Legislature(2023 - 2024)DAVIS 106
04/19/2023 08:00 AM House EDUCATION
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| Audio | Topic |
|---|---|
| Start | |
| HB148 | |
| HB139 | |
| HB144 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 144 | TELECONFERENCED | |
| += | HB 139 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 148 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE EDUCATION STANDING COMMITTEE
April 19, 2023
8:14 a.m.
MEMBERS PRESENT
Representative Justin Ruffridge, Co-Chair
Representative Mike Prax
Representative CJ McCormick
Representative Tom McKay
Representative Rebecca Himschoot
Representative Andi Story
MEMBERS ABSENT
Representative Jamie Allard, Co-Chair
COMMITTEE CALENDAR
HOUSE BILL NO. 148
"An Act relating to the Alaska performance scholarship program."
- MOVED CSHB 148(EDC) OUT OF COMMITTEE
HOUSE BILL NO. 139
"An Act relating to funding for correspondence study programs."
- HEARD & HELD
HOUSE BILL NO. 144
"An Act relating to education tax credits; and providing for an
effective date by repealing the effective date of secs. 1, 2,
and 21, ch. 61, SLA 2014."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 148
SHORT TITLE: AK PERFORMANCE SCHOLARSHIP; ELIGIBILITY
SPONSOR(s): EDUCATION
03/29/23 (H) READ THE FIRST TIME - REFERRALS
03/29/23 (H) EDC, FIN
04/03/23 (H) EDC AT 8:00 AM DAVIS 106
04/03/23 (H) Heard & Held
04/03/23 (H) MINUTE(EDC)
04/05/23 (H) EDC AT 8:00 AM DAVIS 106
04/05/23 (H) Heard & Held
04/05/23 (H) MINUTE(EDC)
04/07/23 (H) EDC AT 8:00 AM DAVIS 106
04/07/23 (H) Heard & Held
04/07/23 (H) MINUTE(EDC)
04/17/23 (H) EDC AT 8:00 AM DAVIS 106
04/17/23 (H) Heard & Held
04/17/23 (H) MINUTE(EDC)
04/19/23 (H) EDC AT 8:00 AM DAVIS 106
BILL: HB 139
SHORT TITLE: CORRESPONDENCE STUDY PROGRAM FUNDING
SPONSOR(s): RUFFRIDGE
03/27/23 (H) READ THE FIRST TIME - REFERRALS
03/27/23 (H) EDC, FIN
04/05/23 (H) EDC AT 8:00 AM DAVIS 106
04/05/23 (H) Scheduled but Not Heard
04/07/23 (H) EDC AT 8:00 AM DAVIS 106
04/07/23 (H) Scheduled but Not Heard
04/12/23 (H) EDC AT 8:00 AM DAVIS 106
04/12/23 (H) Heard & Held
04/12/23 (H) MINUTE(EDC)
04/17/23 (H) EDC AT 8:00 AM DAVIS 106
04/17/23 (H) Heard & Held
04/17/23 (H) MINUTE(EDC)
04/19/23 (H) EDC AT 8:00 AM DAVIS 106
BILL: HB 144
SHORT TITLE: REPEAL EDUCATION TAX CREDITS SUNSET
SPONSOR(s): RUFFRIDGE
03/29/23 (H) READ THE FIRST TIME - REFERRALS
03/29/23 (H) EDC
04/19/23 (H) EDC AT 8:00 AM DAVIS 106
WITNESS REGISTER
SANA EFIRD, Executive Director
Alaska Commission on Postsecondary Education
Department of Education and Early Development
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
148.
CHRIS REITAN, Superintendent
Craig City School District
Craig, Alaska
POSITION STATEMENT: Answered questions regarding proposed
Amendment 2 during the hearing on HB 139.
BUD SEXTON, Staff
Representative Justin Ruffridge
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 144 on behalf of
Representative Ruffridge, prime sponsor.
