Legislature(2015 - 2016)CAPITOL 106

03/30/2016 08:00 AM EDUCATION

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Audio Topic
08:04:29 AM Start
08:05:05 AM Confirmation Hearings(s):
08:05:24 AM Professional Teaching Practices Commission (ptpc)
08:17:18 AM State Board of Education and Early Development
08:23:41 AM SJR2
09:05:13 AM HB357
09:48:18 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Confirmation Hearings: TELECONFERENCED
- Board of Education & Early Development
- Professional Teaching Practices Commission
Moved SJR 2 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
Heard & Held
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE EDUCATION STANDING COMMITTEE                                                                             
                         March 30, 2016                                                                                         
                           8:04 a.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Wes Keller, Chair                                                                                                
Representative Liz Vazquez, Vice Chair                                                                                          
Representative Jim Colver                                                                                                       
Representative Paul Seaton                                                                                                      
Representative David Talerico                                                                                                   
Representative Harriet Drummond                                                                                                 
Representative Ivy Spohnholz                                                                                                    
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
OTHER MEMBERS PRESENT                                                                                                         
Representative Lora Reinbold                                                                                                    
COMMITTEE CALENDAR                                                                                                            
CONFIRMATION HEARINGS(S):                                                                                                       
Professional Teaching Practices Commission (PTPC)                                                                             
     Frances Roberts - Homer                                                                                                    
     - CONFIRMATION(S) ADVANCED                                                                                                 
State Board of Education and Early Development                                                                                
     Rebecca Himschoot - Sitka                                                                                                  
     - CONFIRMATION(S) ADVANCED                                                                                                 
SENATE JOINT RESOLUTION NO. 2                                                                                                   
Proposing an amendment to the Constitution of the State of                                                                      
Alaska relating to contracting state debt for postsecondary                                                                     
student loans.                                                                                                                  
     - MOVED SJR 2 OUT OF COMMITTEE                                                                                             
HOUSE BILL NO. 357                                                                                                              
"An Act relating to the Board of Education and Early                                                                            
Development; and relating to the Board of Regents of the                                                                        
University of Alaska."                                                                                                          
     - HEARD & HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SJR 2                                                                                                                   
SHORT TITLE: CONST. AM: G.O. BONDS FOR STUDENT LOANS                                                                            
SPONSOR(s): SENATOR(s) MACKINNON                                                                                                
01/21/15       (S)       PREFILE RELEASED 1/9/15                                                                                
01/21/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/21/15       (S)       STA, EDC, FIN                                                                                          
02/10/15       (S)       STA AT 9:00 AM BUTROVICH 205                                                                           
02/10/15       (S)       Moved SJR 2 Out of Committee                                                                           
02/10/15       (S)       MINUTE (STA)                                                                                           
02/11/15       (S)       STA RPT 3DP 2NR                                                                                        
02/11/15       (S)       DP: COGHILL, MCGUIRE, WIELECHOWSKI                                                                     
02/11/15       (S)       NR: STOLTZE, HUGGINS                                                                                   
02/24/15       (S)       EDC AT 3:30 PM BUTROVICH 205                                                                           
02/24/15       (S)       Heard & Held                                                                                           
02/24/15       (S)       MINUTE (EDC)                                                                                           
03/12/15       (S)       EDC AT 3:30 PM BUTROVICH 205                                                                           
03/12/15       (S)       Moved SJR 2 Out of Committee                                                                           
03/12/15       (S)       MINUTE (EDC)                                                                                           
03/13/15       (S)       EDC RPT 3DP 1NR                                                                                        
03/13/15       (S)       DP: DUNLEAVY, STEVENS, HUGGINS                                                                         
03/13/15       (S)       NR: GARDNER                                                                                            
03/26/15       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
03/26/15       (S)       Heard & Held                                                                                           
03/26/15       (S)       MINUTE (FIN)                                                                                           
04/09/15       (S)       FIN AT 1:30 PM SENATE FINANCE 532                                                                      
04/09/15       (S)       Moved SJR 2 Out of Committee                                                                           
04/09/15       (S)       MINUTE (FIN)                                                                                           
04/10/15       (S)       FIN RPT 3DP 3NR                                                                                        
04/10/15       (S)       DP: MACKINNON, BISHOP, HOFFMAN                                                                         
04/10/15       (S)       NR: KELLY, DUNLEAVY, OLSON                                                                             
04/13/15       (S)       TRANSMITTED TO (H)                                                                                     
04/13/15       (S)       VERSION: SJR 2                                                                                         
04/13/15       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/13/15       (H)       EDC, JUD, FIN                                                                                          
03/23/16       (H)       EDC AT 8:00 AM CAPITOL 106                                                                             
03/23/16       (H)       Heard & Held                                                                                           
03/23/16       (H)       MINUTE (EDC)                                                                                           
03/30/16       (H)       EDC AT 8:00 AM CAPITOL 106                                                                             
BILL: HB 357                                                                                                                  
SHORT TITLE: BOARD OF ED/BOARD OF REGENTS MEMBERS                                                                               
SPONSOR(s): REPRESENTATIVE(s) VAZQUEZ                                                                                           
02/24/16       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/24/16       (H)       EDC, FIN                                                                                               
03/28/16       (H)       EDC AT 8:00 AM CAPITOL 106                                                                             
03/28/16       (H)       Scheduled but Not Heard                                                                                
03/30/16       (H)       EDC AT 8:00 AM CAPITOL 106                                                                             
WITNESS REGISTER                                                                                                              
FRANCES ROBERTS, Appointee                                                                                                      
Professional Teaching Practices Commission (PTPC)                                                                               
Homer, Alaska                                                                                                                   
POSITION STATEMENT:  Testified as appointee to the Professional                                                               
Teaching Practices Commission (PTPC).                                                                                           
REBECCA HIMSCHOOT, Appointee                                                                                                    
State Board of Education and Early Development                                                                                  
Sitka, Alaska                                                                                                                   
POSITION STATEMENT:  Testified as appointee to the State Board                                                                
of Education and Early Development.                                                                                             
DIANE BARRANS, Executive Officer                                                                                                
Alaska Student Loan Corporation                                                                                                 
Executive Director                                                                                                              
Postsecondary Education Commission                                                                                              
Department of Education and Early Development (EED)                                                                             
