Legislature(2013 - 2014)SENATE FINANCE 532

04/18/2014 01:30 PM FINANCE

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CS FOR HOUSE BILL NO. 278(FIN) am                                                                                             
     "An Act increasing the base  student allocation used in                                                                    
     the  formula for  state  funding  of public  education;                                                                    
     relating  to  the  exemption   from  jury  service  for                                                                    
     certain  teachers;  relating  to   the  powers  of  the                                                                    
     Department   of   Education  and   Early   Development;                                                                    
     relating to  high school  course credit  earned through                                                                    
     assessment;  relating  to school  performance  reports;                                                                    
     relating to  assessments; establishing a  public school                                                                    
     and  school   district  grading  system;   relating  to                                                                    
     charter  schools and  student transportation;  relating                                                                    
     to residential school  applications; relating to tenure                                                                    
     of  public school  teachers;  relating to  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                                                                    
     schools  operated by  a federal  agency; relating  to a                                                                    
     grant for  school districts; relating to  education tax                                                                    
     credits;   establishing  an   optional  municipal   tax                                                                    
     exemption for  privately owned real property  rented or                                                                    
     leased  for  use as  a  charter  school; requiring  the                                                                    
     Department of Administration to  provide a proposal for                                                                    
     a salary  and benefits  schedule for  school districts;                                                                    
     making  conforming  amendments;  and providing  for  an                                                                    
     effective date."                                                                                                           
1:46:40 PM                                                                                                                    
Co-Chair  Kelly  MOVED  to   ADOPT  the  proposed  committee                                                                    
substitute  for HB  278,  Work  Draft 28-GH2716\S  (Mischel,                                                                    
4/17/14) as  a working  document. There being  NO OBJECTION,                                                                    
it was so ordered.                                                                                                              
1:47:28 PM                                                                                                                    
AT EASE                                                                                                                         
1:52:02 PM                                                                                                                    
1:52:20 PM                                                                                                                    
Co-Chair Meyer  noted that education  was very  important to                                                                    
the committee  and that several  different Senate  bills had                                                                    
been  rolled into  the  current  committee substitute  (CS);                                                                    
some of the included bills  were sponsored by Senator Olson,                                                                    
Senator  Dunleavy, and  Senator Bishop.  He recalled  taking                                                                    
public testimony  during the formulation of  the legislation                                                                    
and offered  that there were  some things in CS  that people                                                                    
would like  and perhaps other  things that people  would not                                                                    
care for; however, he believed  that the bill was a balanced                                                                    
piece of  legislation that everyone could  support. He noted                                                                    
that  $100 million  had been  set aside  for bottom  line of                                                                    
education  in  the  bill, which  included  $100  million  in                                                                    
funding for  the next 3 out  years. He stated that  the base                                                                    
student  allocation  (BSA)  was  part  of  the  formula  for                                                                    
education  and  that the  CS  included  a study  that  would                                                                    
examine  how   to  better  improve  the   education  funding                                                                    
formula. He reiterated that the  committee had opted to keep                                                                    
the funding outside of the formula  in the new CS, but added                                                                    
that $100  million in funding  equated to around a  $400 BSA                                                                    
per student;  however, some  of that  funding would  be used                                                                    
for other programs and the BSA  would end up being closer to                                                                    
Co-Chair  Kelly  thought  that  the  money  was  distributed                                                                    
through the formula,  but that it was  allocated through the                                                                    
adjusted  average daily  membership  (AADM)  instead of  the                                                                    
BSA. He  concluded that the funding  was distributed through                                                                    
the formula but that it did not raise the BSA.                                                                                  
Co-Chair Meyer stated that Co-Chair Kelly was correct.                                                                          
1:56:28 PM                                                                                                                    
EDRA  MORLEDGE,  STAFF,  SENATOR KEVIN  MEYER,  presented  a                                                                    
sectional analysis  of the  CS (copy on  file) and  spoke to                                                                    
the changes from the House  version of the bill. She related                                                                    
that the  first change  in the  new CS was  in Section  2 on                                                                    
page  2, beginning  on line  23.  In the  first change,  the                                                                    
course credit  earned through mastery of  course content had                                                                    
been  reinserted in  this section;  this included  a student                                                                    
being able to  challenge out of one of the  core courses and                                                                    
allowed  one of  the courses  to simultaneously  qualify for                                                                    
the  Alaska  Performance  Scholarship (APS).  She  expounded                                                                    
that  the   core  courses  in  question   were  mathematics,                                                                    
language   arts,   science,   social  studies,   and   world                                                                    
Ms. Morledge  continued to speak  to the  sectional analysis                                                                    
and related that  the second change to the  bill occurred on                                                                    
Section 3  on page 3,  beginning on  line 6. The  change was                                                                    
related  to college  and  career  reediness assessments  and                                                                    
allowed a student to choose  between taking the SAT, ACT, or                                                                    
Work Keys within 2 years  of their graduation. She addressed                                                                    
the CS's  third change from  the House version; it  was also                                                                    
on page 3,  beginning on line 19 and  it effectively removed                                                                    
the  requirement  for  students  to  take  the  high  school                                                                    
graduation  qualifying exam  (HSGQE).  She  stated that  the                                                                    
next change  was on Section 7  on page 6, beginning  on line                                                                    
15 and  was funding  for internet  services. She  noted that                                                                    
the funding for  internet services was one of  the pieces of                                                                    
other  Senate  legislation that  had  been  rolled into  the                                                                    
Ms. Morledge  continued to address  a sectional  analysis of                                                                    
the bill and  related that the next change was  in Section 7                                                                    
on  page  6,  beginning  on  line 29.  The  change  was  the                                                                    
personalized  learning opportunity  grant program  and would                                                                    