CHAD HUTCHISON, Director of State Relations
University of Alaska System
Fairbanks, Alaska
POSITION STATEMENT: Presented a PowerPoint titled University of
Alaska Education Tax Credits - Overview.
ACTION NARRATIVE
8:14:05 AM
CO-CHAIR JUSTIN RUFFRIDGE called the House Education Standing
Committee meeting to order at 8:14 a.m. Representatives Prax,
McCormick, McKay, Himschoot, Story, and Ruffridge were present
at the call to order.
HB 148-AK PERFORMANCE SCHOLARSHIP; ELIGIBILITY
8:14:48 AM
CO-CHAIR RUFFRIDGE announced that the first order of business
would be HOUSE BILL NO. 148, "An Act relating to the Alaska
performance scholarship program."
CO-CHAIR RUFFRIDGE noted that at the House Education Standing
Committee meeting on Monday, April 17, 2023, a motion had been
made by Co-Chair Allard to adopt Conceptual Amendment 1 to HB
148, [with objection by Co-Chair Ruffridge], and this motion had
been left pending.
8:15:37 AM
REPRESENTATIVE MCKAY moved to table [Conceptual Amendment 1].
There being no objection, Conceptual Amendment 1, pending with
objection, was tabled.
8:16:04 AM
CO-CHAIR RUFFRIDGE entertained other amendments.
8:16:14 AM
REPRESENTATIVE HIMSCHOOT moved to adopt Conceptual Amendment 5
to HB 148.
CO-CHAIR RUFFRIDGE explained that Conceptual Amendment 5 was
initially drafted by Representative Allard. He asked whether
there were any objections to the amendment.
8:16:38 AM
REPRESENTATIVE STORY objected to Conceptual Amendment 5.
8:16:46 AM
REPRESENTATIVE HIMSCHOOT Explained that Conceptual Amendment 5
opens the scholarship eligibility to students who either have a
high score on the SAT or ACT, or a high GPA, providing
flexibility to students who show their worthiness for the
scholarship.
8:18:08 AM
REPRESENTATIVE STORY spoke to her objection. She expressed
concern about the GPA and students not having to deal with the
test. Additionally, she questioned the deletion of the word
"academic" on page 2, line 30, because the academic requirements
are not being deleted.
8:19:24 AM
REPRESENTATIVE HIMSCHOOT replied that she could not speak to the
deletion of the word "academic," adding that a requirement is a
requirement, whether it was academic or otherwise. She said she
did not know why "academic" needed to be deleted, and shared her
belief that it could stay. She added that there are many
students with a low GPA that could pass a test, and those
students should also be able to receive the performance
scholarship.
8:20:06 AM
REPRESENTATIVE STORY pointed out that there are accountability
measures in place, so if students do not keep their grades up,
they will lose their scholarship. She noted that [the
accountability measures] encourage students to work hard.
8:20:38 AM
REPRESENTATIVE STORY moved to adopt Conceptual Amendment 1 to
Conceptual Amendment 5, to keep the word "academic".
8:21:18 AM
REPRESENTATIVE MCCORMICK objected.
REPRESENTATIVE STORY stated that there are academic
requirements, and emphasized the importance of keeping
"academic" in the legislation.
8:22:09 AM
SANA EFIRD, Executive Director, Alaska Commission on
Postsecondary Education (ACPE), Department of Education and
Early Development (DEED), joined the discussion on HB 148. She
referenced the 10-year lookback, reporting that the curriculum
and the academic success on the curriculum makes a difference
for the students as they attend their post-secondary programs.
Specifically with the university classes, students do not have
to take remedial classes at the rate of others; however, keeping
the curriculum and having an and/or is doable, she said.
8:24:07 AM
REPRESENTATIVE STORY drew attention to page 1 of the bill
regarding the minimum GPA.
CO-CHAIR RUFFRIDGE related that the focus needed to stay on the
conceptual amendment to Conceptual Amendment 5, specifically the
word "academic."
REPRESENTATIVE STORY thanked Co-Chair Ruffridge for reminding
the committee that the academic piece is important.