POSITION STATEMENT:  Responded to questions during the hearing                                                                
on SJR 2.                                                                                                                       
STERLING GALLAGHER                                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in opposition to SJR 2.                                                                        
CHRIS CHRISTENSEN, Associate Vice President                                                                                     
State Relations                                                                                                                 
University of Alaska (UA)                                                                                                       
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in opposition to HB 357.                                                                       
ACTION NARRATIVE                                                                                                              
8:04:29 AM                                                                                                                    
CHAIR WES  KELLER called the  House Education  Standing Committee                                                             
meeting to order  at 8:04 a.m.   Representatives Keller, Vazquez,                                                               
Colver, Seaton, and  Talerico were present at the  call to order.                                                               
Representatives  Drummond and  Spohnholz arrived  as the  meeting                                                               
was in progress.                                                                                                                
^CONFIRMATION HEARINGS(S):                                                                                                      
                   CONFIRMATION HEARINGS(S):                                                                                
8:05:05 AM                                                                                                                    
CHAIR KELLER announced that the  first order of business would be                                                               
advancement   of  appointments   to  the   Professional  Teaching                                                               
Practices  Commission (PTPC),  and the  State Board  of Education                                                               
and Early Development.                                                                                                          
^Professional Teaching Practices Commission (PTPC)                                                                              
       Professional Teaching Practices Commission (PTPC)                                                                    
8:05:24 AM                                                                                                                    
FRANCES  ROBERTS,  Appointee,   Professional  Teaching  Practices                                                               
Commission (PTPC),  described herself  as a  UA graduate,  with a                                                               
masters in mathematics, from Montana  State University, which she                                                               
has taught  for 22 years.   She  said re-appointment to  the PTPC                                                               
allows her to continue to give back to her community.                                                                           
8:07:22 AM                                                                                                                    
REPRESENTATIVE  SEATON  asked  for   a  description  of  how  the                                                               
commission works.                                                                                                               
The committee took an at-ease from 8:07 a.m. to 8:11 a.m.                                                                       
8:11:25 AM                                                                                                                    
MS.  ROBERTS outlined  the  duties of  the  commission, which  is                                                               
focused on  the ethical behavior of  teachers.  When a  report is                                                               
received, the  information is reviewed  to determine  whether the                                                               
report  represents  a viable  complaint  or  is dismissible.    A                                                               
viable   complaint  undergoes   a   process   to  determine   the                                                               
significance of  the statutory  violation, address  all concerns,                                                               
and formulate consequences.                                                                                                     
8:13:57 AM                                                                                                                    
REPRESENTATIVE  COLVER  asked  how  the  legislature  might  help                                                               
teachers to  do a better job,  in light of the  state and federal                                                               
mandates that encroach on classroom time.                                                                                       
MS.   ROBERTS  predicted   that  the   changes  in   the  testing                                                               
regulations, under  the ESSA reauthorization, that  may represent                                                               
an  improvement.   She  expressed  support  for state  controlled                                                               
assessment  measures; however,  the  federally mandated  testing,                                                               
and  the  time  required  to  ensure  compliance,  has  not  been                                                               
particularly helpful, she opined.                                                                                               
8:15:44 AM                                                                                                                    
CHAIR KELLER  asked if  the PTPC hires  a person  to specifically                                                               
receive and check into the complaints.                                                                                          
MS.  ROBERTS responded  that  the  PTPC is  fully  funded by  the                                                               
teacher certification process, is  a self-sustaining program, and                                                               
retains  one employee.   Currently  the position  is filled  by a                                                               
former  educator,  Jim  Seitz,  who  has  taught  in  the  public                                                               
schools, as well as the university  sector.  He is well versed in                                                               
Alaskan education issues, she added.                                                                                            
8:16:55 AM                                                                                                                    
REPRESENTATIVE  VAZQUEZ  moved  to advance  the  confirmation  of                                                               
Frances Roberts, appointee to  the Professional Teaching Practice                                                               
Commission,  to a  joint  session  of the  House  and Senate  for                                                               
consideration.   Without  objection the  name of  Frances Roberts                                                               
will be advanced.                                                                                                               
REPRESENTATIVE VAZQUEZ reminded members  that signing the reports                                                               
regarding  appointments  to  boards  and commissions  in  no  way                                                               
reflects  individual  members'  approval or  disapproval  of  the                                                               
appointees, and that the nominations  are merely forwarded to the                                                               
full legislature for confirmation or rejection.                                                                                 
^State Board of Education and Early Development                                                                                 
         State Board of Education and Early Development                                                                     
8:17:18 AM                                                                                                                    
CHAIR KELLER continued with the  appointment of Rebecca Himschoot                                                               
to the  State Board  of Education  and Early  Development, noting                                                               
the  response in  the committee  packet that  was requested  at a                                                               
previous hearing [House Education Standing Committee 3/18/16].                                                                  
REPRESENTATIVE  VAZQUEZ  moved  to advance  the  confirmation  of                                                               
Rebecca Himschoot, appointee to the  State Board of Education and                                                               
Early Development,  to a  joint session of  the House  and Senate                                                               
for  consideration.    Without  objection  the  name  of  Rebecca                                                               
Himschoot will be advanced.                                                                                                     
8:18:32 AM                                                                                                                    
REPRESENTATIVE  COLVER  asked  what goals,  objectives  and  data                                                               
would  represent  a meaningful  assessment  for  the students  of                                                               
grades  3-10, in  reforming the  testing emphasis  and priorities                                                               
that the state anticipates.                                                                                                     
REBECCA HIMSCHOOT, Appointee, State  Board of Education and Early                                                               
Development, said the  high stakes testing has  been removed, but                                                               
it is  still important to  obtain assessment data to  measure how                                                               
students  are  progressing.     The  effectiveness  of  classroom                                                               
content must  be charted and  feedback is required  to understand                                                               
areas that  may need to be  bolstered.  An understanding  for how                                                               
