co-Chair Johnson noted that the pupil transportation
program was usually the last component of education to be
funded. Pupil transportation was usually the first area to
suffer when there were financial shortfalls and she thought
the amendment made sense.
Co-Chair Foster WITHDREW the OBJECTION.
Representative Coulombe OBJECTED.
7:38:05 PM
A roll call vote was taken on the motion.
IN FAVOR: Josephson, Ortiz, Cronk, Representative Stapp,
Galvin, Hannan, Edgmon, Foster, Johnson
OPPOSED: Coulombe, Tomaszewski
The MOTION PASSED (9/2). There being NO further OBJECTION,
Amendment 1 was ADOPTED.
7:39:09 PM
AT EASE
7:45:21 PM
RECONVENED
Representative Josephson relayed that he was interested in
moving a conceptual amendment. The amendment would be
relevant to AS 14.17.470 and the proposed increase to the
BSA to $6,640; however, due to the late introduction of the
bill, he suggested adopting the remainder of SB 52 apart
from the pupil transportation portion that had just been
adopted by the committee. [Although not explicitly stated,
Representative Josephson MOVED conceptual Amendment 1 to
Amendment 1.]
Co-Chair Foster OBJECTED for discussion.
Representative Josephson confirmed that Conceptual
Amendment 1 was to adopt Version D of SB 52.
Representative Stapp wanted to change the $680 per student
increase to $1,300 per student. He MOVED conceptual
Amendment 1 to conceptual Amendment 1 to Amendment 1.
Co-Chair Foster OBJECTED for discussion.
Co-Chair Edgmon called a point of order. He was not certain
if it was permitted to move a conceptual amendment to a
conceptual amendment.
7:48:01 PM
AT EASE
7:48:28 PM
RECONVENED
Co-Chair Foster relayed that it was not permitted to move a
conceptual amendment to a conceptual amendment.
Representative Stapp WITHDREW conceptual Amendment 1 to
conceptual Amendment 1 to Amendment 1.
Co-Chair Foster noted that conceptual Amendment 1 to
Amendment 1 was before the committee.
Representative Cronk opposed the conceptual amendment. He
understood the broadband funds would help rural Alaska and
he did not think a significant BSA increase belonged in the
bill.
Representative Tomaszewski commented that the committee had
just determined whether it was permittable to incorporate
the pupil transportation portion of SB 140 into SB 52. He
asked if it was allowable to incorporate the entirety of a
bill into another bill.
Co-Chair Foster reiterated that his staff spoke with
Legislative Legal Services and was informed that it was
legal to insert a portion of one bill into a separate bill.
He suggested that his staff speak to the matter in more
detail.
7:51:23 PM
BRODIE ANDERSON, STAFF, REPRESENTATIVE NEAL FOSTER,
explained that committees were permitted to make a wide
array of changes to bills. He acknowledged that if a bill
was on the floor, a separate bill could not be pulled from
another committee and brought to the floor in order to
combine the bills together. He noted that SB 52 was in the
possession of the House Finance Committee and therefore the
committee could make any changes it wanted to SB 52 and SB
140.
Co-Chair Foster commented that there was an upcoming
amendment by Representative Tomaszewski that would have
impacted both bills, but the representative was told he
should move the amendment on the floor rather than in
committee. He wondered if Representative Tomaszewski would
have been permitted to move the amendment in committee.
Mr. Anderson responded that he would not be comfortable
answering the question and suggested that a representative
from legal services could better respond.
Co-Chair Edgmon commented that the process was getting
complicated. He thought that the committee supported
Amendment 1.
Co-Chair Foster stated that he was in support of SB 52 and
supported conceptual Amendment 1.
7:54:04 PM
Representative Coulombe echoed Representative Cronk's
comments. She thought the inclusion of conceptual Amendment
1 would threaten the intent of SB 140. She thought the bill
should be straightforward which was the reason she gave for
opposing Amendment 1 and including the pupil transportation
program in the bill. She relayed that she was in opposition
to the conceptual amendment.
Representative Cronk commented that the bill would not pass
if the conceptual amendment was adopted. He was in support
of increased broadband services.
Representative Galvin thought that the conceptual amendment
was an odd way to accomplish the BSA increase but she
supported it. The House had already passed the $174 million
increase to the BSA and sent a budget to the Senate that
was not balanced. She thought it would help the education
system to have predictable funding and that the increase
seemed reasonable. She noted that the state needed better
broadband services and she supported the intent of both
bills as well as the conceptual amendment.
Co-Chair Foster understood that the questions of legality
had been answered but noted that legislative legal was
available for any further questions.