be  administered through  the Association  of Alaska  School                                                                    
Boards; the  program would provide  technological equipotent                                                                    
and well as  technical support and training  for students in                                                                    
the use  of an electronic  device. The second change  was on                                                                    
Section 12  on page  11, beginning on  line 6;  language had                                                                    
been inserted  to ensure that  the 4  percent administrative                                                                    
fee cap that may be  charged by districts to charter schools                                                                    
would  not  include  costs related  to  rent  utilities  and                                                                    
maintenance. Also  included in Section 12  was language that                                                                    
began  on  line  14  which  ensured  that  funds  that  were                                                                    
generated by charter school student  were distributed to the                                                                    
charter schools for the student that generated the funds.                                                                       
Ms. Morledge  continued to present  a sectional  analysis of                                                                    
the bill  and stated that  there were changes in  Section 14                                                                    
on  page 12,  beginning on  line 9  to correspondence  study                                                                    
programs  and   individual  learning  plans;   this  section                                                                    
provided  requirements for  districts to  provide individual                                                                    
learning  plans for  students enrolled  in a  correspondence                                                                    
program. She added that Section  14 on page 13, beginning on                                                                    
line  2  had  been  changed   to  allow  the  Department  of                                                                    
Education and Early Development  (DEED) or a school district                                                                    
to provide an annual allotment to  a parent or guardian of a                                                                    
student  enrolled  in  a  correspondence  program  to  cover                                                                    
instructional  expenses. She  stated  that  the next  change                                                                    
could be found  in Section 20 on page 21,  beginning on line                                                                    
18 and  explained that it  pertained the  debt reimbursement                                                                    
program;  the  70/30  debt reimbursement  program  that  the                                                                    
state was  currently using was  being changed to  60/40. She                                                                    
added that the  second program that the  state was currently                                                                    
reimbursing at 60  percent had been changed  to reimburse at                                                                    
40 percent.                                                                                                                     
2:01:59 PM                                                                                                                    
Ms. Morledge continued  to speak to a  sectional analysis of                                                                    
the  bill  and related  that  the  next change  occurred  on                                                                    
Section 23 on  page 24; the residential  school stipends had                                                                    
been  increased. She  related that  the next  change was  in                                                                    
Section  24  and  that  language  had  been  added  so  that                                                                    
municipalities  could   voluntarily  contribute  up   to  23                                                                    
percent of  the total state  aid, including basic  need. She                                                                    
stated  that in  Section 25  on  line 27  state funding  for                                                                    
correspondence study  had increased  from 80 percent  of the                                                                    
average daily  membership (ADM) to  90 percent.  She pointed                                                                    
to Section  26 on the  top of page  25 and related  that the                                                                    
charter school  size factor threshold had  been reduced from                                                                    
150 students to 75 for  full funding for each student within                                                                    
the first 3  years of the their operation.  She discussed an                                                                    
additional change in  Section 29 on page 26, on  line 12 and                                                                    
stated that  the contribution  for the  Technical Vocational                                                                    
Education Program (TVEP) had been  raised from 15 percent to                                                                    
16 percent. She stated that  the current version of the bill                                                                    
kept  the  House  version  sunset date  of  2017  for  TVEP;                                                                    
additionally,  the allocations  had been  changed, Ilisagvik                                                                    
College had been  added to the program, and  there were some                                                                    
name corrections.                                                                                                               
Ms.  Morledge  stated  that  the  next  2  changes  were  to                                                                    
Sections 35  through 46  to the  education tax  credits. She                                                                    
related  that  the  only  2 changes  to  the  education  tax                                                                    
credits  sections  were  that non-profit  regional  training                                                                    
centers  and  apprentice  programs, as  well  as  non-profit                                                                    
organizations   that    provided   education   opportunities                                                                    
promoting  the legacy  of public  service contributions  had                                                                    
been added. She stated that  the next change was Sections 52                                                                    
and  53 beginning  on page  41, line  25; a  school district                                                                    
cost factor  study and a  school size factor study  had been                                                                    
added. She  stated that  the next change  was in  Section 54                                                                    
and explained  that beginning  on line  13, a  school design                                                                    
and  construction report  had been  added. She  related that                                                                    
another change  to the  current version of  the bill  was in                                                                    
Section 56  and explained that  the pilot project  to expand                                                                    
middle   school   science,  technology,   engineering,   and                                                                    
mathematics  education had  been added.  She stated  that on                                                                    
the last page  of the bill there had been  a provision added                                                                    
that allowed  students to receive a  retroactive issuance of                                                                    
their  high  school  diploma if  they  had  previously  been                                                                    
required to take the HSGQE.                                                                                                     
Co-Chair Meyer stated  that the bill was a  piece of omnibus                                                                    
legislation that  touched on  a lot  of different  areas. He                                                                    
thought that the legislation would  provide more choices for                                                                    
the  parents, as  well as  more resources  for teachers  and                                                                    
students;  the  legislation  incentivized the  districts  to                                                                    
operate  differently and  also  incentivized the  successful                                                                    
model  of residential  boarding schools.  He noted  that the                                                                    
legislation also  made the process  of opening up  a charter                                                                    
easier and  noted the lowered  threshold requirements  of 75                                                                    
from 150  students. He discussed  the $500  one-time stipend                                                                    
that went with  each student who attended  a charter school.                                                                    
He  pointed out  that Senator  Dunleavy could  speak to  the                                                                    
success  and popularity  of the  correspondence schools  and                                                                    
offered that  the legislation was  attempting to  target the                                                                    
classroom.  He stated  that the  Alaska  Native Science  and                                                                    
