Legislature(2005 - 2006)SENATE FINANCE 532

05/02/2006 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved SCS CSHB 318(FIN) Out of Committee
Moved SCS CSHB 380(RES) Out of Committee
Heard & Held
Heard & Held
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
     CS FOR HOUSE BILL NO. 16(RLS)                                                                                              
     "An Act  relating to funding for  school districts operating                                                               
     secondary school  boarding programs,  to funding  for school                                                               
     districts  from which  boarding  students come,  and to  the                                                               
     effectiveness   of   district  secondary   school   boarding                                                               
     programs; and providing for an effective date."                                                                            
This was  the first hearing for  this bill in the  Senate Finance                                                               
Co-Chair Wilken  moved to adopt committee  substitute Version 24-                                                               
LS0125\C as the working document.                                                                                               
Co-Chair Green objected for explanation.                                                                                        
10:15:07 AM                                                                                                                   
RYNNIEVA MOSS,  Staff to Representative John  Coghill, the bill's                                                               
sponsor,   informed  the   Committee  that   five  years   prior,                                                               
Representative Coghill  had spent  time in  Nenana on  a building                                                               
remodeling  project.  Students   attending  the  Nenana  Boarding                                                               
School assisted  in that project. Those  students communicated to                                                               
Representative   Coghill   the   newfound  optimism   they   were                                                               
experiencing as  a result of  attending the boarding  school. The                                                               
experience "changed their  opinion of where they  were going with                                                               
their  life"  and  expanded   their  opportunities  for  becoming                                                               
"productive citizens".                                                                                                          
Ms.   Moss   stated   that,    because   of   this   interaction,                                                               
Representative  Coghill  became   "interested  in  the  so-called                                                               
boarding  school  concept".  This  bill  is  a  product  of  that                                                               
interest.  This bill  has  generated  tremendous discussion.  She                                                               
cited   Co-Chair  Wilken   as  instrumental   in  prompting   the                                                               
Department  of  Education and  Early  Development  (DOE) and  the                                                               
State Board  of Education "to  actually propose  regulations that                                                               
will  regulate these  boarding  schools". Representative  Coghill                                                               
viewed student  attendance at a  boarding school "as an  issue of                                                               
choice, and  an opportunity  for students all  over the  State to                                                               
enter into a  program that can basically change  their life". For                                                               
example,  the Nenana  Boarding School  graduated  14 students  in                                                               
2005:  11  of  those   graduates  continued  their  postsecondary                                                               
education with  financial assistance; two enlisted  in the United                                                               
States  Marines,  and  one  entered the  Job  Corps.  The  entire                                                               
graduating class  improved their life "and  became productive on-                                                               
going citizens".                                                                                                                
Ms.  Moss  stated that  Version  "C"  would allow  any  Statewide                                                               
Secondary Residential  Program (SSRP), commonly referred  to as a                                                               
boarding  school, established  prior to  January 1,  2005, to  be                                                               
reimbursed  for  operating  the  residential  program  through  a                                                               
stipend.  To qualify  for  this  program, the  SSRP  must have  a                                                               
suitable  student  dormitory, daily  access  to  a public  school                                                               
offering grades nine  through 12, and be a full  time school. The                                                               
stipend rate would be determined  by the DOE with the stipulation                                                               
that it could not to exceed  the statutory limits as specified in                                                               
Section 1(b)(2) lines 8 through 12 of Version "C".                                                                              
Ms.  Moss  stated  that  Version  "C"  also  defined  what  would                                                               
constitute  a  school  district  and  what  would  qualify  as  a                                                               
district-operated  Statewide  Residential  Educational  Programs.                                                               
Furthermore,  Version  "C"  would align  language  with  existing                                                               
regulations. An  effective date of  July 1, 2006 is  specified in                                                               
the bill.                                                                                                                       
10:18:51 AM                                                                                                                   
Senator Dyson  asked whether the bill's  sponsor was "comfortable                                                               
with the changes" included in Version "C".                                                                                      
Ms. Moss affirmed he was.                                                                                                       
Senator Dyson  asked whether the  sponsor considered the  $20 per                                                               
student per  day stipend  adequate to feed,  clothe, and  house a                                                               
student at the school.                                                                                                          
Ms. Moss  responded in  the negative.  The sponsor  believed that                                                               
students' parents  and school districts should  contribute toward                                                               
the expense of  the program. Thus, the stipend is  "a portion" of                                                               
the actual costs.                                                                                                               
Senator Dyson acknowledged.                                                                                                     
Senator Bunde understood the stipend  would be paid to the school                                                               
