Legislature(2023 - 2024)ADAMS 519

02/14/2024 08:30 AM House FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Time Change --
+= HB 81 VEHICLES/BOATS: TRANSFER ON DEATH TITLE TELECONFERENCED
Moved HB 81 Out of Committee
+= HB 148 AK PERFORMANCE SCHOLARSHIP; ELIGIBILITY TELECONFERENCED
Moved CSHB 148(FIN) Out of Committee
+= HB 193 INTERNET FOR SCHOOLS TELECONFERENCED
Moved HB 193 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 155 ESTABLISH AK MILITARY AFFAIRS COMMISSION TELECONFERENCED
Moved CSHB 155(FIN) Out of Committee
-- Public Testimony --
                   HOUSE FINANCE COMMITTEE                                                                                      
                      February 14, 2024                                                                                         
                          8:35 a.m.                                                                                             
                                                                                                                                
                                                                                                                                
8:35:11 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 8:35 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bryce Edgmon, Co-Chair                                                                                           
Representative Neal Foster, Co-Chair                                                                                            
Representative DeLena Johnson, Co-Chair                                                                                         
Representative Julie Coulombe                                                                                                   
Representative Mike Cronk                                                                                                       
Representative Alyse Galvin                                                                                                     
Representative Sara Hannan                                                                                                      
Representative Andy Josephson                                                                                                   
Representative Dan Ortiz                                                                                                        
Representative Will Stapp                                                                                                       
Representative Frank Tomaszewski                                                                                                
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Ryan   McKee,   Staff,   Representative   George   Rauscher;                                                                    
Representative   George  Rauscher,   Sponsor;  Sana   Efird,                                                                    
Executive  Director,  Alaska   Commission  on  Postsecondary                                                                    
Education,  Department of  Education and  Early Development;                                                                    
Deb Riddle,  Operations Manager, Division of  Innovation and                                                                    
Education  Excellence,  Department  of Education  and  Early                                                                    
Development; Laural  Shoop, Legislative  Liaison, Department                                                                    
of   Education  and   Early  Development;   Karen  Morrison,                                                                    
Director, Division of Finance  and Facilities, Department of                                                                    
Education  and  Early   Development;  Representative  Louise                                                                    
Stutes;  Representative   Justin  Ruffridge;  Representative                                                                    
Andi Story; Representative Rebecca Himschoot.                                                                                   
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Jeffrey  Schmitz,  Director,  Division  of  Motor  Vehicles,                                                                    
Department   of   Administration;   Faye   Tanner,   Program                                                                    
Coordinator, Department of Education and Early Development.                                                                     
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 81     VEHICLES/BOATS: TRANSFER ON DEATH TITLE                                                                               
                                                                                                                                
          HB 81 was  REPORTED out of committee  with ten "do                                                                    
          pass" recommendations and  one "no recommendation"                                                                    
          recommendation  and  with  one new  fiscal  impact                                                                    
          note from the Department of Administration.                                                                           
                                                                                                                                
HB 148    AK PERFORMANCE SCHOLARSHIP; ELIGIBILITY                                                                               
                                                                                                                                
          CSHB 148(FIN)  was REPORTED out of  committee with                                                                    
          ten   "do  pass"   recommendations  and   one  "no                                                                    
          recommendation" recommendation  and with  four new                                                                    
          fiscal  impact   notes  from  the   Department  of                                                                    
          Education and Early Development.                                                                                      
                                                                                                                                
HB 155    ESTABLISH AK MILITARY AFFAIRS COMMISSION                                                                              
                                                                                                                                
          HB 193  was REPORTED  out of committee  with eight                                                                    
          "do    pass"    recommendations,    two    "amend"                                                                    
          recommendations,   and  one   "no  recommendation"                                                                    
          recommendation  and  with  one new  fiscal  impact                                                                    
          note from  the Department  of Education  and Early                                                                    
          Development.                                                                                                          
                                                                                                                                
HB 193    INTERNET FOR SCHOOLS                                                                                                  
                                                                                                                                
          CSHB 155(FIN)  was REPORTED out of  committee with                                                                    
          ten   "do  pass"   recommendations  and   one  "no                                                                    
          recommendation"  recommendation and  with one  new                                                                    
          fiscal  impact   note  from  the  Office   of  the                                                                    
          Governor.                                                                                                             
                                                                                                                                
Co-Chair Foster reviewed the meeting agenda.                                                                                    
                                                                                                                                
HOUSE BILL NO. 81                                                                                                             
                                                                                                                                
     "An Act relating to the transfer of a title on the                                                                         
     death of the owner; and providing for an effective                                                                         
     date."                                                                                                                     
                                                                                                                                
8:37:29 AM                                                                                                                    
                                                                                                                                
Co-Chair Foster  noted that no amendments  had been received                                                                    
for  the bill.  The committee  would review  the one  fiscal                                                                    
note from the Department of Administration.                                                                                     
                                                                                                                                
JEFFREY  SCHMITZ,  DIRECTOR,   DIVISION  OF  MOTOR  VEHICLES                                                                    
(DMV),  DEPARTMENT OF  ADMINISTRATION (via  teleconference),                                                                    
stated that he  had just been informed that  the fiscal note                                                                    
submitted by the  DMV had been changed by  the committee. He                                                                    
believed the  note was now  indeterminate or zero.  He could                                                                    
not speak to  the reasons why the committee  had changed the                                                                    
note.                                                                                                                           
                                                                                                                                