8:25:01 AM
REPRESENTATIVE HIMSCHOOT asked whether it was possible that the
word "academic" was no longer applicable, and whether Career
Technical Education (CTE) also required the word "academic."
8:25:25 AM
MS. EFRID replied that "academic" was still in the curriculum
requirement; she said she wasn sure whether the removal would
affect the curriculum.
8:26:42 AM
REPRESENTATIVE STORY commented that she had been reminded of how
rigorous CTE is for students.
8:27:18 AM
REPRESENTATIVE HIMSCHOOT stated that removing the word
"academic" was suggested by the legal department, but she liked
having it there. She confirmed her support for Conceptual
Amendment 1 to Conceptual Amendment 5.
8:27:53 AM
REPRESENTATIVE MCCORMICK removed his objection to Conceptual
Amendment 1 to Conceptual Amendment 5. There being no further
objection, Conceptual Amendment 1 to Conceptual Amendment 5 was
adopted.
8:28:37 AM
The committee took a brief at-ease at 8:28 a.m.
8:29:08 AM
CO-CHAIR RUFFRIDGE returned the discussion to Conceptual
Amendment 5, [as amended].
8:29:22 AM
REPRESENTATIVE STORY directed attention to line 11 of Conceptual
Amendment 5 and questioned what body should be setting minimum
[GPA] requirements. Additionally, she asked which entity the
language referred to.
CO-CHAIR RUFFRIDGE reminded Representative Story that this
language was already in statute on page 2, lines 11-13 of the
bill. He added that Conceptual Amendment 5 was setting forth a
repeal of the language.
REPRESENTATIVE STORY noted that the directions were to "delete
all material and insert."
CO-CHAIR RUFFRIDGE pointed out that "insert" was capitalized and
bolded, indicating that it would match the other sections as a
repeal.
8:31:02 AM
The committee took an at-ease from 8:31 a.m. to 8:34 a.m.
8:34:59 AM
REPRESENTATIVE STORY confirmed that her questions were answered.
8:35:06 AM
CO-CHAIR RUFFRIDGE asked whether there were other questions or
comments on Conceptual Amendment 5.
REPRESENTATIVE HIMSCHOOT asked whether the conceptual amendment
would open the scholarship to a broader range of students.
8:35:27 AM
MS. EFIRD responded that her interpretation was yes, it would
provide scholarship opportunities to students that have taken
the curriculum laid out in the current statute, but for some
reason, did not make a certain GPA.
8:36:12 AM
CO-CHAIR RUFFRIDGE asked whether Representative Story maintained
her objection to Conceptual Amendment 5, [as amended], to HB
148.
REPRESENTATIVE STORY removed her objection. There being no
further objection, Conceptual Amendment 5 [as amended], was
adopted.
8:36:30 AM
CO-CHAIR RUFFRIDGE moved to adopt Amendment 6 to HB 148, labeled
33-LS0624/B.7\Marx 4/18/23, which read:
Page 3, lines 14 - 15:
Delete "AS 14.43.825(g) and (h)"
Insert "AS 14.43.825(g) - (i)"
Page 4, lines 21 - 27:
Delete all material and insert:
"(g) Each time a student who is an award
recipient completes two semesters of full-time
enrollment at a qualified postsecondary institution in
this state, the postsecondary institution shall review
and notify the commission of the student's
postsecondary institution grade-point average. If the
student's grades qualify under (h) of this section,
the commission shall increase the award level for the
student as described in (h) of this section and notify
the student of the increase. In this subsection,
"full-time enrollment" means enrollment in a course of
study that is not less than 15 credits."
Page 4, line 28:
Delete "university or college"
Insert "postsecondary institution"
Page 4, line 29, following "above,":
Insert "or the equivalent established under (i)
of this section,"
Page 4, line 31, following "above,":
Insert "or the equivalent established under (i)
of this section,"
Page 5, following line 1:
Insert a new subsection to read:
"(i) For qualified postsecondary institutions
that do not award grades on a four-point scale, the
commission shall establish by regulation the
equivalent rating required to increase an award under
(h) of this section."