Engineering Program  (ANSEP) had  also been expanded  in the                                                                    
bill to encompass middle schools.                                                                                               
2:08:38 PM                                                                                                                    
MICHAEL  HANLEY, COMMISSIONER,  DEPARTMENT OF  EDUCATION AND                                                                    
EARLY DEVELOPMENT,  stated that he the  appreciated the work                                                                    
of the  Senate on  the bill and  recalled that  the governor                                                                    
had previously stated  the need for changes  in education in                                                                    
order  to improve  outcomes, remove  barriers, and  increase                                                                    
opportunity  for students.  He remembers  that the  governor                                                                    
also recognized  additional funding was needed  for Alaska's                                                                    
school districts. He  thought that the Senate  had taken the                                                                    
governor's  initial ideas  and had  built them  into a  more                                                                    
comprehensive  bill  that  would have  positive  impacts  on                                                                    
Alaska's children.                                                                                                              
Co-Chair Meyer inquired if there  was anything in particular                                                                    
within  the  bill  that would  be  difficult  to  implement.                                                                    
Commissioner  Hanley   responded  that  anytime   there  was                                                                    
change, it was  difficult to implement; however,  he did not                                                                    
see any  particular challenges regarding  implementation for                                                                    
the department. He  related that a lot had  change in Alaska                                                                    
over the last several  years regarding raising standards and                                                                    
teacher  evaluations.   He  thought  that   the  legislation                                                                    
represented positive  opportunity without a lot  of mandated                                                                    
or  unfunded  responsibilities  for  districts.  He  thought                                                                    
there would  need to  be some small  changes to  the current                                                                    
system  and some  new responsibilities,  but that  they were                                                                    
worth it.  He thought  that repealing  the high  school exit                                                                    
exam was  significant and would  provide several  extra days                                                                    
of learning  time for the  state's students. He  opined that                                                                    
the removal  of some of  the barriers was a  positive thing.                                                                    
He concluded that  he did not see anything in  the bill that                                                                    
seemed to cause red flags for him or the school districts.                                                                      
Vice-Chair  Fairclough  requested   an  explanation  of  the                                                                    
changes in the  bill that related to  the debt reimbursement                                                                    
program  and if  there would  be transitional  opportunities                                                                    
for those  who might already  be in the  queue. Commissioner                                                                    
Hanley replied that  he had not seen  the language regarding                                                                    
the  transitional   aspect  of   the  bill,  but   that  his                                                                    
understanding was  that the debt  had already  been acquired                                                                    
and bonds that  had already gone out were  under the current                                                                    
system; bonds going  forward after the bill  passed would be                                                                    
under this  new system. He  anticipated that after  the bill                                                                    
passed,  the state's  responsibility for  the ongoing  debts                                                                    
would become  less and that  there would be  some rethinking                                                                    
regarding  putting forward  projects that  would cost  local                                                                    
municipalities  a  little  more money;  additionally,  there                                                                    
might be some more review  into projects regarding what went                                                                    
into them, which might lead to more frugal designs.                                                                             
2:13:18 PM                                                                                                                    
Vice-Chair Fairclough directed  the committee's attention to                                                                    
Sections 17 and  18 on page 21 of the  bill and related that                                                                    
she wanted to be sure  that municipalities that had gone out                                                                    
to  bond had  transitional ability.  She wanted  language in                                                                    
the  CS or  an  amendment that  recognized  that there  were                                                                    
people who may  qualify for debt reimbursement  even if they                                                                    
had  not   submitted  the  issue   to  voters   and  whether                                                                    
reimbursement   under  the   old  plan   was  desired.   Her                                                                    
understanding  was  that  if   the  department  had  already                                                                    
qualified a school district for  a project, it would qualify                                                                    
under the  old reimbursement  plan instead  of the  new one;                                                                    
she  requested an  explanation of  whether  the bill  stated                                                                    
that or not.  Commissioner Hanley believed that  lines 7 and                                                                    
8  spoke to  the  issue  and pointed  out  that those  lines                                                                    
discussed  other indebtedness  that  was  authorized by  the                                                                    
qualified  voters of  the municipality  on or  after October                                                                    
2006, but before  June 30, 2014. He expounded  that prior to                                                                    
a project coming  to the state  for  reimbursement, it would                                                                    
need to  authorized by  qualified voters  prior to  June 30,                                                                    
2014;   he  thought   that   this     addressed   Vice-Chair                                                                    
Fairclough's question.                                                                                                          
Vice-Chair Fairclough  noted that it addressed  her question                                                                    
and the  needs of Anchorage  because its bonds were  held in                                                                    
April;   however,  she   was  unsure   if  the   legislation                                                                    
anticipated others  who had  already qualified  and expected                                                                    
to  take  a  particular   project  before  the  voters.  She                                                                    
wondered if people  who had already qualified  for a project                                                                    
would be entitled to the reduced rate.                                                                                          
Co-Chair  Meyer  welcomed  Senator  Hollis  French  who  was                                                                    
present  in committee.  He stated  that the  current version                                                                    
was the Senate  Finance Committee's first CS  and that there                                                                    
would  be  changes to  the  bill.  He requested  members  to                                                                    
provide desired changes to his office by 6 p.m.                                                                                 
Senator  Bishop  discussed  duel  credits  and  articulation                                                                    
agreements regarding TVEP. He  requested an affirmation that                                                                    
Commissioner Hanley would work  with the commissioner of the                                                                    
Department   of  Labor   and   Workforce  Development,   the                                                                    
president of the University of  Alaska, and the districts on                                                                    
duel  credits with  TVEP recipients  in order  to all  allow                                                                    
more Alaskan students to enter  into the university at their                                                                    
freshmen  or  sophomore  year. Commissioner  Hanley  replied                                                                    