Co-Chair Foster replied  that he did not  believe the fiscal                                                                    
note had been changed by  the committee. He looked at fiscal                                                                    
note  with  the  OMB  component number  2348  showing  total                                                                    
operating expenditures  of $75,000 designated  general funds                                                                    
(DGF). He thought it was likely the original fiscal note.                                                                       
                                                                                                                                
8:39:16 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
8:39:50 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Foster noted that Mr.  Schmitz may be looking at an                                                                    
earlier version  of the fiscal  note generated in  the House                                                                    
Transportation Committee, which was  no longer relevant.  He                                                                    
clarified that  the committee  was addressing  OMB component                                                                    
number 2348.                                                                                                                    
                                                                                                                                
Mr. Schmitz  apologized for the confusion.  He detailed that                                                                    
the DMV fiscal note  included $75,000 for programming needed                                                                    
to change  DMV's information system  in accordance  with the                                                                    
bill. He elaborated  that the cost had been  provided by the                                                                    
Office   of   Information   Technology  (OIT)   [under   the                                                                    
Department of Administration]. He  explained that there were                                                                    
no other DMV costs.                                                                                                             
                                                                                                                                
Co-Chair Foster asked the bill  sponsor to come to the table                                                                    
to ensure the fiscal note was accurate.                                                                                         
                                                                                                                                
RYAN   MCKEE,   STAFF,   REPRESENTATIVE   GEORGE   RAUSCHER,                                                                    
confirmed  the fiscal  note was  correct. He  explained that                                                                    
the House  Transportation Committee  had changed  the fiscal                                                                    
note  to indeterminate,  but  it had  reverted  back to  the                                                                    
prior fiscal note  with cost of $75,000 when  it reached the                                                                    
House Finance Committee.                                                                                                        
                                                                                                                                
Co-Chair  Johnson  thought  that the  title  transfer  would                                                                    
already take  place when someone  passed away.  She wondered                                                                    
why the funds were needed if the step was not additional.                                                                       
                                                                                                                                
Mr.  Schmitz  responded  that  it  was  not  something  that                                                                    
happened   automatically  when   an   individual  died.   He                                                                    
explained  that  the DMV  or  individuals  involved did  not                                                                    
automatically  know   who  [a   vehicle  title]   should  be                                                                    
transferred to. He expounded that  sometimes a vehicle could                                                                    
be subject to probate. He  explained there were a variety of                                                                    
other  features  that  could   direct  a  path  of  ultimate                                                                    
ownership  in different  directions. He  was certain  it was                                                                    
the  reason for  the bill,  in order  to clarify  what would                                                                    
happen when  an owner  died. The programming  involved would                                                                    
be to change all of the  fields needed to display the intent                                                                    
of the owners upon death clearly on the title.                                                                                  
                                                                                                                                
8:44:33 AM                                                                                                                    
                                                                                                                                
Co-Chair   Johnson  observed   that   it   would  take   600                                                                    
programming hours  [based on the  information in  the fiscal                                                                    
note]. She estimated that was about 15 weeks.                                                                                   
                                                                                                                                
Mr. Schmitz  responded affirmatively.  He stated it  was the                                                                    
information  provided   by  OIT.  He  explained   it  was  a                                                                    
complicated  item,  particularly   pertaining  to  ownership                                                                    
fields.  He  elaborated  that  it   had  to  be  tested  and                                                                    
regression tested. He stated that  it could take an OIT team                                                                    
awhile to work  on it and he did not  know the exact process                                                                    
or the number of programmers involved.                                                                                          
                                                                                                                                
Co-Chair  Johnson  thought   it  seemed  to  be   a  lot  of                                                                    
programming to do a title transfer.                                                                                             
                                                                                                                                
Co-Chair Foster noted  Leslie Isaacs, Administrative Service                                                                    
Director, Department of Administration,  was in the room for                                                                    
questions as well.                                                                                                              
                                                                                                                                
REPRESENTATIVE GEORGE RAUSCHER, SPONSOR,  stated it was hard                                                                    
for  him  to understand  why  it  would take  the  specified                                                                    
length of time  to make the change. He had  seen other bills                                                                    
with similar changes that had a zero fiscal note.                                                                               
                                                                                                                                
8:46:55 AM                                                                                                                    
                                                                                                                                
Co-Chair  Edgmon asked  if the  committee was  disputing the                                                                    
fiscal note.                                                                                                                    
                                                                                                                                
Co-Chair Foster clarified they were asking questions.                                                                           
                                                                                                                                
Co-Chair Edgmon asked if they  were information gathering on                                                                    
the fiscal  note. He  was uncertain  what the  committee was                                                                    
doing.                                                                                                                          
                                                                                                                                
Co-Chair  Foster remarked  that it  sounded like  there were                                                                    
some questions  on the note.  He stated that  the department                                                                    
felt it needed  the money for the work. He  reasoned that if                                                                    
the  funding was  not provided  the department  may have  to                                                                    
request  a  supplemental  appropriation  later  on.  He  was                                                                    
comfortable going forward with the fiscal note.                                                                                 
                                                                                                                                
Co-Chair  Edgmon wanted  to see  the bill  move and  thought                                                                    
they should  move it  forward. He  surmised that  the fiscal                                                                    
note was  likely not  what the bill  sponsor wanted  to see,                                                                    
but in the scheme of things  the cost was fairly nominal. He                                                                    
believed they  should go for  the greater good and  move the                                                                    
bill.                                                                                                                           
                                                                                                                                