Reletter the following subsection accordingly.
Page 5, lines 5 - 7:
Delete all material and insert:
"(2) "postsecondary institution grade-point
average" means the average of all grades on a four-
point scale, or the equivalent as established by the
commission by regulation, obtained by a student at a
qualified postsecondary institution in this state."
8:36:40 AM
REPRESENTATIVE MCKAY objected for the purpose of discussion.
CO-CHAIR RUFFRIDGE explained that Amendment 6 would make several
changes to ensure that the bill would encompass the most
available students, make sure all post-secondary institutions in
the state are covered rather than just universities or colleges,
in addition to conforming changes.
8:37:22 AM
The committee took an at-ease from 8:37 a.m. to 8:42 a.m.
8:42:30 AM
CO-CHAIR RUFFRIDGE continued the discussion on Amendment 6.
8:42:55 AM
REPRESENTATIVE STORY referred to page 1, lines 13-14 of
Amendment 6, and expressed her concern about the 15 credit
requirement, because many students are non-traditional students
that work in addition to going to school. She asked for
clarification on the determination made by the Alaska Commission
on Postsecondary Education (ACPE) on the number of credits.
MS. EFIRD offered her understanding that there were both part
time and full time awards for APS, which would cover the concern
about nontraditional students who were unable to attend a full
time program of 15 credits.
REPRESENTATIVE STORY asked whether the student would get a
portion of the scholarship.
MS. EFIRD said she would check with her staff to clarify.
REPRESENTATIVE STORY asked whether including "not less than 15
credits" would create parameters for the commission's
flexibility.
MS. EFIRD offered her belief that this is the way the program is
currently set up for the full-time classes. She reiterated that
she would talk with her staff on the number of credits
otherwise.
REPRESENTATIVE STORY opined that 15 credits was a high amount,
and 4 classes, she said, could constitute "full time."
8:46:27 AM
REPRESENTATIVE HIMSCHOOT questioned whether the original APS
language specified 15 hours and asked whether 15 was standard.
MS. EFIRD offered her understanding that 15 credit hours was
standard; however, there was an allowance for 12 credits in the
first year under APS regulations. She offered to follow up with
the requested information.
8:47:29 AM
REPRESENTATIVE HIMSCHOOT opined that it was an overstep for the
legislature to decide what full time is and that the ACPE could
decide that. Quarters versus semesters, she said, could also
change what full time is. She stated she would be more
comfortable if full time enrollment were determined by the ACPE;
however, she would not want that to create a burden.
MS. EFIRD replied that ACPE would work through regulations, but
she was unsure if they would work with an institution to
determine what they would consider a full-time student. She
understood that it is something ACPE could take on, and offered
to talk with staff regarding the added administrative burden.
8:48:45 AM
CO-CHAIR RUFFRIDGE reminded the committee that the section
currently under discussion started on page 4, line 20, in
Section 6. He clarified that the amendment would change the
language on line 22, and explained that the language on full-
time enrollment is not indicative of the qualifications to
receive the scholarship. Instead, the intent was to talk
through what enrollment is necessary to receive the step-up
provision.
8:49:54 AM
The committee took an at-ease from 8:49 a.m. to 8:53 a.m.
8:53:07 AM
CO-CHAIR RUFFRIDGE reminded the committee that the current focus
is on the credit component in Amendment 6.
REPRESENTATIVE STORY sought clarification as to the amount of
credits in regulations.
MS. EFIRD confirmed that for the first year, it is 12 credits.
8:53:55 AM
REPRESENTATIVE MCKAY withdrew his objection to the motion to
adopt Amendment 6 to HB 158. There being no further objection,
Amendment 6 was adopted.
REPRESENTATIVE STORY thanked Ms. Efird and ACPE for supporting
this modernization, and thanked the committee for the bill.
MS. EFIRD expressed her excitement towards the bill, and thanked
the committee members for their engagement and enthusiasm.