district rather than to the individual.                                                                                         
Ms. Moss affirmed.                                                                                                              
Senator Bunde  asked regarding the  provision that  would provide                                                               
each student a  round trip ticket to the school,  as he felt that                                                               
requiring a  student to personally  "buy-in" would result  in the                                                               
student  being  "more dedicated"  to  the  endeavor. Requiring  a                                                               
student  to  be  responsible  for  their  travel  expenses  might                                                               
further their "incentive to achieve".                                                                                           
Ms. Moss responded  that the majority of students  who attend the                                                               
schools live  in remote  areas of  the State,  thus "the  cost of                                                               
travel is  fairly expensive". While  a student might make  two or                                                               
three  trips  home  during  a   school  year,  the  school  would                                                               
compensate  for only  one round-trip  ticket. The  travel expense                                                               
would amount "to only a small part" of the total student cost.                                                                  
Senator  Bunde  viewed  the  round-trip  ticket  offering  as  "a                                                               
marketing tool:  come to  our school  and we'll  give you  a free                                                               
trip."  The provision  to pay  for the  round-trip ticket  was of                                                               
concern to him.                                                                                                                 
Co-Chair Green  noted that,  in addition to  the stipend  and the                                                               
trip, the  State's Base Student Allocation  (BSA) formula funding                                                               
would also be applicable.                                                                                                       
Ms. Moss responded in the affirmative.                                                                                          
10:21:46 AM                                                                                                                   
Co-Chair  Wilken pointed  out  that the  inclusion  of the  Lower                                                               
Kuskokwim  in   the  Residential   School  Program   details,  as                                                               
specified on page 2 of the DOE  fiscal note #2, dated May 2, 2006                                                               
was an error,  as "the Bethel program was no  longer part of this                                                               
10:22:10 AM                                                                                                                   
EDDY  JEANS, Director,  School Finance,  Department of  Education                                                               
and Early Development, affirmed.  The Department would revise the                                                               
fiscal note to reflect the  removal of the Bethel Lower Kuskokwim                                                               
School from the Residential Program.                                                                                            
Co-Chair Green  acknowledged that  a corrected fiscal  note would                                                               
be developed.                                                                                                                   
Co-Chair Wilken  shared that  a few years  prior, because  of his                                                               
concerns about the  boarding school program, he  had been accused                                                               
of eliminating State  funding for the Nenana  Boarding School. To                                                               
that  point, he  appreciated Representative  Coghill, Ms.  Moss',                                                               
and  the  Department's  efforts   to  address  his  concerns,  as                                                               
evidenced  by  the  inclusion  of the  phrase  "approved  by  the                                                               
department under regulations"  in Section 1, Article  2(a) page 1                                                               
on  line 9  of Version  "C";  specifically the  inclusion of  the                                                               
reference  to State  regulations. He  displayed a  compilation of                                                               
DOE regulations  [copy not provided], which  were currently under                                                               
review. Because of the State  Board of Education's lack of action                                                               
on  overseeing  the  boarding   school  program,  the  Department                                                               
updated  regulations and  developed criteria,  which must  be met                                                               
before someone  could establish a  boarding school program.  As a                                                               
result,  the  State  could  "analyze whether  it's  in  the  best                                                               
interest  of  the  State"  to  allow  the  formation  of  another                                                               
boarding school program.                                                                                                        
10:23:40 AM                                                                                                                   
Co-Chair  Wilken appreciated  the  endeavor to  replace the  term                                                               
"boarding school" with Secondary School Residential Program.                                                                    
Co-Chair  Wilken warned  that the  Federal No  Child Left  Behind                                                               
(NCLB) program  would force the  State to change its  approach to                                                               
education. Many  outlying communities might be  unable to provide                                                               
a  curriculum  and  education  that would  allow  a  student  "to                                                               
perform on the world stage".  Thus, some students might be forced                                                               
to participate in  such things as a SSRP. One  area of concern is                                                               
the negative  impact this would  have on a community  desiring to                                                               
keep  their youth  in  their community.  Another  concern is  one                                                               
relating to  economic development.  State facilities such  as the                                                             
King Career Center  in Anchorage, the Hutchison  Career Center in                                                           
Fairbanks, and  vocational technical  schools in  Kotzebue, Nome,                                                               
Bethel, Seward,  and Galena should  be developed  in anticipation                                                               
of  the pressure  to  meet  NCLB standards.  To  that point,  his                                                               
recent decision not to support  funding for the St. Mary's school                                                               