Co-Chair Johnson also  wanted to see the bill  move. She did                                                                    
not want to get bogged down  on the $75,000 fiscal note. She                                                                    
thought she would  need to spend some time  looking into how                                                                    
the numbers  were determined on  fiscal notes coming  to the                                                                    
committee.                                                                                                                      
                                                                                                                                
Representative Hannan stated that  she did not know anything                                                                    
about  computer   programming.  She  deferred  to   the  OIT                                                                    
expertise. She was  very supportive of the  bill. She shared                                                                    
that  she  had  just  gone  through  a  complicated  probate                                                                    
process  with her  sister. She  understood that  things that                                                                    
should be  simple and straight  forward were  sometimes not.                                                                    
She remarked that  they were talking about  vehicle and boat                                                                    
titles, which could add a  layer of complexity. She reminded                                                                    
the committee  that DMV  was one  of the  few places  in the                                                                    
state  budget  that generated  millions  of  dollars to  the                                                                    
general   fund  that   lapsed  annually.   She  stated   her                                                                    
understanding that  the $75,000 in  the fiscal note  was the                                                                    
maximum cost  and the  cost may not  reach that  amount. She                                                                    
supported moving the bill.                                                                                                      
                                                                                                                                
Co-Chair  Foster  added  that  the  funds  were  a  one-time                                                                    
amount.                                                                                                                         
                                                                                                                                
8:50:43 AM                                                                                                                    
                                                                                                                                
Co-Chair  Johnson MOVED  to REPORT  HB 81  out of  committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note. There being NO OBJECTION, it was so ordered.                                                                              
                                                                                                                                
HB  81 was  REPORTED out  of  committee with  ten "do  pass"                                                                    
recommendations and  one "no  recommendation" recommendation                                                                    
and with one  new fiscal impact note from  the Department of                                                                    
Administration.                                                                                                                 
                                                                                                                                
8:51:29 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
8:52:37 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 148                                                                                                            
                                                                                                                                
     "An Act relating to the Alaska performance scholarship                                                                     
     program."                                                                                                                  
                                                                                                                                
8:52:52 AM                                                                                                                    
                                                                                                                                
Co-Chair  Foster  noted there  were  no  amendments for  the                                                                    
bill. He  stated that  the committee  would review  the four                                                                    
fiscal  notes.   He  asked  the   director  of   the  Alaska                                                                    
Commission  on  Postsecondary   Education  (ACPE)  with  the                                                                    
Department  of Education  and  Early  Development (DEED)  to                                                                    
review the first three notes.                                                                                                   
                                                                                                                                
SANA  EFIRD,   EXECUTIVE  DIRECTOR,  ALASKA   COMMISSION  ON                                                                    
POSTSECONDARY EDUCATION,  DEPARTMENT OF EDUCATION  AND EARLY                                                                    
DEVELOPMENT,   began   with   OMB  component   number   2990                                                                    
pertaining  to  student  financial aid  programs.  The  note                                                                    
pertained  to  the   Alaska  Performance  Scholarship  (APS)                                                                    
awards passed through  as grants on the  grants and benefits                                                                    
line  and funded  through  the  Higher Education  Investment                                                                    
Fund.  The note  included $2,264,000  for FY  25, $2,404,200                                                                    
for  FY 26,  $2,545,700 for  FY  27, $2,688,700  for FY  28,                                                                    
$2,833,100 for  FY 29,  and $2,978,900 for  FY 30.  The bill                                                                    
amended the qualification criteria  for the APS applicant by                                                                    
adding  an option  for and  expanding  career and  technical                                                                    
education to the academic curriculum.  The bill inserted the                                                                    
definition for career cluster, removed  the minimum score on                                                                    
a college  entrance or standardized  examination requirement                                                                    
for eligibility  and added  language to allow  for a  GPA or                                                                    
minimum college entrance examination  to qualify, instead of                                                                    
requiring  both. The  bill added  a  requirement for  school                                                                    
districts to notify  students in their junior  year of their                                                                    
progress  towards earning  APS eligibility  and it  required                                                                    
                                  thth                                                                                          
districts to inform students  in 9  and 10   grade about the                                                                    
performance  scholarship.  The   legislation  increased  the                                                                    
annual award  amounts and provided  an additional  two years                                                                    
for  students  to  use the  scholarship  after  high  school                                                                    
graduation, expanding the time from  six to eight years. The                                                                    
bill  allowed eligible  award recipients  to qualify  for an                                                                    
increased  award   level  while  enrolled  at   a  qualified                                                                    
postsecondary institution, which was a step-up provision.                                                                       
                                                                                                                                
