Legislature(2017 - 2018)CAPITOL 106

02/16/2018 08:00 AM EDUCATION

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as
Download Video part 1. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 339 INCREASE BASE STUDENT ALLOCATION TELECONFERENCED
Heard & Held
*+ HB 233 EDUCATION TAX CREDITS; SUNSET; REPEALS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE EDUCATION STANDING COMMITTEE                                                                             
                        February 16, 2018                                                                                       
                            8:01 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Harriet Drummond, Chair                                                                                          
Representative Justin Parish, Vice Chair                                                                                        
Representative Jennifer Johnston                                                                                                
Representative Chuck Kopp                                                                                                       
Representative David Talerico                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Ivy Spohnholz                                                                                                    
Representative Lora Reinbold (alternate)                                                                                        
Representative Geran Tarr (alternate)                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 339                                                                                                              
"An Act  relating to  the base  student allocation;  and providing                                                              
for an effective date."                                                                                                         
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
HOUSE BILL NO. 233                                                                                                              
"An  Act  relating to  the  insurance  tax education  credit,  the                                                              
income tax  education credit,  the oil  or gas producer  education                                                              
credit, the  property tax  education credit,  the mining  business                                                              
education  credit, the  fisheries business  education credit,  and                                                              
the  fisheries resource  landing tax  education credit;  providing                                                              
for an  effective date by repealing  the effective dates  of secs.                                                              
3, 5, 7, 10, 14,  16, 18, 21, 23, 25, 28, 30, 32,  35, 37, 39, 42,                                                              
44, 46,  49, 51, 53,  and 55,  ch. 92, SLA  2010, sec. 14,  ch. 7,                                                              
FSSLA 2011, secs.  15, 17, 19, 21,  23, and 25, ch.  74, SLA 2012,                                                              
sec. 49, ch. 14,  SLA 2014, secs. 37, 40, 43, and  46, ch. 15, SLA                                                              
2014, and  secs. 26  and 31, ch.  61, SLA  2014; providing  for an                                                              
effective date by  amending the effective date of secs.  1, 2, and                                                              
21, ch. 61, SLA 2014; and providing for an effective date."                                                                     
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 339                                                                                                                  
SHORT TITLE: INCREASE BASE STUDENT ALLOCATION                                                                                   
SPONSOR(s): REPRESENTATIVE(s) GARA                                                                                              
                                                                                                                                
02/09/18       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/09/18       (H)       EDC, FIN                                                                                               
02/16/18       (H)       EDC AT 8:00 AM CAPITOL 106                                                                             
                                                                                                                                
BILL: HB 233                                                                                                                  
SHORT TITLE: EDUCATION TAX CREDITS; SUNSET; REPEALS                                                                             
SPONSOR(s): REPRESENTATIVE(s) TUCK                                                                                              
                                                                                                                                
04/15/17       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/15/17       (H)       EDC, FIN                                                                                               
02/16/18       (H)       EDC AT 8:00 AM CAPITOL 106                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
REPRESENTATIVE LES GARA                                                                                                         
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Presented a PowerPoint titled "Education                                                                 
Matters".                                                                                                                       
                                                                                                                                
REPRESENTATIVE CHRIS TUCK                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified as prime sponsor of HB 233.                                                                    
                                                                                                                                
SUSAN FOLEY, President                                                                                                          
University of Alaska Foundation                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 233.                                                                          
                                                                                                                                
ROBERT ONDERS, M.D., J.D., M.P.A.; President                                                                                    
Alaska Pacific University (APU)                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 233.                                                                          
                                                                                                                                
BRADLEY HARRIS, PhD;                                                                                                            
Associate Professor of Marine Biology                                                                                           
Alaska Pacific University (APU)                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified in support of HB 233.                                                                          
                                                                                                                                
MIKE SATRE, Manager                                                                                                             
Government and Community Relations                                                                                              
Hecla Greens Creek Mine;                                                                                                        
Board Member, Council of Alaska Producers                                                                                       
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:  Testified in support of HB 233.                                                                          
                                                                                                                                
BRANDON SPANOS, Deputy Director                                                                                                 
Tax Division                                                                                                                    
Department of Revenue (DOR)                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Answered questions during the  discussion of                                                            
HB 233.                                                                                                                         
                                                                                                                                
DAN STICKEL, Chief Economist                                                                                                    
Tax Division                                                                                                                    
Department of Revenue (DOR)                                                                                                     
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Answered questions during the  discussion of                                                            
HB 233.                                                                                                                         
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
8:01:33 AM                                                                                                                    
                                                                                                                                
CHAIR  HARRIET  DRUMMOND  called   the  House  Education  Standing                                                            
Committee  meeting   to  order  at  8:01  a.m.     Representatives                                                              
Drummond,  Talerico, Kopp,  Parish, and Johnston  were present  at                                                              
the call to order.                                                                                                              
                                                                                                                                
             HB 339-INCREASE BASE STUDENT ALLOCATION                                                                        
                                                                                                                                
8:02:27 AM                                                                                                                    
                                                                                                                                
CHAIR DRUMMOND  announced that the  first order of  business would                                                              
be  HOUSE BILL  NO.  339, "An  Act relating  to  the base  student                                                              
allocation; and providing for an effective date."                                                                               
                                                                                                                                
8:02:55 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  LES  GARA,  Alaska   State  Legislature,  said  he                                                              
appreciated  being  able  to share  what  schools  were  currently                                                              
experiencing with  inflation-adjusted funding at $90  million less                                                              
than in 2015.                                                                                                                   
                                                                                                                                
REPRESENTATIVE GARA turned to  slide 1, titled "Education Matters,                                                              
IT'S  TIME TO  INCREASE THE  BSA."  The slide  contained a  Nelson                                                              
Mandela quote, "Education  is the most powerful weapon  we can use                                                              
to change the world."                                                                                                           
                                                                                                                                
8:03:25 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARA  turned to slide 2, titled  "Lost Opportunity:                                                              
Lost  Forever,"  which  read   as  follows  [original  punctuation                                                              
provided]:                                                                                                                      
                                                                                                                                
     Students can not  come back to repeat the  4th grade ...                                                                   
     once we fix the budget crisis.                                                                                             
                                                                                                                                
REPRESENTATIVE GARA emphasized that the  effects of budget cuts on                                                              
children would result in permanent damage.                                                                                      
                                                                                                                                
REPRESENTATIVE GARA turned to slide 3,  titled, "HB 339:  A Modest                                                              
Increase," which read as follows [original punctuation provided]:                                                               
                                                                                                                                
