Legislature(2013 - 2014)HOUSE FINANCE 519

04/01/2014 08:30 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled TELECONFERENCED
Heard & Held
Moved CSHB 21(FIN) Out of Committee
Moved CSHB 127(JUD) Out of Committee
HOUSE BILL NO. 278                                                                                                            
     "An Act increasing the base  student allocation used in                                                                    
     the  formula for  state  funding  of public  education;                                                                    
     repealing the secondary  student competency examination                                                                    
     and  related  requirements;  relating  to  high  school                                                                    
     course credit earned through  assessment; relating to a                                                                    
     college and  career readiness assessment  for secondary                                                                    
     students;  relating   to  charter   school  application                                                                    
     appeals  and program  budgets; relating  to residential                                                                    
     school   applications;  increasing   the  stipend   for                                                                    
     boarding   school   students;  extending   unemployment                                                                    
     contributions for  the Alaska technical  and vocational                                                                    
     education  program;  relating  to earning  high  school                                                                    
     credit for  completion of vocational  education courses                                                                    
     offered   by  institutions   receiving  technical   and                                                                    
     vocational  education  program   funding;  relating  to                                                                    
     education  tax credits;  making conforming  amendments;                                                                    
     and providing for an effective date."                                                                                      
8:38:59 AM                                                                                                                    
Vice-Chair Neuman MOVED to ADOPT the proposed committee                                                                         
substitute for HB 278, Work Draft 28-GH2716\G, (Mischel,                                                                        
3/31/14). Co-Chair Stoltze OBJECTED for discussion.                                                                             
DANIEL   GEORGE,   STAFF,   REPRESENTATIVE   BILL   STOLTZE,                                                                    
discussed the work draft. He  stated that version G replaced                                                                    
version N. He  provided a sectional analysis.  He began with                                                                    
section  1  where  the governor's  language  was  reinstated                                                                    
related to an opportunity to  challenge for credit. He noted                                                                    
that sections 2, 3, and  4 reinserted provisions of existing                                                                    
statutes related  to the  high school  graduation qualifying                                                                    
8:41:28 AM                                                                                                                    
Mr. George  continued with section  5, page 5,  lines 29-30,                                                                    
which created  an opportunity for charter  school applicants                                                                    
to  further appeal  within 30  days  to the  state Board  of                                                                    
Education and  Early Development.  Section 5, page  6, lines                                                                    
6-8 related to  a situation where a local  school board that                                                                    
denied  an  application  for a  charter  school,  which  was                                                                    
subsequently  approved by  the state  board on  appeal could                                                                    
operate  the  charter school.  The  section  also removed  a                                                                    
former  subsection  stating  that   the  state  board  would                                                                    
operate  a charter  school  as  if the  state  board were  a                                                                    
school district.                                                                                                                
Mr. George  continued with  section 6,  page 6;  lines 18-26                                                                    
were added regarding charter  school application appeals and                                                                    
timelines. He  moved to  section 7, page  7; lines  3-5 were                                                                    
amended  to clarify  that if  the  school district  required                                                                    
lease  payments  by  a charter  school  the  district  would                                                                    
negotiate a lease  agreement with the charter  school for an                                                                    
amount  that  did  not exceed  the  true  operational  costs                                                                    
8:42:42 AM                                                                                                                    
Mr. George  discussed section 8,  page 7, where  lines 12-14                                                                    
were  added  to specify  that  a  local school  board  shall                                                                    
provide   a  charter   school   with   a  report   itemizing                                                                    
administrate  costs  retained  by the  local  school  board.                                                                    
Section 11, page 8, line 23  through page 9, line 7 inserted                                                                    
a new duty for the  Board of Education and Early Development                                                                    
to report to the  legislature recommendations for changes in                                                                    
the method  of education  spending by  the state  and school                                                                    
districts  that resulted  in  improved  efficiencies and  in                                                                    
administration of  public education  in the state.  He noted                                                                    
the removal of three sections:  a section relating to school                                                                    
bond reimbursement  program, a section relating  to boarding                                                                    
school  stipends and  a section  relating to  student counts                                                                    
for charter schools.                                                                                                            
Co-Chair  Stoltze  added  "it  keeps  them  in  without  the                                                                    
Mr.  George  continued with  section  15;  lines 21-27  were                                                                    
added   relating   to   the  public   education   fund   and                                                                    
appropriations for the Teachers  Retirement System (TRS). He                                                                    
continued with  section 16,  page 11,  line 28  through page                                                                    
14,  line 3,  which  was inserted  and  related to  unfunded                                                                    
liability and  the teachers  retirement cost  adjustment. He                                                                    
noted  page 14,  line 1  included a  change in  the required                                                                    
local  contribution  from 45  percent  to  40 percent  of  a                                                                    
district's  basic  need.  Section  17, page  14,  line  4-19                                                                    
amended the school size table  for purposes of calculating a                                                                    
schools Average  Daily Membership  (ADM) to  determine state                                                                    
Mr. George  continued with  sections 18, 19  and 20  on page                                                                    
14; lines 20-28  were amended to reflect an  increase in the                                                                    
Base Student  Allocation (BSA) by  $100 in addition  to that                                                                    