that  the  duel credits  were  critical  and that  DEED  was                                                                    
training Alaskan  students for  Alaskan jobs, many  of which                                                                    
were directly tied to these types of trainings.                                                                                 
2:17:15 PM                                                                                                                    
Senator Dunleavy  wanted it  on the  record that  his office                                                                    
and the  office of  Commissioner Hanley had  worked together                                                                    
on a  section of the bill  that was referred to  as the home                                                                    
school correspondence section. He  thought that language had                                                                    
been developed by the two  offices in the section that would                                                                    
work for  kids, parents,  teachers, and school  districts in                                                                    
the  state.   Commissioner  Hanley  surmised   that  Senator                                                                    
Dunleavy was referencing the language  on Section 14 on page                                                                    
12  of  the  bill,  which dealt  with  correspondence  study                                                                    
programs and  individual learning  plans. He noted  that the                                                                    
first part  of the  language on  page 12  solidified current                                                                    
regulatory language into statute.  He explained that some of                                                                    
the language was  not new, but it built on  other ideas such                                                                    
as  student  allotments  being  allowed  to  roll  over.  He                                                                    
confirmed  that he  had his  office  had conversations  that                                                                    
were focused  on money being spent  for educational purposes                                                                    
in  a  relatively flexible  manner.  He  added that  he  and                                                                    
Senator Dunleavy  did agree on  the current language  in the                                                                    
section being referenced.                                                                                                       
Vice-Chair  Fairclough  recalled  discussions  the  previous                                                                    
summer   in  the   Senate  Finance   Subcommittee  regarding                                                                    
repealing   the  HSGQE.   She  noted   that  the   bill  was                                                                    
reinserting the  SATs, the ACTs,  and other  placements. She                                                                    
wondered if there had  been considerations regarding setting                                                                    
a testing  level so  that the  state could  measure outcomes                                                                    
for  students. She  inquired if  there  was a  level on  the                                                                    
tests that would  be similar to what  students qualified for                                                                    
the in the APS that could  be used as a measurement tool for                                                                    
how  Alaskan students  were  achieving. Commissioner  Hanley                                                                    
replied that  the department  had not  looked at  bringing a                                                                    
separate cut score on to  the assessments. He noted that the                                                                    
department  was   moving  from   high  stakes  exam   to  an                                                                    
informative  tool  that  was intended  to  inform  students,                                                                    
parents,  counselors,  and  high   schools  of  a  student's                                                                    
readiness  for  college. He  stated  that  there were  other                                                                    
tools in place already  to measure a student's proficiencies                                                                    
regarding standards; the department  also had the cut scores                                                                    
for different levels of the APS.                                                                                                
Vice-Chair  Fairclough  noted  that  she had  not  yet  read                                                                    
through the entirety  of the new CS and  inquired how tenure                                                                    
was addressed.  Co-Chair Meyer replied  that the  tenure was                                                                    
not changed from the House version of the bill.                                                                                 
Commissioner Hanley  addressed the fiscal notes  attached to                                                                    
the bill and spoke to a  4 page spread sheet that showed the                                                                    
fiscal impacts of each section  (copy on file). He discussed                                                                    
Section  3 of  the bill  which dealt  with the  ACT and  SAT                                                                    
tests and pointed  out that the fiscal note  attached to the                                                                    
Section was for $525,000. He  noted the removal of the HSGQE                                                                    
in  Section  4  created  a decrement  of  $2.7  million.  He                                                                    
discussed  Section  7  and  stated   that  the  funding  for                                                                    
internet  services had  been slightly  changed from  Senator                                                                    
Olson's bill;  it no  longer added 10  percent, but  got all                                                                    
the schools up to 10  megabits. He stated that DEED's latest                                                                    
analysis  of the  internet  services had  the  cost at  $7.3                                                                    
million. He  discussed the  1:1 Digital  Learning Initiative                                                                    
and  stated that  the  fiscal note  for  that was  currently                                                                    
indeterminate.  He   added  that  the  department   did  not                                                                    
currently have the  ability to determine the  exact costs of                                                                    
the 1 to 1 initiative.                                                                                                          
2:23:45 PM                                                                                                                    
Co-Chair Meyer  requested an explanation of  the 1:1 Digital                                                                    
Learning Initiative. Senator Dunleavy  explained that it was                                                                    
a program  that would  get Ipads  and electronic  devices in                                                                    
the  hands of  teachers and  students in  order focus  on an                                                                    
approach  to education  that encompassed  modern technology,                                                                    
as well  as modern and  online course work. He  thought that                                                                    
estimates  of  the costs  for  the  program ranged  from  $3                                                                    
million to $5 million.                                                                                                          
Co-Chair  Meyer noted  that the  costs for  the 1:1  Digital                                                                    
Learning  Initiative were  still  unknown, but  that it  was                                                                    
expected to be between $3 million to $5 million.                                                                                
Commissioner Hanley  pointed out  that there were  models of                                                                    
IPads  out there,  but that  there were  other vendors  that                                                                    
were interested  in the initiative.  He added that  it would                                                                    
not  involve  strictly   apple  products.  Senator  Dunleavy                                                                    
clarified  that he  used the  brand name  IPad sometimes  in                                                                    
referenced to all kinds of electronic tablets.                                                                                  
Co-Chair  Meyer   observed  that   the  committee   was  not                                                                    
promoting one company over another.                                                                                             
Commissioner Hanley  continued to  address the  spread sheet                                                                    
and noted that there was an  item in the budget for $750,000                                                                    
for the innovative approach to learning grants.                                                                                 
Co-Chair Meyer  requested an  explanation of  the innovative                                                                    
approach  to  learning  grants. Senator  Dunleavy  explained                                                                    
that  it was  a granting  opportunity for  school districts,                                                                    
especially for  some of the  smaller one to bring  a concept                                                                    
to DEED  for application  for a  planning grant.  He related                                                                    