     This  bill would  increase the  BSA by $100.  It is  co-                                                                   
     sponsored   by  Education  Chair   Drummond  and   Reps.                                                                   
     Spohnholz, Kawasaki, Tuck, Josephson, and Parish.                                                                          
                                                                                                                                
REPRESENTATIVE  GARA explained  that the  base student  allocation                                                              
(BSA)  of   $100  was   the  amount   that  the  legislature   has                                                              
traditionally increased  funding, when  it has  increased funding.                                                              
He  recalled that  education  had  "flat funding"  throughout  the                                                              
1990s  and education  funding was  experiencing  the same  effects                                                              
now.  He asked what impacts that would have on education.                                                                       
                                                                                                                                
8:04:20 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   GARA   turned   to  slide   4,   titled   "Juneau                                                              
Superintendent  Dr.  Mark  Miller  Put It  Well,"  which  read  as                                                              
follows [original punctuation provided]:                                                                                        
                                                                                                                                
     "Over  the past  five  years, the  BSA  has been  nearly                                                                   
     flat. Over  that same time,  my operating  expenses from                                                                   
     the  general fund  have increased  nearly 10%  . . .  We                                                                   
     have used our  general fund balance to  survive the last                                                                   
     couple of  years ? we are  now being forced  to consider                                                                   
     severe cuts to try to fill a  $3 million hole ... A $100                                                                   
     BSA student increase  would not solve this  problem, but                                                                   
     it would go a long way to help."                                                                                           
                                                                                                                                
REPRESENTATIVE GARA said any school  districts with reserves, such                                                              
as Juneau,  have used  their reserves to  "dampen" the  effects of                                                              
flat or lost  funding.  The Juneau School District  (JSD) has lost                                                              
a significant number of teachers,  class sizes have increased, and                                                              
the  district has  reached  a  point that  it  no  longer has  the                                                              
reserves to offset deeper cuts.                                                                                                 
                                                                                                                                
8:04:41 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARA  turned  to  slide 5,  titled  "K-12  Formula                                                              
funding,  FY-15-19 (Nominal  dollars),  which consisted  of a  bar                                                              
chart.   He  explained the  graph represented  actual dollars  not                                                              
adjusted  by  inflation,  mostly  reflected by  the  loss  of  $43                                                              
million budgeted in 2015.                                                                                                       
                                                                                                                                
REPRESENTATIVE  GARA  turned  to  slide 6,  titled  "The  Loss  is                                                              
Greater  When You  Consider Inflation:  $90 Million."   He  stated                                                              
that the  Legislative Finance  Division estimated  that the  state                                                              
education  funding  was  $90  million  lower  than  in  2015  when                                                              
considering inflation.  He said, "Those are dollars."                                                                           
                                                                                                                                
8:05:15 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARA  turned to  slide 10, titled  " Cuts  Have Hit                                                              
Students  Across  the  State,"  which read  as  follows  [original                                                              
punctuation provided]:                                                                                                          
                                                                                                                                
     In Anchorage, since 2013:                                                                                                  
     ? 394 FTE positions have been cut (a 9.3% reduction)                                                                       
     ? 216 of these were teachers                                                                                               
     ? The remaining were mostly teacher assistants                                                                             
      ? Classroom sizes have increased and will continue to                                                                     
     ...                                                                                                                        
                                                                                                                                
REPRESENTATIVE  GARA stated  that since 2013,  Anchorage has  lost                                                              
nearly  400  fulltime equivalent  (FTE)  positions;  approximately                                                              
half teachers along  with many teacher's assistant  positions.  He                                                              
related  that an  English as  a  second language  teacher did  not                                                              
think  it  was  possible  to  adequately  teach  by  herself  with                                                              
existing staff levels.                                                                                                          
                                                                                                                                
REPRESENTATIVE GARA turned  to slide 11, titled "At  The Same Time                                                              
in  Anchorage...," which  read  as  follows [original  punctuation                                                              
provided]:                                                                                                                      
                                                                                                                                
     ? Special education enrollment is up 3.2%                                                                                  
     ? Intensive needs enrollment is up 8.6%                                                                                    
     ? Preschool enrollment is up 34%                                                                                           
        ? And many fixed costs, such as health care, have                                                                       
     skyrocketed.                                                                                                               
                                                                                                                                
REPRESENTATIVE  GARA said  that at  the same  time enrollment  has                                                              
increased  for  some  of  the most  expensive  students  who  also                                                              
deserve  equal  education.   He  reported  that the  base  student                                                              
allocation  (BSA) was  close  to $6,000  per  student but  special                                                              
education  student costs  were at  $29,000.   He pointed out  that                                                              
under federal law  those students deserve an  equal opportunity to                                                              
reach their potential.                                                                                                          
                                                                                                                                
8:06:25 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARA  turned to  slide  12, titled  "Mat-Su  Faces                                                              
Similar  Cuts,"  which  read   as  follows  [original  punctuation                                                              
provided]:                                                                                                                      
                                                                                                                                
      ? Cut $8.4 million in FY 18, resulting in the loss of                                                                     
     87 FTE positions                                                                                                           
     ? Expects to face an $8 million deficit in FY 19                                                                           
       ? The district has cut 247 FTE teachers, classrooms                                                                      
     aides and classroom assistants since 2013, a 9.3% cut                                                                      
     ? Also cut roughly 8 special education instructors                                                                         
                                                                                                                                
8:06:56 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARA,  reviewing slide  12, estimated that  most of                                                              
the 87 FTE cuts would be teachers.                                                                                              
                                                                                                                                
REPRESENTATIVE GARA turned to slide  13, titled " Eagle River High                                                              
School  Student,"  which  read as  follows  [original  punctuation                                                              
provided]:                                                                                                                      
                                                                                                                                
     Annual pink slips cause her mother, a teacher, to think                                                                    
      about leaving Alaska. This is a teacher who has won a                                                                     
     Milliken Educator Award.                                                                                                   
                                                                                                                                
REPRESENTATIVE GARA emphasized this  slide highlighted the biggest                                                              
problem that transcends education and  the economy, which was that                                                              
the best teachers  are thinking about leaving.   When schools lose                                                              
their  best teachers,  the  schools  can no  longer  teach to  the                                                              
standards that  would meet  our expectations.   He said,  "I think                                                              
it's  fair  to  say  that  parents and  educators  do  not  see  a                                                              
commitment to public education coming from the state right now."                                                                
                                                                                                                                
                                                                                                                                
8:07:43 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARA turned to  slide 14, titled "Anchorage Student                                                              
at  Stellar,"   which  read   as  follows  [original   punctuation                                                              
provided]:                                                                                                                      
                                                                                                                                