Ms.  Efird continued  to review  OMB component  number 2990.                                                                    
She highlighted that APS award  amounts were being increased                                                                    
from  $4,755 to  $7,000 annually  for level  one, $3,566  to                                                                    
$5,250  annually  for  level   two,  and  $2,378  to  $3,500                                                                    
annually for level three. A  table on the fiscal note showed                                                                    
the requirements  for the GPA  or the minimum scores  on the                                                                    
college  entrance  exams.  In  order  to  come  up  with  an                                                                    
estimate  for  the note,  ACPE  had  considered all  of  the                                                                    
potential changes in  the eligibility requirements resulting                                                                    
from the legislation  and a possible increase  in the number                                                                    
of   scholarship   eligible  students.   Additionally,   the                                                                    
increase  in  award  amounts   could  increase  the  current                                                                    
appropriation. Therefore,  the calculation estimate  for the                                                                    
APS fiscal  note award amount  assumptions began with  FY 23                                                                    
(the  most  recent completed  class)  as  a base.  The  note                                                                    
applied  the increase  scholarship amounts  included in  the                                                                    
bill  to  the  FY  23  numbers and  projected  a  2  percent                                                                    
increase  in  student  usage  for  FY  25  due  to  expanded                                                                    
eligibility  criteria. The  subsequent years  projected a  1                                                                    
percent increase in the number of students per year.                                                                            
                                                                                                                                
8:59:05 AM                                                                                                                    
                                                                                                                                
Representative  Josephson stated  that  the legislature  had                                                                    
recapitalized  the  Higher  Education Investment  Fund  with                                                                    
close  to $400  million and  had passed  a law  making it  a                                                                    
separate  fund to  prevent the  funds from  being swept.  He                                                                    
remarked that  many legislators had shown  a real commitment                                                                    
to the fund. He asked if the draw would be sustainable.                                                                         
                                                                                                                                
Ms. Efird  responded that the  fiscal note was  an estimate.                                                                    
She  elaborated  that ACPE  wanted  to  put forward  a  good                                                                    
faith, transparent  number that could result  from the bill;                                                                    
however, currently, the appropriation  for the APS award was                                                                    
$11,750,000. She explained  that in the past  year, APFC had                                                                    
awarded less than $8 million  of the funds. She relayed that                                                                    
the investment of the fund  was managed by the Department of                                                                    
Revenue (DOR)  and she did not  want to speak on  its behalf                                                                    
in terms of sustainability.  She explained that DOR provided                                                                    
a  7  percent   calculation  of  the  balance   to  ACPE  to                                                                    
distribute  two-thirds to  the  APS and  one  third for  the                                                                    
Alaska education  grants. In  FY 24,  the 7  percent equaled                                                                    
$26.6 million with $17.7 million  for the APS; however, only                                                                    
$11.75  million  was  appropriated  and  slightly  under  $8                                                                    
million was  actually used. The  Alaska education  grant had                                                                    
an available  $8.8 million  to use in  FY 24;  however, only                                                                    
$5.8 million was appropriated. She  clarified that up to the                                                                    
current  point,  ACPE  had  not used  the  7  percent  total                                                                    
calculation   available  under   statute  from   the  Higher                                                                    
Education Investment Fund; however,  any questions about the                                                                    
investments and gains and losses should be directed to DOR.                                                                     
                                                                                                                                
Ms. Efird  speculated it  would be five  or so  years before                                                                    
there  may  be  a  concern [about  the  fund  balance].  She                                                                    
underscored  that  she was  not  an  investment expert.  She                                                                    
believed committee  members had  the most recent  APS report                                                                    
showing  how the  use of  the  APS had  been declining.  The                                                                    
current usage was  less than half of the  peak usage number.                                                                    
She thought it  would take four to five years  to see all of                                                                    
the  new  changes  opening doors  for  other  students.  She                                                                    
stated  that there  may be  a  question or  funds needed  to                                                                    
recapitalize the fund  in the future. She  emphasized it was                                                                    
a  tool  that  would  make  a  difference  for  the  state's                                                                    
workforce.                                                                                                                      
                                                                                                                                
Co-Chair  Foster   recognized  that   Representative  Louise                                                                    
Stutes  was in  the audience.  He  noted that  the bill  was                                                                    
sponsored   by  the   House  Education   Committee  and   he                                                                    
recognized   members    from   that    committee   including                                                                    
Representative     Justin    Ruffridge     (co-chair)    and                                                                    
Representative Andi Story.                                                                                                      
                                                                                                                                
9:04:29 AM                                                                                                                    
                                                                                                                                
Representative Galvin  remarked on the bill's  language that                                                                    
students would  be notified of  the APS in their  junior and                                                                    
possibly  sophomore years.  She  asked  if the  notification                                                                    
went home for parents to see as well.                                                                                           
                                                                                                                                
Ms. Efird  responded that she  was not certain  but believed                                                                    
it was  students. She would  have to double check  to verify                                                                    
the information.                                                                                                                
                                                                                                                                
Representative  Galvin replied  that she  was very  happy to                                                                    
support the legislation and the  answer was not pertinent to                                                                    
her support.                                                                                                                    
                                                                                                                                
9:05:23 AM                                                                                                                    
                                                                                                                                
Ms.  Efird moved  to the  second fiscal  note OMB  Component                                                                    
number  3340 for  the Alaska  Education  Grant Program.  The                                                                    
grant  program  was  funded  through  the  Higher  Education                                                                    
Investment  Fund  in the  amount  of  $1,165,200 in  FY  25,                                                                    
$1,235,300 in FY  26, $1,306,100 in FY 27,  $1,377,500 in FY                                                                    
28, $1,449,700 in  FY 29, and $1,522,600 in FY  30. Based on                                                                    
current statute,  the grant  would increase  as a  result of                                                                    
the projected APS  increase in the bill.  She explained that                                                                    
under  AS  14.43.915(c)  one-third of  the  combined  amount                                                                    
shall  be available  solely for  payment of  grants awarded.                                                                    
Statute  directed ACPE  to annually  allocate two-thirds  of                                                                    
the  combined  amount  in  the   accounts  to  eligible  APS                                                                    
applicants. She  elaborated that  if an  insufficient number                                                                    
of qualified applicants were  awarded grants or scholarships                                                                    
or  both, the  commissioner  was directed  to redeposit  the                                                                    
remaining funds into the  Alaska Higher Education Investment                                                                    
Fund. She noted that if  the appropriation increased for the                                                                    
APS, it would  also increase for the  Alaska Education Grant                                                                    
proportionately.                                                                                                                
                                                                                                                                