8:56:20 AM
REPRESENTATIVE MCCORMICK moved to report HB 148, as amended, out
of committee with individual recommendations and the
accompanying fiscal notes, and to authorize Legislative Legal
Services to make technical and conforming changes, as needed.
There being no objection, CSHB 148(EDC) was reported out of the
House Education Standing Committee.
8:56:54 AM
The committee took an at-ease from 8:56 a.m. to 8:59 a.m.
HB 139-CORRESPONDENCE STUDY PROGRAM FUNDING
8:59:07 AM
CO-CHAIR RUFFRIDGE announced that the next order of business
would be HOUSE BILL NO. 139, "An Act relating to funding for
correspondence study programs."
CO-CHAIR RUFFRIDGE entertained amendments.
8:59:38 AM
REPRESENTATIVE MCKAY indicated that Amendment 1, [included in
the committee packet, would not be offered].
8:59:48 AM
The committee took an at-ease from 8:59 a.m. to 9:01 a.m.
9:01:40 AM
REPRESENTATIVE HIMSCHOOT moved to adopt Amendment 2 to HB 139,
labeled 33-LS0582\B.1/Marx 4/12/23, which read as follows:
Page 1, lines 8 - 9:
Delete "multiplying the ADM of the correspondence
program by the special needs factor in
AS 14.17.420(a)(1) [90 PERCENT]"
Insert "(1) multiplying the ADM of the
correspondence program by 90 percent; and
(2) except as provided in (b) of this
section, multiplying the number obtained under (1) of
this subsection by the special needs factor in
AS 14.17.420(a)(1)"
Page 1, following line 9:
Insert a new bill section to read:
"* Sec. 2. AS 14.17.430 is amended by adding new
subsections to read:
(b) A correspondence program described in (a) of
this section must maintain a correspondence program
student assessment participation rate of at least 96
percent or the average participation rate of all
district student assessment participation rates in the
state, whichever is less. If the correspondence
program fails to meet the student assessment
participation requirement for more than two
consecutive fiscal years, funding for the
correspondence program in a subsequent fiscal year may
not include the special needs factor adjustment
described in (a)(2) of this section. A correspondence
program that meets the student assessment
participation requirement after losing funding under
this subsection is eligible to receive the special
needs factor adjustment described in (a)(2) of this
section in the following fiscal year.
(c) In this section,
(1) "correspondence program student
assessment participation rate" means the percentage
obtained by dividing the number of students enrolled in
a correspondence program who took a statewide student
assessment administered by the correspondence program
by the number of students enrolled in a grade in which
the correspondence program administers the assessment
on the first day that the correspondence program
begins administering the assessment;
(2) "district student assessment
participation rate" means the percentage obtained by
dividing the number of students enrolled in a district
who took a statewide student assessment administered
by the district by the number of students enrolled in
a grade in which the district administers the
assessment on the first day that the district begins
administering the assessment;
(3) "statewide student assessment" means a
standards-based test or assessment required by the
department under AS 14.03.123(f)."
CO-CHAIR RUFFRIDGE objected.
REPRESENTATIVE HIMSCHOOT said Amendment 2 did two things.
Firstly, it would implement the superintendents request to
multiply the correspondence program's average daily membership
(ADM) by 90 percent and provide a multiplier of 1.2. She added
that she took the legislature's role as the "middle man for the
public dollar" very seriously, opining that the money should be
spent wisely. The second part of the amendment would set
accountability standards for correspondence programs to show
performance measures for the investment of public dollars.
9:03:47 AM
REPRESENTATIVE STORY requested to hear from Superintendent
Reitan on the letter submitted by the superintendents. She
shared her belief that the 96 percentile would be too high of a
dump as a growth measure and asked Representative Himschoot to
speak to that.
9:04:40 AM
REPRESENTATIVE HIMSCHOOT highlighted lines 14-15 of Amendment 2.