     Her  brother  at  Romig  Middle  School  feels  with  30                                                                   
     students in his biology class,  he'd be disruptive if he                                                                   
     asked all his questions.                                                                                                   
                                                                                                                                
REPRESENTATIVE  GARA elaborated  that this student  walked out  of                                                              
class on many  days feeling that he  had not been able  to ask all                                                              
the questions he needed to ask.                                                                                                 
                                                                                                                                
8:08:09 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARA  turned to slide 15, titled  "Anchorage Alaska                                                              
School Board Member," which read  as follows [original punctuation                                                              
provided]:                                                                                                                      
                                                                                                                                
     To  avoid  additional  teacher cuts,  the  district  has                                                                   
     taken  away   course  planning  periods   for  teachers.                                                                   
     Estimated cuts  from future  flat funding (budgets  have                                                                   
     not yet been adopted):                                                                                                     
     ? 91 more FTE teacher losses in FY 19                                                                                      
     ? 107 more FTE teacher losses in FY20                                                                                      
     Admin  and  support  already   cut  by  28.5%,  includes                                                                   
     teacher training.                                                                                                          
                                                                                                                                
REPRESENTATIVE GARA  asked members  to realize that  "flat funding                                                              
is a  cut."   He stated  that Anchorage,  as well  as most  school                                                              
districts, have tried  to focus on administrative cuts.   The next                                                              
cuts would  impact teachers,  classrooms, and  curriculum as  flat                                                              
funding continues.                                                                                                              
                                                                                                                                
8:09:09 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARA turned  to  slide 16,  titled "Wrangell  High                                                              
School  Student,"  which  read as  follows  [original  punctuation                                                              
provided]:                                                                                                                      
                                                                                                                                
     School no longer  provides 3 years of  foreign language,                                                                   
     which is required by many  colleges. Consequently, needs                                                                   
     to  take  non-interactive,  on-line  courses  and  watch                                                                   
     videos. No teacher engagement.                                                                                             
                                                                                                                                
REPRESENTATIVE   GARA   characterized   non-interactive,   on-line                                                              
courses, and watching videos as being "reading, not learning."                                                                  
                                                                                                                                
8:09:40 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARA  turned to slide 17, titled  "15-year-old JDHS                                                              
student," which read as follows [original punctuation provided]:                                                                
                                                                                                                                
     Class sizes are increasing. Hears people and peers talk                                                                    
     about leaving Alaska. Is discouraged.                                                                                      
                                                                                                                                
REPRESENTATIVE GARA referred  to this as a "brain  drain" from the                                                              
State of  Alaska, and wondered  if this  was the legacy  that this                                                              
legislature wanted.                                                                                                             
                                                                                                                                
8:10:00 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARA turned  to  slide 18,  titled "Juneau  School                                                              
District  Rep,"  which  read   as  follows  [original  punctuation                                                              
provided]:                                                                                                                      
                                                                                                                                
     Flat funding means recent losses of:                                                                                       
     ? nurses                                                                                                                   
     ? Tlingit language teachers                                                                                                
     ? classroom and special ed teachers                                                                                        
     It is threatening burn-out of the best teachers. Class                                                                     
     choice is down. Classes sizes are up.                                                                                      
                                                                                                                                
REPRESENTATIVE GARA  reminded members  of the science  teacher who                                                              
reported  that her  science class  size  increased from  28 to  32                                                              
students in  middle school, which  was the breaking point  for her                                                              
to provide individual education.   He emphasized the need to teach                                                              
to the student and not "bulk teach."                                                                                            
                                                                                                                                
8:10:42 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARA turned  to  slide 19,  titled "Juneau  School                                                              
Board Member," which read as follows                                                                                            
                                                                                                                                
     ? District has cut 92 teacher and other positions                                                                          
       ? Facing continued cuts without inflation-adjusted                                                                       
     funding                                                                                                                    
     ? Cut Middle School counselors for 100 students from 2                                                                     
     - 1                                                                                                                        
    ?   Want    to   train    to   higher   standards    but                                                                    
         "administration" cuts includes cuts to teacher                                                                         
     instructional coaches.                                                                                                     
                                                                                                                                
REPRESENTATIVE GARA,  reviewing slide 19, commented that  the cuts                                                              
will  largely be  deeper in  the classroom  as the  superintendent                                                              
previously testified  at an earlier  hearing.  The state  has been                                                              
asking teachers  to teach  to higher  standards; however,  cuts to                                                              
administration  equated to  training teachers  to teach to  higher                                                              
standards that has a direct impact on the classroom.                                                                            
                                                                                                                                
8:11:15 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARA  turned to slide 21, titled  "Anchorage School                                                              
District  CFO,"  which  read   as  follows  [original  punctuation                                                              
provided]:                                                                                                                      
                                                                                                                                
     ? Class sizes are up                                                                                                       
     ? Eliminated funds for teacher professional training                                                                       
     ? Cut 122 positions last year                                                                                              
     ? Cutting support for gifted students                                                                                      
     ? Have focused past cuts outside the classroom as much                                                                     
     as possible                                                                                                                
     ? Future cuts will hit the classroom harder                                                                                
                                                                                                                                
REPRESENTATIVE GARA  stated no student  was more equal  than other                                                              
students,  for example,  schools  are  losing support  for  gifted                                                              
students.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  GARA  turned  to  slide 22,  titled  "AEA  Re  and                                                              
Teachers," which read as follows [original punctuation provided]:                                                               
                                                                                                                                
       ? At schools without high income parents, cuts hit                                                                       
     harder                                                                                                                     
     ? Combining ESL and IEP students in same classes                                                                           
                                                                                                                                
REPRESENTATIVE  GARA recalled  a teacher at  Clark Middle  School,                                                              
one of  the lower income schools  in Anchorage, told him  that the                                                              
school combined English  as a second language  and IEP [Individual                                                              
Education Program].   These  student groups do  not have  the same                                                              
needs, he said.  He characterized  some schools resorting to "bulk                                                              
teaching."                                                                                                                      
                                                                                                                                
8:12:13 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARA  turned to slide 23, titled  "Kenai Peninsulas                                                              
School  District," which  read  as  follows [original  punctuation                                                              
provided]:                                                                                                                      
                                                                                                                                
     ? No music taught in many schools now                                                                                      
     ? Have tried not to cut teachers, have cut elsewhere                                                                       
     ? Future cuts WILL hit teachers                                                                                            
                                                                                                                                
REPRESENTATIVE GARA  cautioned members  that cutting  teachers was                                                              
coming  and  that the  Kenai  School  District has  exhausted  its                                                              
reserves.   Since 2009, the state  has enjoyed one strong  year of                                                              
school funding  and the rest have  been close to flat  funding, he                                                              
said.                                                                                                                           
                                                                                                                                