9:08:17 AM                                                                                                                    
                                                                                                                                
Ms.  Efird  reviewed  OMB component  number  2738  for  ACPE                                                                    
program administration and operation.  The note pertained to                                                                    
administrative   allocation   for  staffing   charged   with                                                                    
implementing the  program. The note included  one-time costs                                                                    
of  $31,200  for  personal  services   and  $16,000  in  the                                                                    
services  category for  a total  of  $47,200. She  explained                                                                    
that  all of  the eligibility  qualification changes  in the                                                                    
two programs would require working  with a contractor on the                                                                    
changes to  the Alaska Student  Aid Portal managed  by ACPE.                                                                    
She  elaborated that  the portal  was the  platform used  to                                                                    
receive information  from DEED  for eligibility  of students                                                                    
and disbursement  to the  institutions and  certification of                                                                    
students.  Additionally,   the  note  included   $6,000  for                                                                    
regulation  changes needed  on  the  postsecondary side  and                                                                    
$10,000 to update the student portal.                                                                                           
                                                                                                                                
9:10:37 AM                                                                                                                    
                                                                                                                                
Co-Chair Foster recognized  House Education Committee member                                                                    
Representative Rebecca Himschoot in the committee room.                                                                         
                                                                                                                                
Co-Chair  Foster asked  for  a review  of  the final  fiscal                                                                    
note.                                                                                                                           
                                                                                                                                
DEB RIDDLE,  OPERATIONS MANAGER, DIVISION OF  INNOVATION AND                                                                    
EDUCATION  EXCELLENCE,  DEPARTMENT  OF EDUCATION  AND  EARLY                                                                    
DEVELOPMENT,  reviewed   OMB  component  number   2796.  She                                                                    
relayed that  the fiscal  note included  a one-time  cost of                                                                    
$6,000  for updating  regulations on  the K-12  side of  the                                                                    
APS,  which would  include updating  the curriculum  options                                                                    
providing  information about  the notification  for students                                                                    
and removing testing qualifications  as outlined in the law.                                                                    
The regulations would  be updated in order  for districts to                                                                    
have the necessary guidance to  work on the scholarship with                                                                    
students.                                                                                                                       
                                                                                                                                
9:12:19 AM                                                                                                                    
                                                                                                                                
Co-Chair  Johnson  MOVED  to REPORT  CSHB  148(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CSHB 148(FIN)  was REPORTED  out of  committee with  ten "do                                                                    
pass"   recommendations   and    one   "no   recommendation"                                                                    
recommendation and  with four new  fiscal impact  notes from                                                                    
the Department of Education and Early Development.                                                                              
                                                                                                                                
9:13:18 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:15:15 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 193                                                                                                            
                                                                                                                                
     "An Act relating to funding for Internet services for                                                                      
     school districts; and providing for an effective                                                                           
     date."                                                                                                                     
                                                                                                                                
9:15:24 AM                                                                                                                    
                                                                                                                                
Co-Chair  Foster noted  there  were two  amendments for  the                                                                    
bill.                                                                                                                           
                                                                                                                                
Representative  Stapp  MOVED  to   ADOPT  Amendment  1,  33-                                                                    
LS0817\A.31 (Bergerud, 2/13/24) (copy on file):                                                                                 
                                                                                                                                
     Page 1, following line 9:                                                                                                  
     Insert a new bill section to read:                                                                                         
     "*  Sec.  2. AS  14.03.127  is  amended by  adding  new                                                                    
     subsections to read:                                                                                                       
     (d)  If  the  total  cost  to  a  school  district  for                                                                    
     Internet  services exceeds  the amount  awarded to  the                                                                    
     district under  the federal universal  services program                                                                    
     combined  with the  amount awarded  under this  section                                                                    
     and  the district  uses an  Internet services  provider                                                                    
     that  is  not  approved  under  the  federal  universal                                                                    
     services  program  but  that meets  the  needs  of  the                                                                    
     district,  the  district  remains eligible  to  receive                                                                    
     funding  under this  section, and  the  school may  use                                                                    
     funding received under this section  to pay for part of                                                                    
     the cost of using the Internet services provider.                                                                          
     (e)  If  the  total  cost  to  a  school  district  for                                                                    
     Internet  services from  an Internet  services provider                                                                    
     that  is  not  approved  under  the  federal  universal                                                                    
     services program  is equal to  or less than  the amount                                                                    
     that would  have been awarded  to the school  under (a)                                                                    
     or  (b)  of  this   section,  the  school  district  is                                                                    
     eligible to receive an amount  equal to the actual cost                                                                    
     for  Internet  services,  up to  the  amount  that  the                                                                    
     school district  would have been  awarded under  (a) or                                                                    
     (b) of this section."                                                                                                      
                                                                                                                                