to best  support students individually  and on a group  basis, as                                                               
well as  a means for  identifying schools in need  of assistance,                                                               
are areas  that require scrutiny.   Student  progress assessments                                                               
should also be comparable on statewide and national levels.                                                                     
REPRESENTATIVE  COLVER  asked  about deficiencies  found  in  the                                                               
current Alaska measures of progress (AMP) test.                                                                                 
MS.  HIMSCHOOT  responded that  her  contact  with AMP  has  been                                                               
limited,  however, the  data results  have provided  broad stroke                                                               
assessments,  and  not  the   refined  information  necessary  to                                                               
address specific individual or group needs.                                                                                     
REPRESENTATIVE  COLVER  acknowledged  that  the  lack  of  usable                                                               
student data  is an issue, and  said he will look  forward to her                                                               
directing the  board towards a  means of obtaining  more specific                                                               
MS. HIMSCHOOT  agreed with  the member's  concerns, and  said the                                                               
districts and the department appear to be on the same page.                                                                     
         SJR 2-CONST. AM: G.O. BONDS FOR STUDENT LOANS                                                                      
8:23:41 AM                                                                                                                    
CHAIR KELLER announced  that the next order of  business would be                                                               
SENATE  JOINT RESOLUTION  NO. 2,  Proposing an  amendment to  the                                                               
Constitution  of  the State  of  Alaska  relating to  contracting                                                               
state debt for postsecondary student loans.                                                                                     
8:24:38 AM                                                                                                                    
REPRESENTATIVE  VAZQUEZ noted  that  the  corporation has  enough                                                               
cash to  meet its  loan obligations.   She directed  attention to                                                               
the   committee  packet   handout   titled,   "State  of   Alaska                                                               
Comprehensive  Annual Financial  Report, Fiscal  Year Ended  June                                                               
30,  2015," issued  by  the Division  of  Finance, Department  of                                                               
Administration, and the  attached page 252, to  review the column                                                               
headed,  Alaska Student  Loan Corporation.   The  report provides                                                               
that  the assets  of the  corporation show  cash and  investments                                                               
totaling $35  million, with a  bottom line total net  position of                                                               
nearly $221  million.   Thus, she  surmised that  the corporation                                                               
doesn't appear to be strapped for  cash and unable to fund loans.                                                               
The  costs  reported  during  the   previous  hearing  of  SJR  2                                                               
[3/23/16], were  about $30  million.  Thus,  having to  enter the                                                               
bond market  and making  a change to  the constitution  to access                                                               
that  market,  is not  warranted,  she  opined.   She  questioned                                                               
whether  there might  not  be another  avenue  to explore,  which                                                               
would prove less draconian than changing the constitution.                                                                      
8:27:48 AM                                                                                                                    
DIANE   BARRANS,   Executive   Officer,   Alaska   Student   Loan                                                               
Corporation,   Executive    Director,   Postsecondary   Education                                                               
Commission, Department of Education  and Early Development (EED),                                                               
responded that  at issue is  whether the commission can  meet the                                                               
volume of  new loans,  as well as  the refinance  requirements of                                                               
existing, loans.   The  estimated volume  of the  combination for                                                               
these two  loan categories, in  the first year, could  exceed $40                                                               
million.     She  reported  that,  minus   operating  costs,  the                                                               
corporation's  capacity  does  not  meet this  level  of  demand.                                                               
Speaking to  the question  of possible  alternatives to  using GO                                                               
debt, she said the state,  since 2009, has provided two different                                                               
types of  supports to  the corporation.   One  was to  enable the                                                               
Department of Revenue (DOR) to  serve as a stand-by bond purchase                                                               
provider;  an agreement  whereby the  corporation can  access the                                                               
market  using  the  liquidity  support   from  the  state.    The                                                               
arrangement ensures  that, in the event  the corporation defaults                                                               
on the obligation, the state will  buy the outstanding bonds.  In                                                               
structuring  that deal,  she reported,  the corporation  was able                                                               
to, at a relatively low  cost, secure a liquidity provider letter                                                               
of  credit,  but  only  on  a standby  basis.    Thus,  the  loan                                                               
structure allows access to the  market, but it doesn't afford the                                                               
cost  reducing benefits  that the  GO bonds  provide.   The other                                                               
type of  assistance that the  state offered was  authorization in                                                               
statute, allowing  DOR to  extend a $100  million loan,  of which                                                               
$70 million has  been used.  It was structured  as a bridge loan,                                                               
which  is  not a  viable  long  term  strategy for  meeting  loan                                                               
demands or  for achieving  the low cost  interest rates  that the                                                               
corporation would like to offer to Alaskans.                                                                                    
8:31:18 AM                                                                                                                    
REPRESENTATIVE  COLVER inquired  whether the  revenue bonds  have                                                               
been leveraged to finance student loans.                                                                                        
MS.  BARRANS  responded yes,  and  added  that  it has  been  the                                                               
practice since  1988; however, with  the change in the  market it                                                               
has become a costly method.                                                                                                     
REPRESENTATIVE COLVER  asked about  the point spread  between the                                                               
revenue bonds versus GO financing.                                                                                              
MS. BARRANS answered that, if  the state maintains its AAA credit                                                               
rating, the  spread would be about  120 basis points, but  if the                                                               
rating drops to AA it would be about 97 basis points.                                                                           
8:32:51 AM                                                                                                                    
REPRESENTATIVE DRUMMOND asked for an  average amount of an Alaska                                                               
student loan.                                                                                                                   
MS.  BARRANS estimated  $6,000,  and offered  to provide  further                                                               
information.   The  allowed maximums  have recently  been raised,                                                               
she  said,  and  predicted  that  the  average  total  will  also                                                               
REPRESENTATIVE DRUMMOND  opined that, estimating an  $11,000 loan                                                               
and  considering 11,000  students, $220  million doesn't  go very                                                               
far.   She conjectured that,  should the  Performance Scholarship                                                               
fund  be jeopardized,  the corporation  will see  an increase  in                                                               
loan applications.                                                                                                              
8:34:20 AM                                                                                                                    
CHAIR  KELLER  noted  that  typically  a  getting  out  the  vote                                                               
investment will  be made  on either  side of  a ballot  issue and                                                               
asked who the corporation anticipates  will get behind promoting,                                                               