in  the  FY 07  capital  budget  was  a  difficult one,  as  that                                                               
community was attempting "to do  exactly" what is being discussed                                                               
in this bill.                                                                                                                   
Co-Chair  Wilken  stated  that  were the  proposed  DOE  boarding                                                               
school regulations  not adopted as presented,  the discussions on                                                               
this issue  would continue during  the next  Legislative session.                                                               
The  regulations  are  "good" and  have  widespread  support.  He                                                               
supported the bill  and the sponsor's "efforts to take  us to the                                                               
next step in rural education".                                                                                                  
10:25:58 AM                                                                                                                   
Senator  Bunde informed  the Committee  he would  be offering  an                                                               
amendment to  the bill  that would provide  the funds  to address                                                               
the one  million dollar  fiscal impact  reflected in  fiscal note                                                               
Co-Chair   Green  removed   her   objection   to  the   committee                                                               
Without further objection, committee  substitute, Version "C" was                                                               
ADOPTED as the working document.                                                                                                
Amendment #1: This amendment deletes  all language in Sec. 5 line                                                               
28 of  CS HB 16(RLS) and  replaces it with the  following. [NOTE:                                                               
The amendment must be conformed to Version "C".]                                                                                
     Sec.  5.  The uncodified  law  of  the  State of  Alaska  is                                                               
     amended by adding a new section to read:                                                                                   
          CONTINGENT EFFECT OF SECTIONS 1-4. Sections 1 -4 of                                                                   
     this  Act  are  contingent  on the  passage  by  the  Second                                                               
     Regular   Session   of   the  Twenty-Fourth   Alaska   State                                                               
     Legislature and  enactment into law  of a version of  SB 112                                                               
     that imposes a tax on  residents of and individuals employed                                                               
     in regional educational attendance areas.                                                                                  
     Sec. 6. If  sections 1-4 of this Act take  effect, they take                                                               
     effect on the  effective date of a version of  SB 112 passed                                                               
     by the  Twenty-Fourth Alaska  State Legislature  and enacted                                                               
     into law that imposes a  tax on residents of and individuals                                                               
     employed in regional educational attendance areas.                                                                         
     Sec.  7.  Sections   5  and  6  of  this   Act  take  effect                                                               
     immediately under AS 01.10.070(c).                                                                                         
Senator Bunde moved Amendment #1.                                                                                               
Senator Dyson objected.                                                                                                         
Senator  Bunde   agreed  with  Co-Chair   Wilken  that,   in  the                                                               
foreseeable  future, the  State would  experience an  increase in                                                               
the number of boarding schools.                                                                                                 
10:26:43 AM                                                                                                                   
Senator  Bunde proclaimed  that  many of  these boarding  schools                                                               
would  be located  in Rural  Education  Attendance Areas  (REAAs)                                                               
"where  the  folks unfortunately  haven't  chosen  to accept  the                                                               
personal  responsibility to  support  their schools".  Therefore,                                                               
this  amendment  would   impose  a  tax  that   would  assist  in                                                               
supporting the expenses of a boarding school in an REAA.                                                                        
10:27:22 AM                                                                                                                   
Ms.  Moss stated  the  bill's  sponsor would  be  opposed to  the                                                               
amendment.  "There already  is an  existing stipend  that's being                                                               
paid for  students that  come into  boarding schools."  This bill                                                               
would broaden the opportunity so  that more students could attend                                                               
such a school.  The sponsor would argue that the  tax proposed in                                                               
this amendment "is a whole  separate issue that doesn't belong in                                                               
this piece of legislation".                                                                                                     
Senator  Bunde was  concerned  that the  proposals  in this  bill                                                               
could provide  REAAs an opportunity  to "double-dip",  as schools                                                               
in those areas are already fully supported by State funds.                                                                      
Senator  Olson  voiced  "strong   objection"  to  the  amendment.                                                               
Support of it  would be contrary to the "spirit"  of the original                                                               
A roll call was taken on the motion.                                                                                            
IN FAVOR: Senator Bunde, Co-Chair Wilken and Co-Chair Green                                                                     
OPPOSED:  Senator  Hoffman,  Senator  Olson,  Senator  Dyson  and                                                               
Senator Stedman                                                                                                                 
The motion FAILED (3-4)                                                                                                         
Amendment #1 FAILED to be adopted.                                                                                              
Conceptual Amendment  #2: This amendment deletes  the entirety of                                                               
material in Section 1(b)(1) beginning  on page 2, lines 2 through                                                               
4, which reads as follows.                                                                                                      
     (1)  one  round  trip  on   the  least  expensive  means  of                                                               