of the governor's  plan in the first year.  Section 21, page                                                                    
14, line 29  through page 15, line 15  was inserted relating                                                                    
to  state  aid  to  school  districts  and  withholding  for                                                                    
purpose of deposit into the  teachers retirement trust fund.                                                                    
Sections 22, 23  and 24 on page 15, line  13 though page 16,                                                                    
line 16  were inserted  relating to altering  teacher tenure                                                                    
from 3  years to  5 years and  subjecting tenure  to review,                                                                    
and regarding loss of tenure rights.                                                                                            
8:45:51 AM                                                                                                                    
Mr. George continued with sections 25,  26 and 27 on page 16                                                                    
line  17  through  page  17; line  19,  which  was  inserted                                                                    
relating  to  pension  benefits  and  employer  contribution                                                                    
rates,  transmitting   funds  for   deposit  in   a  teacher                                                                    
retirement  trust fund  and  additional state  contributions                                                                    
and  the teacher's  pension reserve  fund. Section  28, page                                                                    
17, lines-22  and 27 and page  18 were amended to  reflect a                                                                    
three-year   reauthorization   of   the   Alaska   Technical                                                                    
Vocational   Education  Program   (TVEP)  program   and  the                                                                    
allocations  of TVEP  funding present  in existing  statute.                                                                    
Section 30  was removed  from the bill  including subsection                                                                    
(h)  relating  to  a  20  percent  withholding  penalty  for                                                                    
failure to comply with new TVEP requirements.                                                                                   
Mr.  George continued  with  section 32;  the  option for  a                                                                    
municipality to  adopt by ordinance  a partial or  whole tax                                                                    
exemption  for all  or  a portion  of  privately owned  real                                                                    
property, rented or  leased for use as a  charter school was                                                                    
added.   Sections   33,   34  and   35   relating   to   the                                                                    
establishment, trusteeship  and management of  the teachers'                                                                    
pension  reserve   fund  and  the   duties  of   the  Alaska                                                                    
Retirement Management  Board were  inserted. He  stated that                                                                    
sections 36 through  46 related to the  income tax education                                                                    
credit,   mining   business  education   credit,   fisheries                                                                    
business  education credit  and  fisheries resource  landing                                                                    
tax education  credit. Three  changes were  made to  the tax                                                                    
credits, two of which were  permanent and one of which would                                                                    
sunset in 2021 along with other tax credits.                                                                                    
8:48:19 AM                                                                                                                    
Mr. George  pointed out  that section 48;  page 33,  line 25                                                                    
relating  to  transfer or  absorption  of  a federal  agency                                                                    
school and  teachers was repealed.  Section 50  was removed;                                                                    
it  included transition  language related  to the  appeal of                                                                    
the  high school  graduation qualifying  exam. Applicability                                                                    
language related  to teacher  tenure provisions  in sections                                                                    
22-24 was added. Section 51  addressed the effective date of                                                                    
transition language  related to charter  school applications                                                                    
filed  with the  local  school board;  it  was amended  from                                                                    
September  to   July  1,  2014.  Section   53  directed  the                                                                    
Department of  Administration to present to  the legislature                                                                    
a  written  proposal  to implement  a  salary  and  benefits                                                                    
schedule  for  school  districts.  Sections  54  through  59                                                                    
reflected the  effective dates of various  provisions of the                                                                    
act; notably the effective date  of the act was changed from                                                                    
September to July 1, 2014.                                                                                                      
8:49:53 AM                                                                                                                    
Co-Chair  Stoltze WITHDREW  his  OBJECTION.  There being  NO                                                                    
OBJECTION,  it was  so ordered.  Version G  was ADOPTED.  He                                                                    
stated his intent  for invited testimony related  to some of                                                                    
the  legislation's key  provisions.  He  invited a  vigorous                                                                    
amendment process.                                                                                                              
Representative  Munoz  asked  if  the  administration  would                                                                    
testify about the retirement portion of the CS.                                                                                 
Co-Chair Stoltze replied in the affirmative.                                                                                    
Representative  Munoz requested  invited testimony  from the                                                                    
8:51:22 AM                                                                                                                    
Representative Gara asked if he could pose technical                                                                            
questions related to the bill's provisions.                                                                                     
Co-Chair Stoltze denied Representative Gara's request.                                                                          
8:51:47 AM                                                                                                                    
Vice-Chair Neuman requested a written list of the changes                                                                       
made in the CS.                                                                                                                 
Co-Chair Stoltze agreed.                                                                                                        
8:52:07 AM                                                                                                                    
AT EASE                                                                                                                         
8:52:18 AM                                                                                                                    
Co-Chair Stoltze noted the deadline for amendments of 5:00                                                                      
8:53:00 AM                                                                                                                    
AT EASE                                                                                                                         
9:14:07 AM                                                                                                                    

Document Name Date/Time Subjects
HB 278 CS WORKDRAFT FIN 28-GH2716-G.pdf HFIN 4/1/2014 8:30:00 AM
HB 278
HB 278 Summary of Changes HB 278 - CS(FIN).pdf HFIN 4/1/2014 8:30:00 AM
HB 278