Representative Josephson clarified that SB 52 contained a
BSA increase of $680 and pupil transportation, an increase
to residential schools and stipends, and some necessary
cleanup to the Alaska Reads Act. He thought it was intended
to show the public that the money was well spent and that
the positive results would be evident.
Co-Chair Foster WITHDREW the OBJECTION.
Representative Cronk OBJECTED.
7:59:06 PM
A roll call vote was taken on the motion.
IN FAVOR: Edgmon, Foster, Galvin, Representative Hannan,
Josephson, Ortiz, Stapp, Tomaszewski
OPPOSED: Johnson, Coulombe, Cronk
The MOTION PASSED (8/3). There being NO further OBJECTION,
conceptual Amendment 1 to Amendment 1 was ADOPTED.
8:00:24 PM
Representative Stapp MOVED conceptual Amendment 3. He
suggested that the BSA increase change from $680 to $1,360.
Co-Chair Foster OBJECTED for discussion.
8:01:23 PM
AT EASE
8:33:31 PM
RECONVENED
Co-Chair Foster stated that he intended to set SB 140
aside.
Representative Ortiz asked if he could object to setting
the bill aside.
Co-Chair Foster thought Representative Ortiz could object
to the action. He suggested that the committee return to
the bill the following day.
8:34:44 PM
AT EASE
8:38:38 PM
RECONVENED
Representative Hannan asked whether the conceptual
amendment from Representative Stapp would still be before
the committee if it revisited the bill the following day.
Co-Chair Foster responded in the affirmative. He confirmed
that the BSA increase and the pupil transportation increase
had already been adopted.
Co-Chair Foster stated that SB 140 would be set aside.
Representative Ortiz OBJECTED [to setting the bill aside].
Co-Chair Foster commented that the committee was entering
new territory. He understood that if there were such an
objection, the chair would make a decision. He relayed that
the ruling of the chair was to set the bill aside but he
would put the action up for a vote.
Representative Galvin asked what the implications would be
to set the bill aside. She asked if the bill would have to
be returned to the other body. She wondered if there was
enough time to get the bill to the floor in order to vote
on it before the end of session.
Co-Chair Foster understood that if the intent was to move
the bill in the current year, it would need to pass out of
the committee; however, as the bill was not pending
referral, it would be pushed toward the end of the week. He
thought it would be difficult to get the bill to the floor
within the timeline of the current session.
Co-Chair Edgmon agreed with all of Co-Chair Foster's
comments.
Co-Chair Foster relayed that the question was whether the
ruling of the chair to set SB 140 aside would be sustained.
8:42:39 PM
A roll call vote was taken on the motion.
IN FAVOR: Coulombe, Cronk, Stapp, Tomaszewski,
Representative Galvin, Edgmon, Foster, Johnson
OPPOSED: Hannan, Ortiz, Josephson
The MOTION PASSED (8/3). There being NO further OBJECTION,
the ruling of the chair was sustained.
Co-Chair Foster reminded the committee of the remainder of
the agenda.
SB 140 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 77 Amendments 1-4 051323.pdf |
HFIN 5/15/2023 1:30:00 PM |
SB 77 |
| HB 178 ANHB White Paper - Ongoing Barriers to Access Water and Sanitation in Rural Alaska 2023.pdf |
HFIN 5/15/2023 1:30:00 PM |
HB 178 |
| HB 178 CS WORKDRAFT 050223 v.B.pdf |
HFIN 5/15/2023 1:30:00 PM |
HB 178 |
| HB 178 VSW DEC Water 042723.pdf |
HFIN 5/15/2023 1:30:00 PM |
HB 178 |
| SB 140 Supporting Document What does it cost.pdf |
HFIN 5/15/2023 1:30:00 PM |
SB 140 |
| SB 140 Public Testimony 051523.pdf |
HFIN 5/15/2023 1:30:00 PM |
SB 140 |
| CS for SB48(FIN) Sectional Analysis.pdf |
HFIN 5/15/2023 1:30:00 PM |
SB 48 |
| SB48 Summary of Changes in Senate committees.pdf |
HFIN 5/15/2023 1:30:00 PM |
SB 48 |
| SB48 DNR Presentation to House Finance Committee 5-15-23.pdf |
HFIN 5/15/2023 1:30:00 PM |
SB 48 |
| SB 140 Amendent 1 Johnson 051523 - S.2.doc.pdf |
HFIN 5/15/2023 1:30:00 PM |
SB 140 |
| SB 77 Public Testimony Rec'c by 051523.pdf |
HFIN 5/15/2023 1:30:00 PM |
SB 77 |