as well as opposing this legislation.                                                                                           
MS. BARRANS explained that when a  state agency puts an item on a                                                               
ballot the advocacy  is not through the agency.   Media relations                                                               
would allow factual  statements to be broadcast, but  there is no                                                               
expectation for promotional efforts.                                                                                            
CHAIR  KELLER asked  if there  are any  groups that  might pursue                                                               
advertising to advocate for or against the measure.                                                                             
MS. BARRANS said  there is no expectation of  any campaigns being                                                               
8:37:01 AM                                                                                                                    
REPRESENTATIVE  VAZQUEZ returned  to the  testimony predicting  a                                                               
surge  in  loan  applications  and  asked  what  information  the                                                               
prediction is based on.                                                                                                         
MS. BARRANS  replied that a  number of moving pieces  effect loan                                                               
demand.  The commission expects  an increase in enrollment levels                                                               
at  the university  in the  coming years,  and tuition  costs are                                                               
also expected to increase.                                                                                                      
8:38:21 AM                                                                                                                    
STERLING GALLAGHER  stated opposition to  SJR 2, and  described a                                                               
personal history  of financial work  within the  state, including                                                               
commissioner of  the DOR and  underwriting state bonds.   He said                                                               
the Student Loan  Corporation was designed around  cash flow, and                                                               
represents the weakest type of loan  that the state can make, due                                                               
to the  lack of collateral.   One thing that does  make this type                                                               
of loan  work is the  fact that  it cannot be  discharged through                                                               
bankruptcy.  The  national average student loan  is $60,000, with                                                               
high end  profession graduate  debt at  about $160,000.   Because                                                               
the commission  is designed  around cash  flow, he  opined, other                                                               
means  could  be  implemented  for loan  purposes  and  GO  bonds                                                               
reserved  for  construction  programs and  emergency  situations.                                                               
The loan  program has been soundly  run, he offered, but  a young                                                               
person  carrying heavy  student  loan debt  can  become a  socio-                                                               
economic burden as their lives  change.  The national concern for                                                               
the level  of systemic student  debt is  on the fore  burner, and                                                               
there  is  pressure  to  change   bankruptcy  laws  in  order  to                                                               
accommodate the  fallout, which in  turn could affect  the states                                                               
credit  rating.   Collateral versus  the states  moral obligation                                                               
would be  a better  approach, he suggested,  and returned  to the                                                               
figures from the previously cited  financial report to state that                                                               
the need  for further  assets is  appropriately noted.   However,                                                               
ways  and  means should  be  accomplished  by drawing  on  other,                                                               
sufficiently collateralized, state loan balances and programs.                                                                  
8:45:40 AM                                                                                                                    
CHAIR KELLER  asked about  the current debt  load carried  by the                                                               
state and its rating on Standard and Poor's.                                                                                    
MR.  GALLAGHER said  Alaska  has about  $600  million in  general                                                               
obligation debts, and opined that,  overall, the state is in good                                                               
8:47:35 AM                                                                                                                    
REPRESENTATIVE  COLVER  asked  for  a general  statement  of  the                                                               
outlook for GO  bonds in the state, and whether  SJR 2 appears to                                                               
present any problem.  A  state/national disaster would require GO                                                               
bonds, he noted, and asked about other future needs.                                                                            
MR. GALLAGHER responded  that the state has  ample flexibility at                                                               
this point and federal matching  funds continue to prove helpful.                                                               
He  suggested that  other means  could  be employed  to meet  the                                                               
current financial crisis in the state.                                                                                          
8:51:32 AM                                                                                                                    
REPRESENTATIVE SEATON  asked what loans could  be appropriated to                                                               
the commission, without compromise.                                                                                             
MR. GALLAGHER  answered that  the fishermen  loans would  be one,                                                               
with about $130 million collaterally extended on quality assets.                                                                
REPRESENTATIVE   SEATON  surmised   that   fishermen  loans   are                                                               
collateralized  using fishing  vessels  and  questioned how  much                                                               
money could actually be made available.   If the loans were based                                                               
on the payment  receipts, it seems that it  may be insignificant,                                                               
he opined.                                                                                                                      
MR.  GALLAGHER responded  that other  agency loans  may be  based                                                               
more on  cash flow  and it's  the quality of  the cash  flow that                                                               
should be considered.                                                                                                           
8:53:46 AM                                                                                                                    
REPRESENTATIVE VAZQUEZ  asked if there  is a link  connecting the                                                               
fishing  loans,   as  made  by   the  Division   of  Investments,                                                               
Department   of  Commerce,   Community  &   Economic  Development                                                               
(DCCED), and the Alaska Student Loan Corporation program.                                                                       
MR. GALLAGHER responded  no; however the fishing  program has $60                                                               
million in cash, in the till,  earning about a half of a percent.                                                               
Thus, extending  that cash to  cover $130 million in  loans would                                                               
be an appropriate leverage of funds.                                                                                            
REPRESENTATIVE  VAZQUEZ  clarified  that  the  suggestion  is  to                                                               
direct fishing loan funds to the commission.                                                                                    
MR. GALLAGHER  responded that, instead  of appropriating  cash to                                                               
the program, appropriate the loans.                                                                                             
8:55:04 AM                                                                                                                    
REPRESENTATIVE COLVER  stated his  understanding of  the scenario                                                               
being  described  and   said  it  utilizes  the   cash  flow  for                                                               
MR. GALLAGHER answered yes, and said  it's a smarter use of money                                                               
and doesn't consume the available balances.                                                                                     
8:56:29 AM                                                                                                                    
The committee took an at-ease from 8:56 a.m. to 8:57 a.m.                                                                       
8:57:11 AM                                                                                                                    
REPRESENTATIVE  COLVER commented  that amending  the constitution                                                               
is a  weighty affair.   He said he  does not object  to advancing                                                               
the bill  for further scrutiny  and debate in the  next committee                                                               
of referral.                                                                                                                    
8:58:42 AM                                                                                                                    
REPRESENTATIVE  TALERICO  clarified  that  the  members  are  not                                                               