8:12:46 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARA  turned to  slide 24, titled  "Cordova," which                                                              
read as follows [original punctuation provided]:                                                                                
                                                                                                                                
     ? Spreading teachers too thin                                                                                              
     ? No nurses                                                                                                                
        ? Chemistry not offered every year. This affects                                                                        
     college applications.                                                                                                      
     ? One student could not fit chemistry in schedule last,                                                                    
        can't take chemistry this year, will have to wait                                                                       
     another year.                                                                                                              
      ? Can't realistically teach ESL students with only 1                                                                      
     teacher                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARA stated  a student  in Cordova  must wait  two                                                              
years to take chemistry and she  expressed concern that this would                                                              
adversely  affect her  college  application.   He emphasized  that                                                              
these cuts impact  students and their ability to  reach their full                                                              
potential and  be part of  an educated  work force that  will move                                                              
this state forward.                                                                                                             
                                                                                                                                
8:13:24 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARA  turned  to  slide 25,  titled  "Seward  High                                                              
School  and  Soldotna  Prep,"  which  read  as  follows  [original                                                              
punctuation provided]:                                                                                                          
                                                                                                                                
     ? 1 music teacher for combined middle and high                                                                             
     school in Seward                                                                                                           
     ? Soldotna Prep - no choir or band, or art classes.                                                                        
                                                                                                                                
REPRESENTATIVE GARA  said that things  like music matter  and that                                                              
children do not go to school just to learn the three Rs.                                                                        
                                                                                                                                
REPRESENTATIVE GARA  turned to  slide 26,  titled "Let's  not make                                                              
this mistake."  He offered his  belief that an undereducated child                                                              
or one not  educated to reach his/her potential "is  a child who's                                                              
lost."                                                                                                                          
                                                                                                                                
8:14:15 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARA offered  to  correct an  earlier estimate  he                                                              
gave for  the BSA  increase of  $100, which  he had  indicated was                                                              
approaching  $30 million;  however,  the  fiscal note  calculation                                                              
using current student counts estimates the BSA at $25 million.                                                                  
                                                                                                                                
8:14:37 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARA turned to slide  27, titled "Thank you," which                                                              
read as follows [original punctuation provided]:                                                                                
                                                                                                                                
     Thank you for your commitment to Alaska's youth.                                                                           
                                                                                                                                
He said the state does not currently  have a plan to eliminate the                                                              
$2.5 billion  budget deficit.   Of course, legislators  have their                                                              
own ideas,  but a  fiscal plan  does not  exist.  Students  cannot                                                              
wait  for the  state  to  solve fiscal  problems,  he  said.   His                                                              
presentation was an effort to  "paint a picture" for the committee                                                              
that illustrated the  issues many school districts  throughout the                                                              
state face with the base student allocation (BSA).                                                                              
                                                                                                                                
8:15:58 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARA  referred to  a letter from  [Shannon Johnson-                                                              
Nanalook, Iliamna  community member and mother], and  read several                                                              
sentences, "I have  seen our Lake and Peninsula  District save and                                                              
cut with  the flat  funding we  have received  now in  the past  4                                                              
years.  We have  eliminated programs and then last  year we had no                                                              
choice  but to  cut  school days  off our  school  calendar."   He                                                              
offered his  belief that this  was not  any way to  move education                                                              
forward.   He  concluded  by stating  that  this  was a  statewide                                                              
problem.                                                                                                                        
                                                                                                                                
8:17:09 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KOPP  asked  for  further  clarification  that  in                                                              
fiscal  year  [FY]  15 the  legislature  distributed  $43  million                                                              
"outside" the [foundation] formula.                                                                                             
                                                                                                                                
REPRESENTATIVE GARA responded that he  thought that was a fair way                                                              
to  state  it.   He  clarified  that  the additional  funding  was                                                              
distributed through  the [foundation] formula under  the formula's                                                              
calculation as  to which districts  received the money,  just like                                                              
the  BSA; however,  it was  not made  as  an increase  to the  BSA                                                              
itself.   That  additional  funding went  to  school districts  as                                                              
though it was [foundation] formula funding.                                                                                     
                                                                                                                                
8:17:41 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KOPP related  his understanding that it  was a one-                                                              
time appropriation;  that it was not  in the budget in  a previous                                                              
FY  and  it  was not  after  FY  15.    He pointed  out  that  the                                                              
legislature increased the BSA by $50  BSA in FY 16 and again in FY                                                              
17.  By using  the one-time appropriation of $43 million  in FY 15                                                              
as a baseline,  it appeared that the legislature  was dropping the                                                              
ball.   Although he did not  disagree that the state  needed money                                                              
for education, he clarified the state has increased the BSA.                                                                    
                                                                                                                                
REPRESENTATIVE GARA acknowledged  that it was fair to  say it that                                                              
way.    He  acknowledged  substantial  debate  happened  when  the                                                              
legislature passed the  bill in 2015.  Many  legislators felt that                                                              
the declining money in out years  was not appropriate and it would                                                              
result  in budget  cuts to  schools.   He clarified  that the  $43                                                              
million  was  distributed through  the  formula,  but it  was  not                                                              
included in  the annual BSA.   He added  that there  was "outside"                                                              
funding  that was  to be distributed  through  the formula  in the                                                              
following year.  Although he  and Representative Drummond objected                                                              
to the deletion  of that funding; the funding was  deleted.  There                                                              
was supposed  to be  funding in  the next  two years  "outside the                                                              
formula" to be  distributed through the BSA, but  that funding was                                                              
"wiped out of the  budget in 2016 and 2017."   It was not supposed                                                              
to disappear the  way it did.  He  said, "There would be  a lot of                                                              
back and forth  between school districts about  whether losing $43                                                              
million is not losing $43 million," he said.                                                                                    
                                                                                                                                
8:20:09 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KOPP said he was interested  in what was being used                                                              
as a baseline since  he viewed FY 15 as a  one-time cash infusion.                                                              
He offered his belief that the point  could be made in other ways.                                                              
Without including the  $43 million - the one-time  case infusion -                                                              
it   appeared   that   the   funding   would   show   year-by-year                                                              
improvements.                                                                                                                   
                                                                                                                                
REPRESENTATIVE GARA said  he did not want to  argue about funding,                                                              
acknowledging  there  are many  ways  to  consider funding.    For                                                              
example,  he   could  have  added   in  money  spent   for  school                                                              
construction,  which  is funding  that  was  not directed  to  the                                                              
classroom.    Instead  he  wanted  to focus  on  how  funding  has                                                              
impacted  schools,  including  reductions   of  approximately  400                                                              
teachers and staff in Anchorage,  with an estimated additional 100                                                              
cuts to teachers this  next year.  The money was  not as important                                                              
as  what  is happening  to  school,  which  has resulted  in  lost                                                              
courses, teachers, nurses, and lost opportunities.                                                                              
                                                                                                                                