She explained that if the building-based programs are reaching
80 percent, the correspondence programs would also have to reach
80 percent. She added that the programs would have several
years to reach and maintain that standard.
9:05:28 AM
CO-CHAIR RUFFRIDGE reiterated that the question posed by
Representative Story is in reference to the letter signed by Mr.
Reitan, who is available for discussion.
9:05:55 AM
CHRIS REITAN, Superintendent, Craig City School District, joined
the discussion on Amendment 2. He offered his understanding
that all the districts who operate homeschool programs would be
pleased in regard to what the amendment is doing with 90 percent
of the base student allocation (BSA) plus the special needs
factor. He stressed the importance of having a "level playing
field" with brick-and-mortar schools. The second piece of
Amendment 2, he said, would make it difficult for all school
districts, especially correspondence schools, to meet that
standard. He related hearing from parents who said they know
their children the best in reference to developing an individual
plan, consultations with the school district, or contacting
teacher about which plan most appropriately meets the student's
needs. He opined that the second piece of Amendment 2 puts
district in an awkward place in regard to providing all parents
a right to direct education. He said no school district is
trying to shy away from accountability; instead, districts are
trying their best to fit into state statutes that have already
been put in place.
9:10:02 AM
REPRESENTATIVE HIMSCHOOT asked Mr. Reitan what the federal
assessment requirement was.
MR. REITAN replied it is 95 percent.
REPRESENTATIVE HIMSCHOOT referred to lines 12-15 in Amendment 2,
and stated that she was hesitant to invest the public's money in
a program that does not meet the same standards as other
programs.
MR. REITAN replied that he could only speak to the
correspondence programs he works, explaining that there are
other assessment items in place for families to utilize with
their students in consultation with their contact teacher.
Another item his organization tracks, he said, is the number of
students accessing college university classes, which was not
addressed in the bill.
9:13:45 AM
REPRESENTATIVE PRAX observed there were two pieces to the
amendment: the money, and the assessment. He stated that he was
most concerned about the assessment piece being logistically
difficult for the statewide correspondence programs to arrange
for the tests, in addition to getting everyone together in the
same place to take the tests when the results "don't mean
anything." He said he questioned the value of the tests, and
asked why districts would be asked to spend more money on tests
that "we don't care about."
9:16:29 AM
REPRESENTATIVE HIMSCHOOT asked Mr. Reitan whether brick and
mortar programs also produce similar measures of success with
their students not related to testing.
MR. REITAN responded absolutely. Statewide, he said, district
assessments are a "snapshot," of a particular time in a
student's life. He defined success as when a student graduates
from their system with every option available to them regardless
of what they want to do moving forward.
9:18:07 AM
REPRESENTATIVE STORY considered a scenario in which the
correspondence school was not meeting the intent of the
individual education plan (IEP) and asked whether liability
would fall to the district or the correspondence school.
MR. REITAN clarified that the individual education plan for
students with disabilities was based on where the student is
most enrolled. He provided an example of students partially
enrolled in both brick-and-mortar and correspondence programs,
and based on the percentage of where they are most enrolled,
that school would be responsible for managing the IEP as well as
working with the parents.
REPRESENTATIVE STORY asked whether the responsibility for
correspondence programs was the reason superintendents wanted to
keep it at .9 instead of 1.
MR. REITAN replied that increasing special education enrollment
in correspondence programs has been going on a number of years.
Without addressing the entire BSA formula, he reasoned that [.9]
seemed equitable in regard to receiving the 1.0 special needs
factor.
9:21:51 AM
REPRESENTATIVE PRAX commented on the "secret sauce" that seems
to make the correspondence programs work, and the ability to
structure the curriculum to the individual. He stated that
there is much less need for standardized testing and centralized
accountability, and reiterated that he wished to vote down
Amendment 2 and focus on Amendment 3.
9:24:35 AM
REPRESENTATIVE HIMSCHOOT asked Mr. Reitan whether it was
possible to meet federal mandates surrounding special education.
Additionally, she asked what the ratio was for special education
teachers to IEP students.