casting  a  vote  to  amend  the  constitution  by  passing  this                                                               
legislation  out of  committee.   He said  many facets  will come                                                               
into play  as the bill advances  forward.  The voting  public may                                                               
be called  upon for  the final determination  and opined  that GO                                                               
bonds  may be  the best  financing alternative.   He  said he  is                                                               
neutral  on  the  bill,  but  appreciates  opportunities  to  put                                                               
decisions before the voters.                                                                                                    
9:00:24 AM                                                                                                                    
REPRESENTATIVE SEATON  said student  loan debt  is a  big problem                                                               
nationwide,  primarily  due  to  the  high  interest  rates  that                                                               
accumulate and  compound debt, even  as graduates enter  the work                                                               
force.   Lowering the  student loan interest  rate could  be very                                                               
beneficial, he opined, however,  using money from other programs,                                                               
such as the fishing vessel program, presents a concern.                                                                         
9:02:10 AM                                                                                                                    
CHAIR  KELLER  opined  that  the   committee  has  done  its  due                                                               
9:02:42 AM                                                                                                                    
REPRESENTATIVE VAZQUEZ  commented that  the student  loan program                                                               
is critical,  especially in light  of the tuition  rate increases                                                               
that may  be imposed.   She maintained  her concern  for amending                                                               
the  constitution,  Article 9,  and  said  that other  mechanisms                                                               
would be more appropriate.                                                                                                      
9:04:40 AM                                                                                                                    
REPRESENTATIVE TALERICO  moved to  report SJR 2,  29-LS0010\W out                                                               
of   committee   with    individual   recommendations   and   the                                                               
accompanying fiscal notes.   There being no objection,  SJR 2 was                                                               
reported from the House Education Standing Committee.                                                                           
9:05:02 AM                                                                                                                    
The committee took a brief at-ease at 9:05 a.m.                                                                                 
          HB 357-BOARD OF ED/BOARD OF REGENTS MEMBERS                                                                       
9:05:13 AM                                                                                                                    
CHAIR KELLER announced that the  final order of business would be                                                               
HOUSE BILL  NO. 357, "An Act  relating to the Board  of Education                                                               
and Early  Development; and relating  to the Board of  Regents of                                                               
the University of Alaska."                                                                                                      
9:07:42 AM                                                                                                                    
REPRESENTATIVE VAZQUEZ  described HB  357, paraphrasing  from the                                                               
sponsor statement,  which read  as follows  [original punctuation                                                               
     House  Bill 357  places  two legislators  on the  state                                                                    
     Board  of  Education  and  Early  Development  and  two                                                                    
     legislators on the Board of  Regents for the University                                                                    
     of Alaska.                                                                                                                 
     House Bill 357  affords improved communications between                                                                    
     the  legislature and  each respective  board. It  opens                                                                    
     dialogue,   allows  for   a  better   understanding  of                                                                    
     successes  and challenges,  and  provides insight  into                                                                    
     areas within each organization.                                                                                            
     Having two legislatures serve  as non-voting members on                                                                    
     each  board will  allow the  legislature  to be  better                                                                    
     informed and more knowledgeable  of each board, assists                                                                    
     in  the legislative  process to  support the  goals and                                                                    
     objectives  of each  organization,  and gives  improved                                                                    
     insight to each board on the legislative process.                                                                          
     House  Bill 357  will build  the framework  to shape  a                                                                    
     strong future for Alaska's educational needs.                                                                              
9:08:52 AM                                                                                                                    
REPRESENTATIVE  VAZQUEZ  emphasized  that the  legislative  board                                                               
members  would  be  non-voting,   and  acknowledged  the  concern                                                               
regarding  the possible  violation of  the separation  of powers.                                                               
The Legislative  Legal Services counsel  provided an  opinion for                                                               
review but may  have overlooked AS 24.05.050, she  said, and read                                                               
the statute as follows:                                                                                                         
     Sec. 24.05.050.  Membership on boards and commissions.                                                                     
     A member  of the  legislature may serve  on a  board or                                                                    
     commission  of   the  state  government  only   if  the                                                                    
     membership of  legislators on  the board  or commission                                                                    
     is specifically authorized by law.                                                                                         
9:12:55 AM                                                                                                                    
REPRESENTATIVE   VAZQUEZ  said   that  in   addition  there   are                                                               
legislators  currently  serving  on 13  boards  and  commissions,                                                               
which include:  Alaska Aerospace  Corporation seats a senator and                                                               
a representative;  Alaska Justice Commission seats  a senator and                                                               
a representative; Governor's Council  on Disabilities and Special                                                               
Education  seats a  representative;  State  Council on  Education                                                               
Opportunities  for Military  Children seats  a senator;  Citizens                                                               
Advisory Commission  on Federal Lands  in Alaska seats  a senator                                                               
and  a representative;  State Council  for  Interstate Adult  and                                                               
Juvenile Offender  Supervision seats  a senator; Knik  Arm Bridge                                                               
and  Toll Authority  Board of  Directors  seats a  senator and  a                                                               
representative;  Alaska  Native  Language  Preservation  Advisory                                                               
Council  seats a  senator and  a  representative; Pacific  States                                                               
Marine Fisheries  Commission seats  a senator;  Alaska Commission                                                               
on Postsecondary Education seats  a senator and a representative;                                                               
Statewide Suicide  Prevention Council seats two  senators and two                                                               
representatives;  the  Alaska  Tourism Marketing  Board  seats  a                                                               
senator and a  representative; and the now  defunct Alaska Health                                                               
Care Commission, seated  a senator and a  representative;.  There                                                               
are also three  commissions and committees on  which the governor                                                               
serves,  and the  lieutenant governor  serves on  one commission.                                                               
Seating  the  legislators  as non-voting  members  satisfies  the                                                               
concern  regarding  separation  of  powers, she  opined.    These                                                               
members  will be  important  liaisons for  the  legislature as  a                                                               
whole,  and given  the 90  day session,  will facilitate  further                                                               
understanding during the interim.                                                                                               