that  the grant  would  allow districts  that  had a  worthy                                                                    
concept  to  contract research  to  more  fully explore  the                                                                    
idea; then  it could  be submitted to  DEED for  scoring and                                                                    
examination. If the  idea had merit at this  point, it would                                                                    
be  brought back  before the  legislature.  He related  that                                                                    
this  concept  was opposed  to  the  current method  of  the                                                                    
districts coming  to the  state on  an individual  basis and                                                                    
potentially asking for  a multi-million dollar appropriation                                                                    
for a program that might not work.                                                                                              
Commissioner Hanley spoke to page  2 of the spread sheet and                                                                    
referenced  Section  13 of  the  bill,  which addressed  the                                                                    
Charter School Grant  Program; the fiscal note  for this was                                                                    
for $168,000  and was for  charter schools that  began after                                                                    
the  bill was  passed.  He  pointed to  Section  23 and  the                                                                    
residential stipends and related  that $2.2 million was what                                                                    
DEED believed was close to the actual costs.                                                                                    
2:28:04 PM                                                                                                                    
Commissioner Hanley spoke to page  3 of the spread sheet and                                                                    
section  25; the  section  moved  the correspondence  school                                                                    
students from a .8 to a .9  and had a fiscal impact of $12.3                                                                    
million. He  noted that the  annual cost of the  change from                                                                    
.8  to .9  was about  $6.15 million  but that  there was  an                                                                    
obligation to have forward funding.                                                                                             
Co-Chair  Meyer  inquired  if  the  funding  was  for  $12.3                                                                    
million  for 2  years.  Commissioner Hanley  replied in  the                                                                    
affirmative  and stated  that it  included the  current year                                                                    
and 1 additional year of forward funding.                                                                                       
Commissioner Hanley  stated that Section 26  was the charter                                                                    
school size factor and that  it allowed charter schools that                                                                    
fell  below  150  students  to   continue  to  receive  full                                                                    
funding; it  changed the minimum  number to 75  students. He                                                                    
added that  the change  would currently only  impact several                                                                    
schools  and that  it would  have a  cost of  $483,000; DEED                                                                    
believed  that this  would help  charter  schools that  were                                                                    
starting  up and  would  enable people  to  start a  smaller                                                                    
school  with  full  funding  without  having  to  reach  150                                                                    
students. He  directed the committee's  attention to  page 4                                                                    
of the  spreadsheet and Sections  52 and 53;  these sections                                                                    
dealt with the  studies for school district  cost factor and                                                                    
the school  size factor. He  stated that the 2  studies were                                                                    
both  Legislative Budget  and Audit  components and  that he                                                                    
had not  seen a fiscal note  for those. He guessed  that the                                                                    
study costs from  Sections 52 and 53 would  be comparable to                                                                    
the  school design  and construction  report in  Section 54,                                                                    
which had a cost of $620,000.                                                                                                   
Commissioner Hanley  continued to  address the  spread sheet                                                                    
and   stated  that   Section  55   was  the   Department  of                                                                    
Administration's  (DOA) salary  and  benefits proposal;  the                                                                    
cost for this was $610,000.  He stated that the ANSEP middle                                                                    
school pilot  program had a cost  of $3 million and  that it                                                                    
would engage 8th graders with  a vision into high school and                                                                    
Co-Chair  Meyer noted  that the  commissioner had  discussed                                                                    
ANSEP  and  inquired  if  it  was  limited  to  science  and                                                                    
engineering.  Commissioner Hanley  replied that  the primary                                                                    
focus of ANSEP was science and engineering.                                                                                     
2:32:04 PM                                                                                                                    
Co-Chair  Meyer  inquired if  math  was  a focus  of  ANSEP.                                                                    
Commissioner  Hanley  replied  that  math  was  incorporated                                                                    
throughout the  program and added  that students in  it were                                                                    
engaged  in  high-level  calculus, trigonometry,  and  other                                                                    
math courses.                                                                                                                   
Senator Bishop  observed that ANSEP  was another  example of                                                                    
where  the  state  would  want to  focus  on  duel  credits.                                                                    
Commissioner Hanley  responded in the affirmative  and added                                                                    
that  it  was where  the  conversation  had been  originally                                                                    
brought to light.                                                                                                               
Senator Dunleavy  noted that the  duel credits  involved the                                                                    
high school  component of  ANSEP, but  added that  the pilot                                                                    
program in  reference reached into middle  school. He stated                                                                    
that  the goal  for  the  pilot program  was  to get  middle                                                                    
school  students an  Algebra  1  background before  entering                                                                    
high school.                                                                                                                    
Commissioner  Hanley   related  that   there  was   a  small                                                                    
component being  added on Section 5  on the 1st page  of the                                                                    
spreadsheet. He explained that the  change added a component                                                                    
to  data for  students  who  had parents  that  were in  the                                                                    
active military and  that it had a cost of  about $80,000 in                                                                    
the current year;  beyond the current year,  the fiscal note                                                                    
had a cost  of $10,000. He stated that the  TVEP portion was                                                                    
switching  from 1.5  percent to  1.6  percent represented  a                                                                    
$926,000 fiscal note; that change  could be found in Section                                                                    
Co-Chair Meyer noted that the  funding for the TVEP increase                                                                    
would come from  a trust and thought that there  would be no                                                                    
additional   cost  to   the  workers.   Commissioner  Hanley                                                                    
deferred  the question  to  Commissioner  Blumer and  stated                                                                    
that it was a labor component.                                                                                                  
Commissioner Hanley recalled  Co-Chair Meyer's comments that                                                                    
the bill had set aside  $100 million for education and noted                                                                    
that if  you pulled  the spreadsheet's components,  the bill                                                                    
would be in  the $65 million to $70 million  range. He added                                                                    