9:25:38 AM
MR. REITAN explained that when he was in Galena, Alaska, staff
looked at a ratio of 1 to 60 max for IDEA students with special
needs. Special education teachers didn't have the daily
responsibility of also doing the instruction for the students
since they work through the parents, he said. He stated that if
HB 139 passed, there would be difficulties finding high quality
special education teachers.
9:27:38 AM
REPRESENTATIVE STORY opined that 1 to 15 was an excellent ratio.
She highlighted the difficulty of finding special education
teachers, noting that many in the Juneau School District were
hired by contract, which was more expensive.
9:28:15 AM
CO-CHAIR RUFFRIDGE agreed with Representative Prax about taking
up Amendment 3 to discuss the funding component. Regarding
Amendment 2, he opined that the proposal would add a burden that
contradicts current statute regarding the right of a parent to
choose to participate in a test or not. He affirmed he would
not support Amendment 2 and maintained his objection.
9:29:12 AM
A roll call vote was taken. Representatives McCormick and
Himschoot voted in favor of the motion to adopt Amendment 2 to
HB 139. Representatives McKay, Story, Prax, and Ruffridge voted
against it. Therefore, Amendment 2 failed by a vote of 2-4.
9:29:50 AM
CO-CHAIR RUFFRIDGE announced that HB 139 was held over.
9:30:14 AM
The committee took an at-ease from 9:30 a.m. to 9:31 a.m.
HB 144-REPEAL EDUCATION TAX CREDITS SUNSET
9:31:56 AM
CO-CHAIR RUFFRIDGE announced that the final order of business
would be HOUSE BILL NO. 144, "An Act relating to education tax
credits; and providing for an effective date by repealing the
effective date of secs. 1, 2, and 21, ch. 61, SLA 2014."
9:32:34 AM
BUD SEXTON, Staff, Representative Justin Ruffridge, Alaska State
Legislature, presented HB 144, via PowerPoint presentation [hard
copy included in the committee packet], on behalf of
Representative Ruffridge, prime sponsor. He discussed the
bill's background, as shown on slides 2 and 3, titled
"Background," which read as follows [original punctuation
provided]:
The Education Tax Credit program was first established
in 1987 by the Legislature.
Goal is to encourage private businesses to make
charitable contributions to schools in Alaska.
The education tax credit is a credit for qualifying
contributions to Alaska universities and accredited
nonprofit Alaska two-or four-year colleges for
facilities, direct instruction, research and
educational support purposes;
Donations to a school district or a state-operated
technical and training school for vocational education
courses, programs and facilities;
Donations for Alaska Native cultural or heritage
programs for public school staff and students, and a
facility in the state that qualifies as a coastal
ecosystem learning center under the Coastal American
Partnership
9:33:49 AM
MR. SEXTON moved to slide 4, titled "Recent Education Tax Credit
Legislation," which read as follows [original punctuation
provided]:
HB 278 in 2014 expanded the list of eligible
recipients for donations.
HB 223 in 2018 created the allowance for cash or
equipment contributions.
HB 223 established the current sunset expiration date
of December 31, 2024
9:34:42 AM
MR. SEXTON proceeded to slide 5, titled "Credits offset taxes,"
which read as follows [original punctuation provided]:
State net income tax (Corporate)
Mining License tax
Fisheries Business Tax
Fishery Resource Landing Tax
Oil and Gas Production tax
Oil and Gas Property tax and Insurance tax
9:35:02 AM
MR. SEXTON continued to slide 6, titled "2011-2022 Contributions
& Credits," which featured a spreadsheet. He pointed out that
the contents of the spreadsheet were available online as well.
He said that the "Credits Claimed" column shows the amount that
has impacted the state budget, and the "Total of Contributions"
column represents the following four columns: "U of A," "APU,"
"Secondary/Vocational," and "Other."