9:14:00 AM                                                                                                                    
CHRIS CHRISTENSEN, Associate Vice  President for State Relations,                                                               
University of Alaska (UA), stated  opposition to HB 357, and said                                                               
the intent for improved communications  is commendable.  However,                                                               
having legislative members would  create strong grounds for legal                                                               
challenges to specific  actions that are taken by the  board.  He                                                               
noted that  legislators and  staff are  welcomed to  attend board                                                               
meetings.  In 2015, he reported,  the regents met 20 times.  Five                                                               
of the meetings were multi-day  affairs that entertained hours of                                                               
public  testimony.   Often legislators  appear at  these meetings                                                               
and  frequently testify.   The  seating of  legislators, however,                                                               
would subject board action to  legal challenge for three specific                                                               
reasons:     violation  of  separation  of   powers  between  the                                                               
executive   and   legislative    branches;   violation   of   the                                                               
constitutional    prohibition   on    dual   office-holding    by                                                               
legislators;  and inconsistency  with  the stated  intent of  the                                                               
framers  of  the constitution  to  insulate  the university  from                                                               
9:15:41 AM                                                                                                                    
MR.  CHRISTENSEN,  addressing  the   concern  for  separation  of                                                               
powers,  cited the  relevant  constitutional  provision as  being                                                               
Article 7 Sec. 3, a  clear and unambiguous statement, which reads                                                               
as follows:                                                                                                                     
     SECTION 3.  Board of Regents. The University of Alaska                                                                     
      shall be governed by a board of regents. The regents                                                                      
     shall  be   appointed  by  the  governor,   subject  to                                                                    
     confirmation  by  a  majority  of the  members  of  the                                                                    
     legislature  in  joint  session. The  board  shall,  in                                                                    
     accordance with  law, formulate policy and  appoint the                                                                    
     president of the university. He  shall be the executive                                                                    
     officer of the board.                                                                                                      
MR. CHRISTENSEN  opined that  the appointment  of regents  by the                                                               
legislature would  directly encroach on the  governor's exclusive                                                               
authority, under the constitution, to appoint board members.                                                                    
9:16:12 AM                                                                                                                    
MR. CHRISTENSEN, addressing the  concern for dual office-holding,                                                               
cited Article 2 Sec. 5, which reads as follows:                                                                                 
     SECTION 5.   Disqualifications. No legislator  may hold                                                                    
     any  other  office  or position  of  profit  under  the                                                                    
     United States or  the State. During the  term for which                                                                    
     elected and for one  year thereafter, no legislator may                                                                    
     be  nominated,  elected,  or  appointed  to  any  other                                                                    
     office or  position of profit  which has  been created,                                                                    
     or  the  salary  or  emoluments   of  which  have  been                                                                    
     increased, while  he was a  member. This  section shall                                                                    
     not  prevent any  person from  seeking  or holding  the                                                                    
     office of  governor, secretary of  state, or  member of                                                                    
     Congress. This  section shall  not apply  to employment                                                                    
     by or election to a constitutional convention.                                                                             
MR. CHRISTENSEN reported that the  Alaska Supreme Court has ruled                                                               
that this  section should  be read and  enforced literally.   The                                                               
position  of regent  is a  constitutional office.   A  legislator                                                               
appointed  to  serve as  regent  would,  thus, clearly  hold  two                                                               
offices in  violation of this section.   A ruling in  1976 stated                                                               
that  judges, a  governor, and  legislators, may  not serve  as a                                                               
regent while at the same time retaining such office.                                                                            
9:17:09 AM                                                                                                                    
MR. CHRISTENSEN,  addressing the  concern for  inconsistency with                                                               
the stated intent of the  framers of the constitution to insulate                                                               
the university  from politics, said  that placing  legislators on                                                               
the board inevitably injects politics  directly into the internal                                                               
operations  of the  university.    The constitutional  convention                                                               
hosted  debate to  separate partisan  politics from  education in                                                               
general,  and specifically  from  the university.   For  example,                                                               
during  the framers  debate  on the  provision  that creates  the                                                               
executive branch, concerns were  raised regarding the appropriate                                                               
place for the  university in the new state  government.  Concerns                                                               
were repeatedly  expressed in terms  of the need to  insulate the                                                               
university from  politics.  He  cited a 2007 opinion  provided by                                                               
an attorney general, which he summarized as follows:                                                                            
     After reviewing  the minutes of the  convention, it was                                                                    
     fair to draw two conclusions:   the framers intended to                                                                    
     create  a very  strong  governor  with full  appointive                                                                    
     power,  but that,  despite the  strong governor  model,                                                                    
     the convention never the less  intended to insulate the                                                                    
     university from politics, including from the governor.                                                                     
9:18:15 AM                                                                                                                    
MR. CHRISTENSEN said that placing  legislators on the board would                                                               
be  the   exact  opposite  of  insulating   the  university  from                                                               
politics,  and  serve to  insert  legislative  politics into  the                                                               
internal  decision making.   The  legislators  hold the  ultimate                                                               
authority over the university, but  that authority is meant to be                                                               
exercised in the  confines of the Capitol through  the budget and                                                               
bill  processes.     He  maintained  that  the   framers  of  the                                                               
constitution worked to create these  protections.  A seated, non-                                                               
voting legislator would influence  decisions, he opined, and said                                                               
voting is not the  only means by which a member  of a public body                                                               
participates or influences  decisions of that public  body.  Even                                                               
as  the committee  debates the  bill proposed  today, the  debate                                                               
itself will  influence the outcome  of the final decision  on the                                                               
legislation.   The  executive  branch ethics  act,  to which  all                                                               
regents are subject, states:                                                                                                    
     Refraining  from  voting  is not  sufficient  to  avoid                                                                    
     taking  official  action.   Advice,  participation,  or                                                                    
     assistance is enough.                                                                                                      
MR.  CHRISTENSEN stressed  that under  existing Alaskan  law mere                                                               