     transportation between the  student's community of residence                                                               
     and  the  school during  the  school  year if  the  district                                                               
     expends money for the trip; and                                                                                            
Senator Bunde moved Amendment #2.                                                                                               
Senator Olson objected.                                                                                                         
Senator  Bunde  echoed  his earlier  comments  against  providing                                                               
travel  for students.  Eliminating the  free travel  provision is                                                               
"an  attempt  to   encourage  people  to  invest   in  their  own                                                               
education".  People  work  harder   when  they  have  a  personal                                                               
Ms. Moss  communicated that  the bill's  sponsor would  object to                                                               
the  amendment. While  waivers are  available in  hardship cases,                                                               
parents  of students  attending  the Nenana  Boarding School  are                                                               
currently required  to provide $1,000  toward their  child's room                                                               
and board. The students to whom  a round trip travel ticket would                                                               
be  provided  are  those  with  no road  access  to  the  school.                                                               
Attending the  school is  "an extra  hardship" for  such students                                                               
due  to the  expense and  distance that  must be  traveled. While                                                               
attending the  school is optional,  it should be  recognized that                                                               
the  school is  graduating students  who are  becoming productive                                                               
Alaskans, who otherwise might become "a burden to the State".                                                                   
10:30:41 AM                                                                                                                   
Senator  Bunde  voiced  concern that  instead  of  attending  the                                                               
school in  pursuit of furthering  their education,  some students                                                               
might view  the free travel  as an  opportunity to escape  from a                                                               
small town  or their parents.  "That would defeat the  purpose of                                                               
what the bill is trying to achieve."                                                                                            
Co-Chair Wilken  shared that the  round trip travel was  an issue                                                               
of  discussion during  the  development of  the  bill. The  State                                                               
currently provides a round trip  ticket to students attending the                                                               
Mt. Edgecumbe  School in  Sitka, and,  while the  Nenana Boarding                                                               
School  is  not exactly  the  same  model  as that  school,  "the                                                               
thought was"  that providing  a round trip  ticket to  the Nenana                                                               
Boarding School might alleviate  pressure on Mt. Edgecumbe, which                                                               
has a  waitlist of students.  In addition, the decision  was made                                                               
to  include  in   the  bill  the  requirement   that  the  "least                                                               
expensive" mode of transportation be utilized.                                                                                  
A roll call was taken on the motion.                                                                                            
IN FAVOR: Senator Bunde and Co-Chair Green                                                                                      
OPPOSED: Senator  Olson, Senator Hoffman, Senator  Dyson, Senator                                                               
Stedman and Co-Chair Wilken                                                                                                     
The motion FAILED (2-5)                                                                                                         
Conceptual Amendment #2 FAILED to be adopted.                                                                                   
10:33:03 AM                                                                                                                   
Mr.  Jeans communicated  that  the  Department worked  diligently                                                               
with the  State Board of  Education to develop  "regulations that                                                               
would limit the  number of communities that  could participate in                                                               
this  program"  to  the  communities of  Nenana  and  Galena.  In                                                               
addition, the proposed regulations  would require the State Board                                                               
of  Education to  determine  a need  and  an application  process                                                               
before allowing any  other school district to begin  to operate a                                                               
boarding school.  Furthermore, this legislation would  require an                                                               
additional  step to  be taken  in that  the Department  must seek                                                               
Legislative  approval  in  order   to  expand  the  program.  The                                                               
necessary safeguards would be in place.                                                                                         
Mr. Jeans  shared that  an annual report  on the  boarding school                                                               
program would  also be  required. The  report would  include such                                                               
things  as  the  number  of   students  applying,  accepted,  and                                                               
enrolling  in the  boarding school  program  as well  as the  Mt.                                                               
Edgecumbe   program.  The   data   would  be   shared  with   the                                                               
Co-Chair  Green recalled  that  the FY  07  capital budget  would                                                               
include  one  million dollars  each  for  the Galena  and  Nenana                                                               
boarding schools. She  asked whether the funds  specified in this                                                               
bill would be in addition to that money.                                                                                        
Ms. Moss  stated that  the money included  in the  capital budget                                                               
would be in  addition to the funding specified in  this bill. The                                                               
capital  budget  funds  would be  utilized  to  expand  dormitory                                                               
There  being no  further discussion,  Co-Chair Green  ordered the                                                               
bill HELD in Committee.                                                                                                         

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