9:36:22 AM
MR. SEXTON moved to slide 7, titled "HB 223 - lowered tax
credits in phases," which read as follows [original punctuation
provided]:
Up to $100K $100K-$300K >$300K CAP
2018 50% 100% 50% $5m
2019 50% 75% 50% $1m
2021 50% 50% 50% $1m
9:37:42 AM
REPRESENTATIVE PRAX observed that there was a strong correlation
between the reduction in the amount of contributions and the
percentage that could be claimed.
MR. SEXTON explained that to answer that question, he could look
at the figure in the summary total. He added that there were
years in which the amount of donations was significant compared
to other years; however, he said it was hard to suggest one way
or the other.
9:39:11 AM
REPRESENTATIVE HIMSCHOOT suggested including a column that
showed how many total donors there were by year.
MR. SEXTON responded that some information is not made public.
9:39:46 AM
MR. SEXTON continued on slide 8, titled "HB 144," which read as
follows [original punctuation provided]:
Proposed legislation to remove the sunset date for the
Education Tax Credit.
HB 144 strikes a reasonable level of deductions which
impact State budget
Proposes to leave tax deduction levels at the 2021
levels
Up to $100K $100K-$300K >$300K CAP
2021 50% 50% 50% $1m
MR. SEXTON stressed that removing the sunset provision also
allowed various companies the ability to plan their donations
further ahead.
9:41:13 AM
REPRESENTATIVE STORY asked whether Mr. Sexton surveyed the
districts to find out if different entities were donating to
them at different levels.
MR. SEXTON replied he had, but only to a small number of
districts. He noted the challenge of pinpointing any one causal
or correlating factor.
REPRESENTATIVE STORY revisited a point on the third slide and
asked for clarification on the entities that qualify for tax
credits.
MR. SEXTON directed attention to the second bullet point on the
same slide which read "donations to a school district or a
state-operated technical and training school for vocational
education courses, programs and facilities," and said whether a
specific entity does qualify is an answer he does not have at
this time.
REPRESENTATIVE STORY suggested adding "tribal" to the language.
9:44:37 AM
CO-CHAIR RUFFRIDGE explained that as the bill sponsor, the
purpose behind the bill was exclusively to eliminate the sunset
date. He added that some of the more detailed aspects could be
examined further if it was the will of the committee.
9:45:27 AM
CHAD HUTCHISON, Director of State Relations, University of
Alaska System, presented a PowerPoint, titled "University of
Alaska Education Tax Credits - Overview" [hard copy included in
the committee packet]. He moved to slide 2, titled "Education
Tax Credits (ETC)," and explained that the photo on the slide
depicts a $1 million check with education and industry partners
gathered around. He explained that the tax credit program is a
popular program that averages 20 to 30 participants.
9:47:50 AM
MR. HUTCHISON proceeded to slide 3, titled "Overview," which
builds off the earlier presentation on Alaska education tax
credits, focusing on a summary of calendar year 2022.
9:48:25 AM
MR. HUTCHISON concluded the presentation on slide 4, titled "A
Few Tax Paying Entities that Historically Contribute to the
University of Alaska." He added that cash and equipment is used
in many ways towards many programs. He shared the examples of
donating equipment to a mining program so students could learn
in a "very real way."
9:49:45 AM
CO-CHAIR RUFFRIDGE invited questions or comments from committee
members.
9:50:18 AM
REPRESENTATIVE PRAX reflected on an earlier comment regarding
the objective of HB 144 to extend the expiration date of the tax
credit. He stressed the importance of that objective.
9:51:45 AM
REPRESENTATIVE STORY supported the idea of extending the
education tax credit; however, she noted that there were other
entities, particularly tribal entities, that were offering good
educational programs. The language in the bill, she said,
"would not be that hard."
9:52:30 AM
[CO-CHAIR RUFFRIDGE announced that HB 144 was held over.]
9:53:14 AM
The committee took a brief at-ease at 9:53 a.m.
9:53:33 AM
ADJOURNMENT
There being no further business before the committee, the House
Education Standing Committee meeting was adjourned at 9:53 a.m.