participation by  board members is enough  to constitute official                                                               
action, even when not voting.                                                                                                   
9:20:09 AM                                                                                                                    
MR.  CHRISTENSEN referred  to the  boards and  commissions, which                                                               
seat legislators, and said statutes  do not override the language                                                               
of the  constitution.  He pointed  out that the board  of regents                                                               
is  one of  only  four  constitutional boards.    The boards  and                                                               
commissions  listed   earlier  by  Representative   Vazquez  were                                                               
created  under   statute,  by  the  legislature,   with  enabling                                                               
legislation to  allow for that  service/seating.   He underscored                                                               
the  significance of  the regents  being a  constitutional board,                                                               
and said  it often takes  controversial actions, such  as tuition                                                               
increases, allocation  of declining budgets between  campuses and                                                               
programs,  law suits  filed/defended, transactions  of investment                                                               
bonds and real  estate, and hiring a president.   Unhappy parties                                                               
may, and  have, brought  legal suit challenges  to the  board for                                                               
reasons such  as the  ones named, he  reported.   One significant                                                               
power of  the board, which  is especially relevant at  this time,                                                               
is the power  to reduce or discontinue academic  programs and the                                                               
power to  declare financial exigency.   These actions  permit the                                                               
university  to  reduce  faculty  and  staff  without  the  normal                                                               
constraints  or notice  periods that  are ordinarily  required by                                                               
contracts,  law,   or  regulation.    People   dissatisfied  with                                                               
decisions in  this area will  seize on any  uncertainty regarding                                                               
the  board's  authority and  use  that  uncertainty to  delay  or                                                               
disrupt  necessary  actions.    Litigation  often  ensues  during                                                               
aggressive,   reorganizational  periods,   which   is  what   the                                                               
university  is currently  undergoing to  meet budgetary  demands.                                                               
During  the  financial crash  that  occurred  in the  1980's  the                                                               
university  underwent   a  restructuring  phase,   absorbing  the                                                               
community campus  system, which resulted in  significant, lengthy                                                               
litigation,  which  was  sustained  by  a  faculty  union.    The                                                               
uncertain  legality  of seating  legislators  on  the board  will                                                               
provide fodder  for opponents  of other  actions; claim  could be                                                               
brought due to  this technicality versus actual  merit.  Argument                                                               
would be  made that  the disagreeable action  taken by  the board                                                               
was  illegal because  some members  of the  board were  illegally                                                               
seated.  The  risk of this type of  technical challenge outweighs                                                               
any benefits of increased communication.                                                                                        
9:23:45 AM                                                                                                                    
MR.   CHRISTENSEN  underscored   the   importance  for   improved                                                               
communication, and offered examples of  how that might be handled                                                               
without  legislators  being  seated or  enactment  of  additional                                                               
legislation.  Inner branch  advisory commissions exist throughout                                                               
the state, some are university  commissions and seat legislators.                                                               
When President  Jim Johnson assumed  office, in 2015,  he created                                                               
the  Alaska  Higher  Education Roundtable,  for  the  purpose  of                                                               
advising  him,  and  the  invited  membership  included  business                                                               
leaders as well as the  Alaska House of Representatives and State                                                               
Senate education and finance committee chairs.                                                                                  
9:24:51 AM                                                                                                                    
REPRESENTATIVE  COLVER asked  for the  names of  the four  boards                                                               
established by order of the constitution.                                                                                       
MR.  CHRISTENSEN  responded:    University  of  Alaska  Board  of                                                               
Regents,  the  Judicial  Council,   the  Commission  on  Judicial                                                               
Conduct, and the local boundary [commission].                                                                                   
9:25:26 AM                                                                                                                    
REPRESENTATIVE DRUMMOND asked when the regent meetings are held.                                                                
MR. CHRISTENSEN  answered that 5  multi-day meetings are  held in                                                               
February, April, June,  September, and December.   In addition 15                                                               
single day meetings are held  throughout the year.  The multi-day                                                               
meetings are held  on the three different main  campuses, and the                                                               
single    day    meetings     are    often    accomplished    via                                                               
telecommunications to minimize travel costs.                                                                                    
9:26:27 AM                                                                                                                    
CHAIR KELLER  opined that  the university appears  to hold  a low                                                               
opinion of  the legislature.   He suggested that the  board would                                                               
be  aware  of  the  political presence  and  any  undue  partisan                                                               
concerns would  be identified and  managed appropriately.   Also,                                                               
he questioned  whether there are constitutional  prohibitions for                                                               
seating a legislator.                                                                                                           
9:28:15 AM                                                                                                                    
MR. CHRISTENSEN cited the roundtable  invitation to the chair and                                                               
his colleagues.                                                                                                                 
CHAIR KELLER opined on the  difference of attending a roundtable,                                                               
philosophical discussion  versus sitting  with a  decision making                                                               
body.   He acknowledged the  concerns for  possible complications                                                               
and enhancement  as an invitation  for litigation;  however, that                                                               
may not have been tested and remains a theory.                                                                                  
MR.  CHRISTENSEN agreed  that policy  making bodies  and advisory                                                               
bodies are  very different, and  it's that distinction  which the                                                               
opinions  of   attorneys  general   have  pointed   towards  when                                                               
considering  the dual  office holding  and  separation of  powers                                                               
provisions,  as well  as  the insertion  of  politics beyond  the                                                               
oversight level  of the  Capitol.   The constitution  states that                                                               
the  governor shall  appoint, and  the  use of  the term  "shall"                                                               
would be held in court as a limitation, he predicted.                                                                           
CHAIR KELLER maintained that it hasn't been tested in court.                                                                    
MR.  CHRISTENSEN reiterated  that a  number of  attorneys general                                                               
have issued  and held  the same  opinion for  over 40  years that                                                               
serving on a non-advisory board  violates the dual office-holding                                                               
provision, as  well as the  separation of powers provision.   One                                                               
Alaska  Supreme Court  reading cautions  close  adherence to  the                                                               
dual office-holding provision, with  allowances made strictly for                                                               