8:21:40 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  KOPP  offered  that   Representative  Gara  raised                                                              
important issues.   He stated that  the number one cost  driver in                                                              
education was healthcare.   Instead of aggressively  reforming the                                                              
way to  take care of  teachers and staff  and figuring out  how to                                                              
more optimally pay  the costs, the state just finds  more money in                                                              
the BSA.   He  said this underscored  why the  state must  look at                                                              
better  ways  to   review  the  highest  cost   drivers  to  avoid                                                              
increasing  appropriations to  wrestle with  very serious  funding                                                              
problems.   He said  he thinks that  our teachers  do suffer.   He                                                              
indicated that health  care was the most critical  issue the state                                                              
needed  to address  since that  drives  the cost  in every  school                                                              
district.                                                                                                                       
                                                                                                                                
REPRESENTATIVE  GARA agreed  with  Representative  Kopp on  health                                                              
care costs.   He  did not think  any bills  comprehensively change                                                              
health care  costs.  The state  needs to get serious  about health                                                              
care costs, he said.                                                                                                            
                                                                                                                                
8:23:00 AM                                                                                                                    
                                                                                                                                
CHAIR DRUMMOND  interjected that the  highest budget cost  for any                                                              
school district  was for  people, next to  health insurance.   She                                                              
offered  her  belief  that  as  health  insurance  costs  increase                                                              
teachers are  cut.  This was no  way to run school  districts, she                                                              
said.                                                                                                                           
                                                                                                                                
8:23:23 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSTON   asked  whether  the   Anchorage  School                                                              
District (ASD) 34 percent increase  in preschool was for preschool                                                              
students with IEPs.                                                                                                             
                                                                                                                                
REPRESENTATIVE GARA  offered to research and respond;  however, he                                                              
thought it reflected overall preschool costs.                                                                                   
                                                                                                                                
8:23:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSTON related  her understanding  that the  ASD                                                              
was innovative  with preschool  by allowing non-profit  preschools                                                              
to use  ASD facilities.   She  said the  ASD's superintendent  has                                                              
publicly  said  this  was  the best  method  because  it  provided                                                              
quality preschool to more students for less funding.                                                                            
                                                                                                                                
REPRESENTATIVE  JOHNSTON   remarked  that  she  got   a  different                                                              
perspective  when students  and school boards  visited her  office                                                              
this  year.   She reported  that  there are  some exciting  things                                                              
going on in  the state, including exciting  innovations and cross-                                                              
fertilization among school districts.   Although she would like to                                                              
think this happens when the state has  a lot of money it does not.                                                              
She heard  from students sharing  fascinating stories.   She said,                                                              
"I didn't hear  all the doom and  gloom you did."   She reiterated                                                              
that  some exciting  things  were  going on.    She asked  whether                                                              
Representative Gara had been part  of the education challenge.  In                                                              
terms  of  health care,  she  argued  that many  legislators  were                                                              
actively working  on health care.  It  takes time to address.   In                                                              
terms of a fiscal plan, she noted  that both houses had a majority                                                              
vote  for percent  of market  value (POMV).   She  hoped that  the                                                              
legislature would be able to achieve  a POMV because it would be a                                                              
start of a fiscal plan.                                                                                                         
                                                                                                                                
8:26:32 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GARA indicated he has  also heard from students who                                                              
were thriving, and  from parents whose children  are thriving, and                                                              
teachers who  are doing  their best.   He argued  that it  did not                                                              
make up  for the fact  that chemistry  was only offered  every two                                                              
years in some  schools nor did it  make up for students  not being                                                              
able to ask  questions in class because the classes  are so large.                                                              
He offered  his belief that schools  were doing the best  they can                                                              
with what  they have.  He  applauded educators who were  doing so.                                                              
He  said there  was a  difference  between parents  who are  fully                                                              
engaged  with  their   children  and  those  who  are   not.    He                                                              
characterized it as  a dividing line that has always  existed.  He                                                              
did not  think that  the legislature  was doing  what it  could to                                                              
give  students  in  Alaska  the  ability  to  achieve  their  full                                                              
potential.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  GARA said  he would  not  deny that  lots of  good                                                              
things were happening.  While  some things were being addressed in                                                              
terms  of   health  care,  he   felt  the  legislature   lacked  a                                                              
comprehensive effort to make meaningful  reductions on health-care                                                              
costs.   He  applauded the  efforts being  made, in  terms of  the                                                              
price  transparency bill.   He  said he  thought it  would take  a                                                              
statewide and community effort to solve that will take time.                                                                    
                                                                                                                                
8:28:23 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSTON  offered her belief that  the Municipality                                                              
of Anchorage has passed the best transparency bill.                                                                             
                                                                                                                                
8:28:32 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PARISH asked  why the legislature  should let  the                                                              
value of our students' education be gnawed away at by inflation.                                                                
                                                                                                                                
CHAIR DRUMMOND  expressed concern  to hear that  special education                                                              
students were  in the  same classes  as ESL  [English as  a Second                                                              
Language]  students.   She characterized  it as  abominable.   She                                                              
asked for further clarification on  the cost for special education                                                              
students.                                                                                                                       
                                                                                                                                
REPRESENTATIVE GARA  recalled that  in the mid-2000s,  funding was                                                              
increased to approximately $29,000.                                                                                             
                                                                                                                                
8:29:19 AM                                                                                                                    
                                                                                                                                
CHAIR DRUMMOND  pointed out that  intensive needs'  enrollment was                                                              
up 8.6  percent.  She said  this group included  medically fragile                                                              
children that require  nursing assistance and other  services that                                                              
cost $70,000  per  year.  She  offered her  belief that  preschool                                                              
enrollment  was up  because income  is also  down.  She  predicted                                                              
that more  kids are eligible for  programs such as Head  Start and                                                              
other  similar programs  due  to  socioeconomic conditions.    She                                                              
expressed  an  interest  in  hearing from  the  ASD  on  preschool                                                              
enrollment.   She said that we  need to have  additional preschool                                                              
classes.                                                                                                                        
                                                                                                                                
REPRESENTATIVE GARA  said that  what resonated  most with  him was                                                              
that a child  who does not receive the education  he/she needed in                                                              
6th grade would not come back five years later for it.                                                                          
                                                                                                                                
CHAIR DRUMMOND announced that HB 339 would be held over.                                                                        
                                                                                                                                