     Renumber the following bill section accordingly.                                                                           
                                                                                                                                
Co-Chair Foster OBJECTED for discussion.                                                                                        
                                                                                                                                
Representative  Stapp explained  the amendment.  He outlined                                                                    
some of the  structural issues he believed to  be within the                                                                    
program  that  were  likely  not  the  intent  of  the  bill                                                                    
sponsor.  He  was  offering the  amendment  because  he  had                                                                    
compared the Universal Services  Program information and all                                                                    
of  the   E-Rate  billings  per  eligible   school  (in  the                                                                    
committee packets) to the  Broadband Assistance Grants (BAG)                                                                    
that some of the school  districts receive and had noticed a                                                                    
couple of things  that did not add up.  First, he determined                                                                    
that  after large  federal and  state  subsidies there  were                                                                    
rural  schools in  small  districts that  still  had to  pay                                                                    
around  $50,000 for  internet.  He  highlighted that  during                                                                    
public  testimony  the  committee   had  heard  from  school                                                                    
districts that  were buying systems  for internet  that were                                                                    
not  qualifying for  a BAG  award. He  used the  Bristol Bay                                                                    
School  District as  an example  and stated  that the  total                                                                    
monthly  billing   from  its   service  provider   was  over                                                                    
$100,000.  A 90  percent  E-Rate discount  from the  federal                                                                    
government  was  applied  to  the  school  district's  bill.                                                                    
Additionally, the school district received $91,000 for BAG.                                                                     
                                                                                                                                
Representative  Stapp underscored  that despite  all of  the                                                                    
subsidies,  the  school  district   paid  over  $50,000  for                                                                    
internet  the previous  year. He  relayed that  staff within                                                                    
the  school  district had  told  him  they were  looking  at                                                                    
buying  a different  service  provider  because despite  the                                                                    
subsidies, their  internet costs were still  extremely high.                                                                    
He stated that  the school district had  options that worked                                                                    
better  that  cost  less  money; however,  due  to  the  BAG                                                                    
structure, the  school district could not  receive any state                                                                    
money  for those  other  options. He  believed  that if  the                                                                    
state was going  to give the school district  $91,000 in BAG                                                                    
funds and the district wanted  to move to a service provider                                                                    
that better  met its needs at  a cost of $40,000,  the state                                                                    
should  be able  to  give the  school  district the  $40,000                                                                    
instead.  He  reasoned the  school  district  would get  the                                                                    
product it wanted, and the  state would save money. He noted                                                                    
there were  some issues  with the  amendment that  should be                                                                    
discussed.                                                                                                                      
                                                                                                                                
9:18:46 AM                                                                                                                    
                                                                                                                                
Co-Chair Edgmon  felt like they were  relitigating the bill.                                                                    
He had brought the bill  to the committee and explained that                                                                    
the intent was to build  off a well established program that                                                                    
had been through  the legislature in a  couple of iterations                                                                    
and  involved  a very  complex  application  process at  the                                                                    
school district level.  He stressed that the  program had to                                                                    
meet a  complex federal regulatory process  in the Universal                                                                    
Services  Program. He  stated that  on top  of those  things                                                                    
there was the Board of  Education regulatory process. He was                                                                    
opposed  to  relitigating  the  bill  and  spending  several                                                                    
additional hearings on the topic.                                                                                               
                                                                                                                                
Representative Stapp  stated it  was not  his intent  to re-                                                                    
litigate the bill. His intent  was to withdraw the amendment                                                                    
because  he did  not believe  it met  his intended  goal. He                                                                    
believed the intent of the program  - when it was enacted in                                                                    
2014 - was  to help rural schools get  higher speed internet                                                                    
and  act  as  an  equalizer [with  urban  schools].  He  had                                                                    
listened to  the meetings from  2014 and 2019.  He clarified                                                                    
that he was not out  to structurally change the program. His                                                                    
only  concern,  particularly  when  it came  to  the  fiscal                                                                    
aspect of the  BAG award, was that the  discussion was about                                                                    
two separate  things that did  not depend on each  other. He                                                                    
remarked that there  were plenty of schools  that had E-Rate                                                                    
awards that  did not get  BAG money. He elaborated  that the                                                                    
state  grant was  not  dependent on  the  E-Rate awards.  He                                                                    
reasoned  that it  was  dependent on  the  fact that  E-Rate                                                                    
awards  were based  on the  concept of  megabits per  second                                                                    
(Mbps).                                                                                                                         
                                                                                                                                
Representative  Stapp  emphasized  there  was  no  mechanism                                                                    
within  the  program  that considered  an  internet  service                                                                    
provider that  did not maintain  a constant speed  (i.e., 25                                                                    
to  100  Mbps).  He  highlighted a  scenario  where  an  ISP                                                                    
[internet  service provider]  offered internet  at 100  Mbps                                                                    
that  increased  to 105  Mbps  occasionally  and the  school                                                                    
district could no longer receive  a BAG award. He knew there                                                                    
was  a problem,  but  he did  not  know how  to  fix it.  He                                                                    
suggested at some  point the legislature should  look at how                                                                    
to better  deliver the  goal of  the best  internet possible                                                                    
for school  districts. He  stated his intent  was to  try to                                                                    
deliver a better outcome that  districts wanted and to leave                                                                    
the decision up to districts.  He believed it would cost the                                                                    
districts and the state less  money. He highlighted the goal                                                                    
of  lowering  the fixed  costs  paid  by districts  via  the                                                                    
program.                                                                                                                        
                                                                                                                                