that the spreadsheet contained somewhere  in the ballpark of                                                                    
$30  million to  $35  million in  components,  but that  the                                                                    
range could be solidified shortly.                                                                                              
2:35:59 PM                                                                                                                    
Co-Chair  Meyer thought  that  the bill  was  closer to  $75                                                                    
million without the  components, but noted that  there was a                                                                    
lot  of  variance  in  the estimates.  He  stated  that  the                                                                    
estimate  for computers  was $3  million to  $5 million  and                                                                    
that the  correspondence represented 2 years  of funding. He                                                                    
inquired  if  the  bill  represented   a  $300  BSA  if  the                                                                    
spreadsheet's components  were removed.  Commissioner Hanley                                                                    
replied that legislation  seemed to be in the  ballpark of a                                                                    
$300 BSA.                                                                                                                       
DIANE   BLUMER,  COMMISSIONER,   DEPARTMENT  OF   LABOR  AND                                                                    
WORKFORCE  DEVELOPMENT,  stated  that   there  was  a  small                                                                    
increase to the TVEP component  and related that the funding                                                                    
came  out UI  Trust Fund.  She  related that  over the  past                                                                    
several years,  the amount coming  out had .15  percent, but                                                                    
that it was  being increased to .16  percent; however, there                                                                    
was a  slight cost to  employers, which was about  $2.40 per                                                                    
year,  per   employee.  She  related  that   the  effect  on                                                                    
employers represented the best  estimate by the Research and                                                                    
Analysis Division and  that it limited the  impact of adding                                                                    
another regional training to the funding source.                                                                                
Co-Chair   Meyer  inquired   if   the  Commissioner   Blumer                                                                    
supported  the change  to the  TVEP component.  Commissioner                                                                    
Blumer replied  that she had  spoken with Senator  Bishop on                                                                    
the issue and  that the administration would  prefer to move                                                                    
forward with the governor's  proposed language; however, the                                                                    
administration  understood  that  adding  Ilisagvik  College                                                                    
would  impact  other  recipients  and  it  agreed  with  the                                                                    
2:39:57 PM                                                                                                                    
Vice-Chair  Fairclough thought  that  if  the committee  was                                                                    
going to conduct a salary  and benefit proposal with DOA, it                                                                    
should  examine  what  the   Legislative  Budget  and  Audit                                                                    
Committee  had already  paid for  in the  form of  a benefit                                                                    
analysis. She  wanted to be  sure that the dollars  would be                                                                    
used wisely.  She wondered whether  DOA was the  right place                                                                    
to  conduct   the  survey  or   if  it  should   be  through                                                                    
legislative  budget and  audit. She  noted that  legislative                                                                    
budget  and  audit  typically partnered  with  the  National                                                                    
Conference of  State Legislatures, which had  conducted like                                                                    
surveys many times  in the past. She was  unsure if $610,000                                                                    
was the best available price for the survey.                                                                                    
Co-Chair Meyer  liked the  1:1 Digital  Learning Initiative,                                                                    
as well  as the focus on  science and math. He  thought that                                                                    
the bill represented a good package.                                                                                            
Senator Dunleavy  requested that  the Association  of Alaska                                                                    
School Boards (AASB) briefly comment on the bill.                                                                               
2:42:12 PM                                                                                                                    
Senator   Bishop    requested   Commissioner    Hanley   and                                                                    
Commissioner  Blumer to  take  a look  at  the ANSEP  middle                                                                    
school  pilot program  to see  if it  could be  incorporated                                                                    
with the Career and Technical Education Program.                                                                                
Senator Dunleavy requested a  walkthrough of the procurement                                                                    
procedures of  the l:1  Digital Learning  Initiative because                                                                    
it would  involve a number  of school  districts, companies,                                                                    
and platforms.  He noted  that there  might concerns  on the                                                                    
part of school districts,  particularly with a district that                                                                    
may not be part of the AASB.                                                                                                    
NORM WOOTEN,  DIRECTOR, SCHOOL IMPROVEMENT  AND GOVERNMENTAL                                                                    
RELATIONS,  ASSOCIATION  OF  ALASKA  SCHOOL  BOARDS  (AASB),                                                                    
explained  that   purpose  of   the  1:1   Digital  Learning                                                                    
Initiative was to increase student  achievement and that the                                                                    
association  was not  dedicated to  a particular  vendor. He                                                                    
noted that student achievement would  remain AASB's focus at                                                                    
all  times   and  that  it  would   ensure  the  competitive                                                                    
processes  were followed  by  requiring  local districts  to                                                                    
comply with board policies for procurement.                                                                                     
DR.  ROBERT   WHICKER,  DIRECTOR,  CONSORTIUM   FOR  DIGITAL                                                                    
LEARNING, ASSOCIATION  OF ALASKA  SCHOOL BOARDS,  added that                                                                    
AASB represented 49 of the  53 school districts and that the                                                                    
3  others out  of the  remaining  4 used  policies from  the                                                                    
association's  manual. He  stated that  the Aleutian  Region                                                                    
was the only school district that  was not part of AASB, but                                                                    
that  the Consortium  for Digital  Learning worked  with any                                                                    
school district  and school,  including charter  schools and                                                                    
home  school  support  programs.  He stated  that  when  the                                                                    
consortium conducted a project,  it made sure that districts                                                                    
were aware  of multiple vendors.  He reported that  in 2008,                                                                    
the consortium ran  a similar project to  the 1:1 initiative                                                                    
and that multiple vendors had  been used in that project. He                                                                    
stated  that honoring  local choice  would be  paramount and                                                                    
that  the  consortium  would  be  working  with  vendors  to                                                                    
identify what  fits; it would  be working with  districts to                                                                    
enable them  to know what  is available. He stated  that the                                                                    
consortium would  be holding webinars with  multiple vendors                                                                    
and that  there were  probably 4 vendors  in the  state that                                                                    
could be  participating in the  program. He stated  that the                                                                    
consortium  had been  conducting aggregate  orders with  the                                                                    