          HB 233-EDUCATION TAX CREDITS; SUNSET; REPEALS                                                                     
                                                                                                                                
8:30:41 AM                                                                                                                    
                                                                                                                                
CHAIR DRUMMOND announced that the  next order of business would be                                                              
HOUSE  BILL  NO.  233,  "An Act  relating  to  the  insurance  tax                                                              
education credit, the income tax  education credit, the oil or gas                                                              
producer education credit, the  property tax education credit, the                                                              
mining   business  education   credit,   the  fisheries   business                                                              
education  credit,   and  the   fisheries  resource   landing  tax                                                              
education  credit; providing  for an effective  date by  repealing                                                              
the effective dates of secs. 3, 5,  7, 10, 14, 16, 18, 21, 23, 25,                                                              
28, 30, 32,  35, 37, 39, 42, 44,  46, 49, 51, 53, and  55, ch. 92,                                                              
SLA 2010, sec.  14, ch. 7, FSSLA  2011, secs. 15, 17,  19, 21, 23,                                                              
and 25,  ch. 74, SLA  2012, sec. 49, ch.  14, SLA 2014,  secs. 37,                                                              
40, 43,  and 46, ch. 15,  SLA 2014, and  secs. 26 and 31,  ch. 61,                                                              
SLA  2014;  providing  for  an  effective  date  by  amending  the                                                              
effective  date of  secs. 1,  2, and  21,  ch. 61,  SLA 2014;  and                                                              
providing for an effective date."                                                                                               
                                                                                                                                
8:31:06 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CHRIS  TUCK,  Alaska  State  Legislature,  thanked                                                              
members for hearing  the bill today.  He stated that  HB 233 would                                                              
extend the education tax credit program  from December 31, 2018 to                                                              
January 1, 2025 and ensure that  the credits that exist in statute                                                              
today  will  continue  to  support   our  education  programs  and                                                              
institutions.                                                                                                                   
                                                                                                                                
REPRESENTATIVE TUCK  stated that the education tax  credit program                                                              
would allow  private businesses  to make charitable  contributions                                                              
to  support  public and  private  education  in Alaska.    Private                                                              
businesses can  fund institutions  and programs  throughout Alaska                                                              
with  direct  monetary  contributions  or  provide  equipment  and                                                              
supplies.  He said the objective  was to help the next generation.                                                              
He related that the fishing, mining,  construction and oil and gas                                                              
industries can  contribute to education programs  and institutions                                                              
but can  also foster  student' interest  in career  opportunities.                                                              
He characterized the  education tax credit as  a direct connection                                                              
between businesses, our education system and students.                                                                          
                                                                                                                                
8:32:48 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KOPP remarked that he  was excited about this bill.                                                              
He  said that  he  had heard  from  several industries,  including                                                              
Hecla Mining  Company, Greens  Creek and  oil and gas  industries.                                                              
He agreed  that this  makes education  directly responsive  to the                                                              
needs of  the local  communities and it  promotes a  strong Alaska                                                              
labor:   local labor  and local hire.   He  characterized it  as a                                                              
great policy  to move  forward.  He  offered his  complete support                                                              
for HB 233.                                                                                                                     
                                                                                                                                
8:34:07 AM                                                                                                                    
                                                                                                                                
SUSAN FOLEY,  President, University  of Alaska Foundation,  stated                                                              
she has submitted a letter of support  for HB 233.  The University                                                              
of  Alaska  (UAA)  has  been one  of  the  highest  recipients  of                                                              
contributions  of education  tax  credits.   The  impact has  been                                                              
significant.   She  related that  many companies  in Alaska  would                                                              
like   to  support   education  in   Alaska.     These   companies                                                              
strategically engage in multi-year planning  to have impact over a                                                              
sustained period  of a time.   They  also want their  employees to                                                              
see the  results of  their contributions.   She  characterized the                                                              
six-year  extension of  this  bill as  very  important because  it                                                              
enables companies to partner with  educational institutions and to                                                              
institute and  foster programs.   She found the  multi-year aspect                                                              
of HB 233 as allowing companies to be influential.                                                                              
                                                                                                                                
MS.  FOLEY stated  that the  University of  Alaska Foundation  has                                                              
received  feedback from corporations  that the  way the  education                                                              
tax credit  program was structured  creates a major  incentive for                                                              
their donations.   The structure  allowed corporations to  see the                                                              
direct  impact of  their  donations  and receive  recognition  for                                                              
their  support.   This  enables  them  to partner  in  significant                                                              
programs  that  will  benefit their  future  business  enterprise.                                                              
Finally,  for an  academic institution,  the  long-term nature  of                                                              
this  extension  was important  because  it  takes time  to  start                                                              
programs,  get them  running  efficiently,  recruit students,  and                                                              
bring things  to fruition.   She acknowledged and  appreciated the                                                              
work legislators make.                                                                                                          
                                                                                                                                
8:38:36 AM                                                                                                                    
                                                                                                                                
ROBERT  ONDERS,  M.D.,  J.D., M.P.A.;  President,  Alaska  Pacific                                                              
University  (APU),   offered  his   support  for   HB  233.     He                                                              
characterized  this  bill  as   providing  a  critical  connection                                                              
between industry, education, and  students.  This bill facilitates                                                              
community-based research  that engages students with  industry and                                                              
the  external  community,  which was  an  essential  component  of                                                              
education at Alaska Pacific University (APU).                                                                                   
                                                                                                                                
8:39:28 AM                                                                                                                    
                                                                                                                                
BRADLEY  HARRIS,  PhD;  Associate  Professor  of  Marine  Biology,                                                              
Alaska Pacific University  (APU), offered his support  for HB 233.                                                              
He  reiterated the  importance  of  this bill  in  terms of  APU's                                                              
educational profile.  He related his experience as a professor.                                                                 
                                                                                                                                
DR. HARRIS  said he  has seen  industry resources  go directly  to                                                              
support student  outcomes.   He said that  the tax  credit program                                                              
was  working  as designed.    It  has provided  opportunities  for                                                              
students in  Alaska to  obtain a  high-quality education  in areas                                                              
that directly  align  with needs  within Alaska.   He stated  that                                                              
this program provided opportunities  for world class education and                                                              
research  opportunities  and  created  a  "win-win"  solution  for                                                              
educational institutions, industry, and students.                                                                               
                                                                                                                                