9:22:02 AM                                                                                                                    
                                                                                                                                
Co-Chair Foster  noted there were two  avenues. Withdraw the                                                                    
amendment or explore the issue further.                                                                                         
                                                                                                                                
Co-Chair  Edgmon wanted  to  respect Representative  Stapp's                                                                    
ability  to  investigate  the  bill;  however,  he  reminded                                                                    
committee members of the hard  deadline. He pointed out that                                                                    
there was separate  legislation [SB 140] that  would need to                                                                    
go through  a conference committee  if it were  to supersede                                                                    
HB  193. He  underscored that  time was  of the  essence. He                                                                    
remarked that  virtually every  school district  had visited                                                                    
the building  in the  past couple  of weeks  and he  had 100                                                                    
conversations  that had  touched on  the issue.  He was  not                                                                    
saying the  concerns addressed by Representative  Stapp were                                                                    
not legitimate;  however, none of  the school  districts had                                                                    
brought  up  the  issue  to that  extent.  He  believed  the                                                                    
recognition was that  100 Mbps was the best  the state could                                                                    
do,  but in  a perfect  world it  would be  much higher.  He                                                                    
stated there was a large fiscal note attached to the bill.                                                                      
                                                                                                                                
Co-Chair Edgmon recognized the bill  was imperfect in nature                                                                    
as  had been  the case  upon introduction  in 2014  and when                                                                    
amended in 2020.  The hope was that the  billions of dollars                                                                    
in  federal funds  primarily  coming  through the  Broadband                                                                    
Equity,  Access, and  Deployment (BEAD)  program would  mean                                                                    
the  state did  not have  to put  undesignated general  fund                                                                    
(UGF)  money into  supporting the  BAG program.  He believed                                                                    
the  discussion  was  worthy,   but  he  stressed  that  the                                                                    
committee could  spend a lot of  time in the minutia  of the                                                                    
bill and  still not  have a perfect  outcome. He  stated the                                                                    
bill helped a  lot of schools and may not  perfectly fit the                                                                    
scope of  every school;  however, the business  managers and                                                                    
superintendents in  his district  had told  him it  was good                                                                    
enough. He highlighted that missing  the deadline would mean                                                                    
losing an entire year.                                                                                                          
                                                                                                                                
Co-Chair  Foster echoed  Co-Chair Edgmon's  comments in  the                                                                    
sense that  the program  had existed for  some time,  and he                                                                    
did not  want the perfect to  become the enemy of  the good.                                                                    
He wanted to  give DEED time to  elaborate on Representative                                                                    
Stapp's comments  that there  did not appear  to be  an easy                                                                    
fix. He suspected  the department would likely  say the same                                                                    
thing.                                                                                                                          
                                                                                                                                
9:25:11 AM                                                                                                                    
                                                                                                                                
Representative  Stapp asked  to hear  from individuals  with                                                                    
DEED.                                                                                                                           
                                                                                                                                
LAURAL SHOOP,  LEGISLATIVE LIAISON, DEPARTMENT  OF EDUCATION                                                                    
AND EARLY DEVELOPMENT, introduced herself.                                                                                      
                                                                                                                                
KAREN   MORRISON,   DIRECTOR,   DIVISION  OF   FINANCE   AND                                                                    
FACILITIES, DEPARTMENT  OF EDUCATION AND  EARLY DEVELOPMENT,                                                                    
introduced herself.                                                                                                             
                                                                                                                                
Co-Chair Foster asked if there was  an easy fix to the issue                                                                    
brought up by Representative Stapp.                                                                                             
                                                                                                                                
Ms.  Shoop believed  the  intent of  the  amendment was  for                                                                    
schools  to  have  alternatives to  the  federally  approved                                                                    
internet service  providers. She  explained that  the E-Rate                                                                    
program   had   been   long-established   by   the   federal                                                                    
government.  She detailed  that  internet service  providers                                                                    
were required  to register with  the federal  E-Rate program                                                                    
in order to be considered  in the application process. There                                                                    
was  a very  specific  set of  forms  school districts  were                                                                    
required to  use when applying  for the E-Rate  program. She                                                                    
believed  the amendment  was intended  for internet  service                                                                    
providers  who   were  not  registered  under   the  federal                                                                    
services program to be eligible for school BAG funding.                                                                         
                                                                                                                                
Representative Stapp  agreed. He  clarified that he  did not                                                                    
necessarily  mean  it  should   be  a  requirement  for  the                                                                    
internet  service  provider  to be  registered.  He  thought                                                                    
there were  benefits of having  the provider  registered. He                                                                    
stated that  at the  end of  the day it  did not  matter. He                                                                    
explained that  the intent  of the amendment  was to  give a                                                                    
school district the  ability to use a  service provider that                                                                    
best suited  its needs.  He suggested that  if the  cost was                                                                    
less, the state should give  the school districts the lesser                                                                    
amount of money to cover the  entirety of their cost as long                                                                    
as  it was  less  than  the state  would  have given  school                                                                    
districts  under the  BAG program.  He was  not sure  how to                                                                    
craft it  properly. He asked  the department why a  hard cap                                                                    
on the Mbps did not work with different service providers.                                                                      
                                                                                                                                