military  service and  service as  a member  of a  constitutional                                                               
convention.    The  court  has   said  that,  because  these  two                                                               
exceptions are  made, they are  to be held to  without expansion.                                                               
This  is  a   similar  provision  as  is  written   in  the  U.S.                                                               
Constitution and 45  other states, where the  topic has undergone                                                               
extensive  litigation.    He  agreed to  provide  copies  of  the                                                               
opinions to the committee.                                                                                                      
9:31:34 AM                                                                                                                    
REPRESENTATIVE VAZQUEZ  asked whether the  constitution prohibits                                                               
legislators from serving on the Board of Regents.                                                                               
MR.  CHRISTENSEN  opined  that  it's difficult  to  confine  some                                                               
responses  to a  non-elaborated yes  or no,  and said  "I believe                                                               
that yes  it does,  if I  were to limit  it to  one of  those two                                                               
REPRESENTATIVE VAZQUEZ said, "And that is your interpretation."                                                                 
MR. CHRISTENSEN  responded, "It's also the  interpretation of the                                                               
attorney general going back over 40 years."                                                                                     
REPRESENTATIVE   VAZQUEZ   asked    whether   statute   prohibits                                                               
legislators from serving on the Board of Regents.                                                                               
MR. CHRISTENSEN  answered no, because the  constitution overrides                                                               
statute,  and  the  concern  is  specifically  addressed  in  the                                                               
REPRESENTATIVE  VAZQUEZ pointed  out  that  state statute  allows                                                               
members to sit on 13 other boards.                                                                                              
MR.  CHRISTENSEN explained  that  the  boards, previously  named,                                                               
were established by legislation.   Some are disallowed, he added,                                                               
and said the  ones that are allowed do so  primarily because they                                                               
have not  been tested  in court.   The Board  of Regents  is held                                                               
differently  than any  of  those agencies.    He reiterated  that                                                               
given the law of unintended  consequences, if a union takes issue                                                               
with  any action  taken by  the Board  of Regents  and the  court                                                               
upholds  that a  seated  member was  serving  in violation,  it's                                                               
conceivable  that  legislators may  be  unseated  from the  other                                                               
boards and commissions.                                                                                                         
9:34:40 AM                                                                                                                    
REPRESENTATIVE  VAZQUEZ surmised  that  distinguishing between  a                                                               
voting versus non-voting member is  a factor and the objection is                                                               
to the mere legislative presence.                                                                                               
MR.  CHRISTENSEN restated  that influence  occurs during  debate,                                                               
thus constituting official action.                                                                                              
REPRESENTATIVE VAZQUEZ maintained that  every bureaucracy has its                                                               
own politics.                                                                                                                   
MR. CHRISTENSEN agreed,  and said that is why  the framers worked                                                               
to insulate facets of politics from the Board of Regents.                                                                       
9:36:55 AM                                                                                                                    
CHAIR KELLER closed public testimony.                                                                                           
9:37:18 AM                                                                                                                    
REPRESENTATIVE SEATON  referred to  the committee packet  and the                                                               
three  page Legal  Services memorandum,  dated 3/26/16,  with the                                                               
subject  "Constitutionality  of  HB   357  (Work  Order  No.  29-                                                               
LS1520\A),  issued by  Kate S.  Glover, Legislative  Counsel, and                                                               
said  it covers  the  topic of  advisory  board versus  executive                                                               
action, as  well as  a detailed explanation  of the  dual office-                                                               
holding prohibition,  contained in  Article 2,  Section 5  of the                                                               
state constitution.                                                                                                             
9:39:15 AM                                                                                                                    
CHAIR KELLER commented that the  issue of whether politics should                                                               
be  involved,  and avoidance  for  including  legislators on  any                                                               
board  or  council  is  an  undefined,  overused  term  to  avoid                                                               
interaction by  the legislature.   He opined  that this  puts the                                                               
legislature at a disadvantage, despite  the members being elected                                                               
officials  representing constituents.   Partisan  politics should                                                               
not be brought to bear, he opined, and said:                                                                                    
     The role of a legislator is much more than that - it's                                                                     
       one of communicating and interacting and, frankly,                                                                       
     debate.  Debate is a way to get to the truth.                                                                              
9:41:14 AM                                                                                                                    
REPRESENTATIVE SPOHNHOLZ  expressed concern of  politics entering                                                               
into the decisions of the  university.  Legislative participation                                                               
appears  to be  welcomed  by the  regents;  however, a  non-voted                                                               
legislative member  would exert  an element of  influence through                                                               
the act of  participating.  Additionally, the means  by which the                                                               
legislators would be  selected, is in itself  a political action.                                                               
The  bill removes  a level  of  insulation that  is important  in                                                               
ensuring  a  separation  of  power.   The  intent  for  improving                                                               
communications is  commendable, but  there may be  other vehicles                                                               
to accomplish  that end.   The separation of bodies,  as outlined                                                               
in the constitution  may be jeopardized by HB 357,  and said it's                                                               
naïve to think  that the bill would not inject  politics into the                                                               
deliberations of the Board of Regents.                                                                                          
9:45:29 AM                                                                                                                    
REPRESENTATIVE DRUMMOND said  that, as a member  of the Anchorage                                                               
Municipal Assembly, she was required  to resign her seat in order                                                               
to  assume her  position at  the legislature.   She  reviewed the                                                               
regent's 2016 schedule:   15 single day meetings and  5 multi day                                                               
conferences.     In  order  for  a   legislator  to  participate,                                                               
especially  during  a  90  day   legislative  session,  the  time                                                               
constraints   could  prove   to  be   prohibitive  and   possibly                                                               
disruptive  to   the  schedule.     However,  she   pointed  out,                                                               
legislative  members  are  not   precluded  from  auditing  board                                                               
CHAIR KELLER announced HB 357 as held over.                                                                                     
9:48:18 AM                                                                                                                    
There being no  further business before the  committee, the House                                                               
Education Standing Committee meeting was adjourned at 9:48 a.m.                                                                 

Document Name Date/Time Subjects
SJR2 version A.pdf HEDC 3/30/2016 8:00:00 AM
SJR 2 Sponsor Statement.pdf HEDC 3/30/2016 8:00:00 AM
SJR2 Fiscal Note OOG-DOE 3-18-2016.pdf HEDC 3/30/2016 8:00:00 AM
SJR 2 Letter of Support-University of Alaska.pdf HEDC 3/30/2016 8:00:00 AM
SJR 2 Letter of Support-Juneau Chamber of Commerce.pdf HEDC 3/30/2016 8:00:00 AM