smaller  school districts  and had  been working  with Apple                                                                    
and Dell on those orders.  He added that the consortium also                                                                    
made sure  through the application  process that  the school                                                                    
districts had considered the multiple vendors.                                                                                  
2:47:21 PM                                                                                                                    
Vice-Chair Fairclough noted that  the Legislative Budget and                                                                    
Audit Committee  worked with procurement  a little  bit. She                                                                    
was not sure  that the plan that was  just outlined provided                                                                    
the best benefit for Alaska's  students, while it might lead                                                                    
to the most local choice.  She had something a bit different                                                                    
in mind and  wondered why the state could  not approach each                                                                    
1 of the 4 vendors to get  the lowest-cost bid for a unit as                                                                    
a group. She  offered that with 100,000  students, the state                                                                    
would not purchase all of  the products at once; however, it                                                                    
seemed  that negotiating  each  district individually  would                                                                    
not  secure  the best  cost  for  the  state. She  had  been                                                                    
supportive  of  the   money  to  be  moved   into  AASB  for                                                                    
distribution because  she thought  that the buying  power of                                                                    
the state  would be  used in  the negotiations.  She thought                                                                    
that  a survey  of districts  should first  be conducted  to                                                                    
determine what the  software capacity was and  that the AASB                                                                    
would negotiate  with all 4  contractors; at this  point the                                                                    
school  districts could  buy through  AASB versus  having 54                                                                    
procurement  processes.  She  offered that  maybe  the  best                                                                    
price  possible  was  already   achieved  and  requested  an                                                                    
explanation.  Dr. Whicker  replied that  the Consortium  for                                                                    
Digital Learning  had been  conducting aggregate  orders for                                                                    
small school  districts for several  years and  that vendors                                                                    
recognized  the  consortium  as   the  central  agency;  the                                                                    
consortium  negotiated the  price with  the vendors  and had                                                                    
sometimes  been  able  to  secure  ultra-competitive  prices                                                                    
because  of  that.  He  related   that  the  current  method                                                                    
streamlined purchases  and had enabled getting  more devices                                                                    
into school;  furthermore, the consortium had  been tracking                                                                    
the type of discounts that  it had been getting in aggregate                                                                    
orders and it  had determined that it was as  good as anyone                                                                    
else had been able to achieve.                                                                                                  
Vice-Chair  Fairclough related  a hypothetical  example that                                                                    
the state was quoted $500 for  one unit and $495 per unit if                                                                    
1,000  units were  purchased. She  inquired if  every school                                                                    
would receive the discount whether  it purchased one unit or                                                                    
500. Dr. Whicker replied in  the affirmative, but added that                                                                    
the  $495 would  be different  and that  it depended  on the                                                                    
type  of equipment.  He  stated that  if  a small  southeast                                                                    
school  district and  Fairbanks were  put into  an aggregate                                                                    
order, all  of them would  be lumped together and  the small                                                                    
district would receive the same price as the large one.                                                                         
Vice-Chair  Fairclough thought  it  seemed  like a  discount                                                                    
would be  achieved if a  contract was  set up for  a certain                                                                    
number,  but was  purchased in  an incremental  fashion. She                                                                    
expounded that  she thought there  would be a  price savings                                                                    
between 1, 10, 100, 1000,  and 10,000 units. She wondered if                                                                    
the   consortium  had   considered  consulting   the  school                                                                    
districts to find  out the platforms and  services that they                                                                    
might  want instead  of having  54 different  platforms; she                                                                    
wondered if it should be standardized.                                                                                          
Vice-Chair  Fairclough stated  that  her  office had  worked                                                                    
Senator  Dunleavy and  his staff  on  the procurement  issue                                                                    
because  of a  concern  for  making sure  that  there was  a                                                                    
fairness aspect to competing. She  appreciated the effort to                                                                    
formulate  language  that  provided the  private  sector  an                                                                    
opportunity  to compete;  she thought  that  this was  being                                                                    
achieved, but was  unsure if the state would  be getting the                                                                    
highest value per unit with the current approach.                                                                               
2:53:30 PM                                                                                                                    
Co-Chair  Meyer  understood  that Vice-Chair  Fairclough  or                                                                    
Senator Dunleavy  had an amendment  to offer  that addressed                                                                    
the cost per unit  issue. Vice-Chair Fairclough replied that                                                                    
the amendment was being worked on currently.                                                                                    
Senator  Dunleavy understood  that the  54 school  districts                                                                    
would be grouped  per platform and product in  bulk and that                                                                    
the costs would  be driven down as a result.  He thought the                                                                    
state's   dollar  would   be  maximized   by  grouping   the                                                                    
districts' orders together and that  the cost per unit would                                                                    
go down as a result. He  stated that there was language that                                                                    
would  be  offered  in  the  amendment  process  that  would                                                                    
clarify the issue further.                                                                                                      
Senator Olson  inquired if the state's  procurement code was                                                                    
being handled.  Dr. Whicker replied that  the consortium was                                                                    
looking   at  a   competitive  bidding   process  that   was                                                                    
reasonable and  fair for the multiple  vendors. He concluded                                                                    
that local districts had different  codes that they followed                                                                    
and  that  the  consortium   would  be  working  with  those                                                                    
districts to ensure that things were fair.                                                                                      
Senator Olson  noted that on  Section 56  on page 42  of the                                                                    
bill,  the middle  school pilot  project  was discussed.  He                                                                    
recalled   that   the   project  was   identified   in   the                                                                    
presentation as being part of  ANSEP, but stated that he did                                                                    
not see ANSEP  named in the referenced  section. He inquired                                                                    
if he was missing something in  the legislation or if he had                                                                    