8:40:38 AM                                                                                                                    
                                                                                                                                
DR. HARRIS  offered to  outline four  things that highlighted  the                                                              
strategic components  of the tax  credit program.  First,  the tax                                                              
credit  program  has  allowed  professors,  such  as  himself,  to                                                              
recruit  and  support  excellent students  throughout  Alaska  and                                                              
outside  Alaska.   He  said  this  was particularly  important  in                                                              
natural resource fields, which are  highly competitive fields.  He                                                              
pointed  out that  the  tax credit  program  provides tuition  and                                                              
project  support,  which  are critical  elements  when  recruiting                                                              
students.  Second,  the  program  has allowed  the  university  to                                                              
invest in  strategically important research areas,  in particular,                                                              
applied research projects  require high levels of  engagement from                                                              
practicing professionals;  for example,  researchers from  federal                                                              
and  state agencies  and other  universities are  drawn to  Alaska                                                              
because of  the type  of research being  performed.   Our students                                                              
benefit  from  this,   he  said.    These   robust  and  strategic                                                              
partnerships  can be  developed with  state, federal,  industrial,                                                              
and  private  partners  and  ultimately   produce  new  levels  of                                                              
funding.                                                                                                                        
                                                                                                                                
DR. HARRIS said the third thing  was that since the university has                                                              
ongoing projects it  can submit proposals, which  have experienced                                                              
a high-rate  of success,  which results  in value-added  growth in                                                              
these  programs.   Finally, APU  has been  expanding research  and                                                              
education  with partnerships  in  the nation  and  worldwide.   He                                                              
related  that APU  had researchers  from  Cornell University,  the                                                              
Smithsonian, National Oceanic and  Atmospheric Administration, the                                                              
US  Geological  Survey,  US  Fish &  Wildlife  Service  and  ADF&G                                                              
actively  working  with  students  to  address  natural  resources                                                              
issues important to  Alaska.  He referred to a  letter in members'                                                              
packets  that  contained  a  list  outlining  some  very  specific                                                              
outcomes including listing  home towns of students  and where they                                                              
are working.   He said  that list was  a small subset  of students                                                              
that were being impacted by the tax  credit program in HB 233.  He                                                              
hoped that would illustrate his point  that the tax credit program                                                              
works.  He asked members to please support HB 233.                                                                              
                                                                                                                                
8:43:22 AM                                                                                                                    
                                                                                                                                
MIKE  SATRE, Manager,  Government and  Community Relations,  Hecla                                                              
Greens  Creek Mine;  Board Member;  Council  of Alaska  Producers,                                                              
stated  that his  wife  has also  spent 20  years  working in  the                                                              
Juneau School  District.   The work  this committee  does directly                                                              
affects his family and he appreciated members' service.                                                                         
                                                                                                                                
MR.  SATRE   offered  general  comments   on  tax  policy.     The                                                              
legislature holds  many discussions on  tax policy.  We  know that                                                              
we can  tax things to curtail  activities that are  not beneficial                                                              
to our  communities or the  legislature can provide  incentives by                                                              
rolling back taxes.  He characterized  the education tax credit as                                                              
a means  to encourage industry  to invest in  Alaska's educational                                                              
system, both at  the secondary level and with  our universities by                                                              
forming  partnerships.    This  benefits companies  but  also  the                                                              
regions companies operate in to build  community and capacity.  He                                                              
offered his  belief that  one of  the private sector's  challenges                                                              
was  recruitment and  retention  of  an Alaskan  work  force.   As                                                              
Alaska works to grow its economy,  that challenge will become even                                                              
greater.   This has  been something that  Hecla Greens  Creek mine                                                              
has recognized, that attracting Alaskan  workers provides a stable                                                              
work  force  since  they  stay  longer  and  contribute  to  their                                                              
community.                                                                                                                      
                                                                                                                                
MR.  SATRE said  he also  recognized  that posting  a job  opening                                                              
would not necessarily provide  the highly skilled, highly-educated                                                              
work force  Greens Creek mine needs.   The industry does  not have                                                              
the capacity to  provide all the training  necessary; however, the                                                              
universities do.   In 2011, Hecla  Greens Creek looked  to partner                                                              
with  the University  of  Alaska [Southeast]  (UAS)  to develop  a                                                              
program called "Pathways to Mining  Careers."  This program starts                                                              
with a  college course that high  school juniors and  seniors take                                                              
that provides a  broad survey of hundreds  of career opportunities                                                              
in the  mining industry.  This  program provides students  with an                                                              
educational  foundation for  choices they may  make when  choosing                                                              
their  professions.   Once  they take  that  course, Hecla  Greens                                                              
Creek tries to  direct interested students into  a two-year diesel                                                              
mechanic  degree program  at the  Career  and Technical  Education                                                              
program  at  UAS.     He  emphasized  that   the  diesel  mechanic                                                              
represented one  of the mine's  greatest needs.   He characterized                                                              
the  diesel  mechanic  program  as  a  high-tech  profession  that                                                              
requires  specialized  training.    Hecla  Greens  Creek  provides                                                              
scholarships  for students,  an internship,  and ultimately  hopes                                                              
students will choose them as an  employer.  Between 2011-2016 over                                                              
200  students  have  taken  the entry  level  course,  with  13-14                                                              
students completing  the two-year  degree program.   Further, many                                                              
of these students have chosen to  work for Greens Creek mine, live                                                              
in Juneau, and provide for their families.                                                                                      
                                                                                                                                
8:46:55 AM                                                                                                                    
                                                                                                                                
MR. SATRE offered  that his company has  also endowed scholarships                                                              
at the University of Alaska Fairbanks  and geology scholarships at                                                              
the University of  Alaska Anchorage, and Hecla  Greens Creek works                                                              
with secondary  schools  in the  region to develop  interest.   He                                                              
urged members  to support  this bill  and pass it  on to  the next                                                              
committee of  referral.   He acknowledged  that the  program would                                                              
sunset at the end  of the year, making it very  difficult to bring                                                              
this  valuable  tax   credit  into  existence.     He  appreciated                                                              
Representative Tuck introducing this bill.                                                                                      
                                                                                                                                
8:47:35 AM                                                                                                                    
                                                                                                                                
CHAIR DRUMMOND asked whether the  partnership with UAS begins with                                                              
junior and  seniors in high  school and  was not limited  to post-                                                              
secondary training.                                                                                                             
                                                                                                                                
MR.  SATRE responded  that  current students  were  more aware  of                                                              
educational tracks  and professions  much earlier, so  the company                                                              
felt it was important to start its  program to benefit high school                                                              
students  to give  them an opportunity  to follow  a pathway  that                                                              
will benefit them.                                                                                                              
                                                                                                                                
CHAIR  DRUMMOND commented  there  was a  theory  that states  that                                                              
students in  second or third  grade know what  they want to  do as                                                              
adults.  She closed invited testimony.                                                                                          
                                                                                                                                