misunderstood  something.   Ms.  Morledge  replied   that  2                                                                    
amendments had  been received  on the  section and  that the                                                                    
pilot  project  was  geared towards  getting  students  into                                                                    
ANSEP; it  was intended  as a  pre-ANSEP program  that would                                                                    
move students towards ANSEP in middle schools.                                                                                  
Senator Olson inquired if the  pilot project was open to all                                                                    
students  or  just  Alaskan Native  students.  Ms.  Morledge                                                                    
replied that it would be open to all students.                                                                                  
2:57:29 PM                                                                                                                    
Senator  Hoffman referenced  page  42 of  the  bill and  the                                                                    
salaries and  benefit proposal.  He expressed  concerns that                                                                    
the different  salary structures  and incentives  for hiring                                                                    
teachers  could  not  be  put into  boxes  and  be  compared                                                                    
between  schools  districts  because  each  district  had  a                                                                    
different method  of trying  to hire  the best  teachers. He                                                                    
also expressed  concerns of higher  costs in rural  areas of                                                                    
the state. He inquired how  the study would be beneficial to                                                                    
the State  of Alaska  and be  fair to  all districts  of the                                                                    
state.  Commissioner   Hanley  responded  that   the  answer                                                                    
depended in  the vision  and will of  the committee  and the                                                                    
legislature and that  the implementation of the  study was a                                                                    
function  of DOA;  he  added  that it  fell  outside of  the                                                                    
purview of DEED.                                                                                                                
Commissioner   Hanley  queried   if   Senator  Hoffman   was                                                                    
inquiring what he personally thought  of how the study would                                                                    
be  beneficial and  fair  to all  of  the school  districts.                                                                    
Senator Hoffman  responded that it  may fall outside  of the                                                                    
purview of  DEED and  be part of  DOA's study;  however, the                                                                    
varied salary  structures that the  school districts  had to                                                                    
retain  competent teachers  had direct  implications to  the                                                                    
quality  of education  for all  of  students throughout  the                                                                    
State of Alaska. He thought  that Commissioner Hanley should                                                                    
be involved in  the study and that it should  not be left to                                                                    
DOA  because of  the  implications of  what  the salary  and                                                                    
benefits  proposal  would   recommend.  Commissioner  Hanley                                                                    
state "wholeheartedly"  that if the  state took on  the task                                                                    
of  choosing to  set and  implement state-wide  salaries, it                                                                    
would  have huge  implications. He  anticipated that  if the                                                                    
state  did   set  statewide  salaries,  it   would  be  done                                                                    
similarly  to  the geographic  cost  factor  and that  there                                                                    
would be a district as  a base; different regions would have                                                                    
different levels.                                                                                                               
Senator  Hoffman stated  that  another  factor with  setting                                                                    
salaries could involve a school  district that already had a                                                                    
hard time filling vacancies with  the current flexibility to                                                                    
increase its  salary structure.  He related  another example                                                                    
that a  school district  may want higher  achievement levels                                                                    
and would  want more competitive  salaries in order  to hire                                                                    
more competent teachers; he thought  that this would be hard                                                                    
to accomplish  when salaries  and benefits  were structured.                                                                    
He thought that it seemed  as though a statewide benefit and                                                                    
salary  structure  would  tie  school  districts'  hands  by                                                                    
removing a major avenue  for teacher retention. Commissioner                                                                    
Hanley  understood and  agreed.  He added  that anytime  the                                                                    
state made a decision for  all of the districts from Juneau,                                                                    
it needed  to do  so very cautiously.  He observed  that the                                                                    
risk was that  the state would not  adequately recognize the                                                                    
challenges of  particular regions, communities,  and schools                                                                    
that had the ability to set salary schedules.                                                                                   
Senator  Hoffman  stated  that from  his  viewpoint,  giving                                                                    
local   control   and    flexibility   to   these   regions,                                                                    
communities,  and schools  was  one of  the primary  reasons                                                                    
that  Alaska had  switched from  a state-operated  system to                                                                    
the current system.                                                                                                             
3:03:19 PM                                                                                                                    
Senator  Olson  inquired  how  opposed  Commissioner  Hanley                                                                    
would be  to removing Section  55 of the  bill. Commissioner                                                                    
Hanley replied  that he was  not married to  that particular                                                                    
Co-Chair Meyer  thought that the  component in  question had                                                                    
been added in the House and  had not come from the governor.                                                                    
Commissioner  Haley  responded  that   it  was  not  in  the                                                                    
governor's version of the bill.  Co-Chair Meyer assumed that                                                                    
Commissioner Hanley was not too  attached to that particular                                                                    
component. Commissioner Hanley replied that he was not.                                                                         
3:04:03 PM                                                                                                                    
AT EASE                                                                                                                         
3:32:58 PM                                                                                                                    
Co-Chair Meyer handed the gavel over to Co-Chair Kelly.                                                                         

Document Name Date/Time Subjects
HB 385 - Sectional Analysis.pdf SFIN 4/18/2014 1:30:00 PM
HB 385
HB385 - Chenault Transmittal Letter - PERS-TRS.pdf SFIN 4/18/2014 1:30:00 PM
HB 385
HB385_Supporting Document_BuckActuarialLetter-Governor's Proposal 041114.pdf SFIN 4/18/2014 1:30:00 PM
HB 385
HB278 Success of iPad Project.pdf SFIN 4/18/2014 1:30:00 PM
HB 278
HB278 Assurances for Personalized Learning Opportunity Grants.pdf SFIN 4/18/2014 1:30:00 PM
HB 278
HB 278 Sectional - S.pdf SFIN 4/18/2014 1:30:00 PM
HB 278
HB 278 Version S 4 17 14.pdf SFIN 4/18/2014 1:30:00 PM
HB 278
CSHB278CS(FIN)-UA-SYSBRA-4-18-14 - DRAFT.pdf SFIN 4/18/2014 1:30:00 PM
HB 278
HB278SCSCS-EED-K12-4-17-14-DRAFT.pdf SFIN 4/18/2014 1:30:00 PM
HB 278
HB278SCSCS(FIN)-DOR-TAX-04-17-14 - DRAFT.pdf SFIN 4/18/2014 1:30:00 PM
HB 278
HB278SCSCS(FIN)-DOLWD-CO-04-17-14 - DRAFT.pdf SFIN 4/18/2014 1:30:00 PM
HB 278
HB278SCSCS(FIN)-DOA-DOP-04-17-2014 - DRAFT.pdf SFIN 4/18/2014 1:30:00 PM
HB 278
HB278SCSCS-EED-PEF-4-17-14-DRAFT.pdf SFIN 4/18/2014 1:30:00 PM
HB 278
HB278SCSCS-EED-LO-4-17-14-DRAFT.pdf SFIN 4/18/2014 1:30:00 PM
HB 278
HB278SCSCS-EED-BHG-4-17-14-DRAFT.pdf SFIN 4/18/2014 1:30:00 PM
HB 278
HB278SCSCS-EED-SDR-4-17-14-DRAFT.pdf SFIN 4/18/2014 1:30:00 PM
HB 278
HB278SCSCS-EED-SFF-4-17-14-DRAFT.pdf SFIN 4/18/2014 1:30:00 PM
HB 278
HB278SCSCS-EED-SSA-4-17-14-DRAFT.pdf SFIN 4/18/2014 1:30:00 PM
HB 278
HB278 Revised HB278 Labor Unallocated TVEP 4-18-14.pdf SFIN 4/18/2014 1:30:00 PM
HB 278
SFC Revised HB 278 DEED PEF 4-18-14.pdf SFIN 4/18/2014 1:30:00 PM
HB 278
HB278 Revised HB278 Labor Unallocated TVEP 4-18-14.pdf SFIN 4/18/2014 1:30:00 PM
HB 278