8:49:37 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  PARISH  asked  for further  clarification  on  the                                                              
types of business that uses the tax education credit.                                                                           
                                                                                                                                
8:50:16 AM                                                                                                                    
                                                                                                                                
BRANDON  SPANOS,  Deputy  Director, Tax  Division,  Department  of                                                              
Revenue  (DOR), responded  that  in 2016,  37  companies used  the                                                              
education  tax credit,  varying from  oil  and gas  and mining  to                                                              
banking and retail sector.  He  said that any corporate income tax                                                              
payer  with  qualifying  donations  could use  the  education  tax                                                              
credit.                                                                                                                         
                                                                                                                                
REPRESENTATIVE PARISH was  hoping to learn about  the average size                                                              
of the companies using the education tax credit program.                                                                        
                                                                                                                                
MR.  SPANOS said  that most  companies were  large multi-state  or                                                              
multi-national companies.                                                                                                       
                                                                                                                                
REPRESENTATIVE PARISH asked if he  had any idea about the smallest                                                              
company.                                                                                                                        
                                                                                                                                
MR. SPANOS deferred to Mr. Stickle.                                                                                             
                                                                                                                                
8:52:02 AM                                                                                                                    
                                                                                                                                
DAN STICKEL, Chief Economist, Tax  Division, Department of Revenue                                                              
(DOR), stated that the primary  business are large businesses.  He                                                              
pointed out  that these companies must  be large enough to  have a                                                              
significant corporate  income tax  liability to apply  these types                                                              
of credits.   The primary  beneficiaries would be  large resource-                                                              
oriented companies.                                                                                                             
                                                                                                                                
8:52:27 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KOPP  offered his  belief that  these would  be the                                                              
same  companies  producing  the  same  employees  that  make  this                                                              
community work; ones that fund everything.                                                                                      
                                                                                                                                
CHAIR DRUMMOND reiterated these companies  must be large enough to                                                              
have  a significant  corporate income  tax liability  in order  to                                                              
make contributions like this.                                                                                                   
                                                                                                                                
MR. STICKEL agreed.                                                                                                             
                                                                                                                                
8:52:58 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE PARISH expressed an  interest in exploring ways for                                                              
the smaller companies  to participate, as well.  He  was unsure of                                                              
the  threshold  but  said  that   currently  the  sweet  spot  for                                                              
donations  seemed to  be  $300,000.   He would  like  to see  that                                                              
lowered.  He stated  that the amount of the credit  was 50 percent                                                              
of contributions  of  not more  than $100,000;  100 percent  up to                                                              
$300,000  of  contributions;  and  50 percent  of  the  amount  of                                                              
contributions that exceed $300,000  [as per AS 43.20.014 (12)(b)].                                                              
He recalled the cap was $5 million.   He related his understanding                                                              
this could discourage companies that  could not reach the $300,000                                                              
"sweet spot"  from participating.   He said  he thought  that some                                                              
smaller   businesses  in  the   state  would   be  interested   in                                                              
participating in  a program that  promotes education in  the state                                                              
for excellent causes.                                                                                                           
                                                                                                                                
8:54:41 AM                                                                                                                    
                                                                                                                                
CHAIR DRUMMOND  acknowledged that the  names of the  companies was                                                              
confidential  information.    She  said that  if  those  companies                                                              
wanted to  identify themselves,  nothing would  prevent them  from                                                              
doing so; for  example, Hecla Greens Creek or  the other companies                                                              
that visited  her office and  revealed themselves  as participants                                                              
who helped create jobs and training in Alaska.                                                                                  
                                                                                                                                
MR. SATRE agreed that was correct.                                                                                              
                                                                                                                                
8:55:16 AM                                                                                                                    
                                                                                                                                
CHAIR DRUMMOND encouraged companies to identify themselves if                                                                   
they so choose.                                                                                                                 
                                                                                                                                
8:55:33 AM                                                                                                                    
                                                                                                                                
CHAIR DRUMMOND announced that HB 233 would be held over.                                                                        
                                                                                                                                
8:55:45 AM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Education Standing Committee meeting was adjourned at 8:56 a.m.                                                                 

Document Name Date/Time Subjects
HB 233 Fiscal Note.pdf HEDC 2/16/2018 8:00:00 AM
HB 233
HB0233A.PDF HEDC 2/16/2018 8:00:00 AM
HB 233
HB 233 Supporting Document - APA Letter of Support 2.13.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 233
HB233 Additional Documents - DOR Education Tax Credit Report CY2017. 2.7.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 233
HB233 Additional Documents - FY2012-FY2016 Education Tax Credits 2.7.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 233
HB233 HEDU Committee Packet 2.16.2018.pdf HEDC 2/16/2018 8:00:00 AM
HB 233
HB233 Sectional Analysis.pdf HEDC 2/16/2018 8:00:00 AM
HB 233
HB233 Sponsor Statement 2.7.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 233
HB233 Support Documents - Support Letters 2.7.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 233
HB233 Supporting Document - APU 2.6.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 233
HB233 Supporting Document - NACTEC support letter and tax credit info 2.6.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 233
HB233 Supporting Document - Silver Bay Seafoods Letter 2.12.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 233
HB233 Supporting Documents - Resolutions from Communities 2.9.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 233
HB 339 Bill Version R 2.14.18.PDF HEDC 2/16/2018 8:00:00 AM
HB 339
HB 339 Fiscal Note DEED Mt. Edgecumbe 2018 2.14.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 339
HB 339 Fiscal Note DEED Fund Capitalization 2018 2.14.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 339
HB 339 Fiscal Note DEED Support Services 2018 2.14.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 339
HB 339 HEDU Committee Packet 2.16.2018.pdf HEDC 2/16/2018 8:00:00 AM
HB 339
HB 339 Sectional Analysis 2.14.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 339
HB 339 Sponsor Statement 2.14.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 339
HB 339 Supporting Document BSA Calculator 2.14.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 339
HB 339 Supporting Document DGSD, ANC SD, FBNSB SD, MSBSD and JSD Letters of Support and Powerpoint COMBINED 2.14.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 339
HB 339 Supporting Document News Articles Combined 2.14.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 339
HB 339 Supporting Document Powerpoint Rep Les Gara 2.14.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 339
HB 339 Supporting Document Public Letters of Support COMBINED 2.14.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 339
HB 339 Supporting Documents Legislative Finance Charts FY 18 Dollars and Nominal Dollars 2.14.18.pdf HEDC 2/16/2018 8:00:00 AM
HB 339
HB 339 Powerpoint House Education Committee February 16 2018 v2.pdf HEDC 2/16/2018 8:00:00 AM
HB 339