Ms. Shoop deferred the question to a colleague.                                                                                 
                                                                                                                                
FAYE  TANNER, PROGRAM  COORDINATOR, DEPARTMENT  OF EDUCATION                                                                    
AND EARLY  DEVELOPMENT (via  teleconference), asked  to hear                                                                    
the question again.                                                                                                             
                                                                                                                                
Representative  Stapp  considered  the  scenario  where  the                                                                    
eligible  BAG award  was  increased to  100  Mbps. He  asked                                                                    
whether  an internet  service provider  that  had a  service                                                                    
rate that fluctuated between 80  and 200 was eligible to use                                                                    
BAG money because the rate was not a consistent number.                                                                         
                                                                                                                                
Ms.  Tanner responded  that under  current statute  anything                                                                    
exceeding 100 Mbps would not  qualify. She stated it was one                                                                    
of the issues several school districts were having with                                                                         
the use  of Starlink  or speed that  exceeded 100  Mbps. The                                                                    
current speed was 25 Mbps.                                                                                                      
                                                                                                                                
9:29:44 AM                                                                                                                    
                                                                                                                                
Representative  Stapp relayed  that  he had  talked to  many                                                                    
school  district  business  managers  about  their  upcoming                                                                    
bids.  He relayed  that some  of the  school districts  were                                                                    
planning on changing their bids. He WITHDREW Amendment 1.                                                                       
                                                                                                                                
Representative Coulombe WITHDREW  Amendment 2, 33-LS0817\A.7                                                                    
(Klein/Bergerud, 2/12/24)(copy on file).                                                                                        
                                                                                                                                
Co-Chair Foster  highlighted that the fiscal  notes had been                                                                    
reviewed the previous week.                                                                                                     
                                                                                                                                
Co-Chair Johnson  MOVED to  REPORT HB  193 out  of committee                                                                    
with individual  recommendations and the  forthcoming fiscal                                                                    
note and the ability for  Legislative Legal Services to make                                                                    
technical and conforming changes.                                                                                               
                                                                                                                                
HB 193  was REPORTED out  of committee with eight  "do pass"                                                                    
recommendations,  two "amend"  recommendations, and  one "no                                                                    
recommendation"  recommendation  and  with  one  new  fiscal                                                                    
impact  note  from the  Department  of  Education and  Early                                                                    
Development.                                                                                                                    
                                                                                                                                
9:31:46 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:33:28 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 155                                                                                                            
                                                                                                                                
     "An Act establishing the Alaska Military Affairs                                                                           
     Commission; and relating to the duties and powers of                                                                       
     the Alaska Military Affairs Commission."                                                                                   
                                                                                                                                
9:33:32 AM                                                                                                                    
                                                                                                                                
Co-Chair Foster  noted one amendment  had been  received. He                                                                    
would hear public testimony first.                                                                                              
                                                                                                                                
Co-Chair Foster OPENED public testimony.                                                                                        
                                                                                                                                
Co-Chair Foster CLOSED public testimony.                                                                                        
                                                                                                                                
9:34:41 AM                                                                                                                    
                                                                                                                                
Representative  Hannan  MOVED  to  ADOPT  Amendment  1,  33-                                                                    
LS0701\D.2 (Marx/Gunther, 2/7/24)(copy on file):                                                                                
                                                                                                                                
     Page 3, lines 10-12:                                                                                                       
     Delete all material and insert:                                                                                            
     "(5)  assist and  advise communities  and the  state in                                                                    
     the  design  and  execution of  programs  that  enhance                                                                    
     communities'  relationships with  installations of  the                                                                    
     armed forces  of the United States  and defense-related                                                                    
     businesses,  including in  the areas  of public  school                                                                    
     education,  in-state  higher  education  and  training,                                                                    
     cultural   and  recreational   community  assets,   and                                                                    
     housing and energy affordability;"                                                                                         
                                                                                                                                
Co-Chair Foster OBJECTED for discussion.                                                                                        
                                                                                                                                
Representative  Hannan explained  the amendment  on page  3,                                                                    
lines 10-12  added a second  clause and gave  some structure                                                                    
and guidance with issues that  would help assist communities                                                                    
in  preparing and  developing relationships  with the  armed                                                                    
forces.  She listed  examples  including  schools that  were                                                                    
available,  education, training,  cultural and  recreational                                                                    
assets, and housing and energy  affordability. She wanted to                                                                    
include   the   items   because   many   local   governments                                                                    
communicated that they were issues that arose.                                                                                  
                                                                                                                                
Representative   Stapp   supported   and   appreciated   the                                                                    
amendment's guiding principles.                                                                                                 
                                                                                                                                
Co-Chair Foster WITHDREW the OBJECTION.                                                                                         
                                                                                                                                
Co-Chair  Foster  relayed  that  the fiscal  note  had  been                                                                    
reviewed the prior week.                                                                                                        
                                                                                                                                
There being NO further OBJECTION, Amendment 1 was ADOPTED.                                                                      
                                                                                                                                
Co-Chair  Johnson  MOVED  to REPORT  CSHB  155(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying or forthcoming fiscal note.                                                                                        
                                                                                                                                
9:37:42 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:37:49 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Foster added that the committee gave Legislative                                                                       
Legal Services the ability to make technical and conforming                                                                     
changes.                                                                                                                        
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
CSHB 155(FIN)  was REPORTED  out of  committee with  ten "do                                                                    
pass"   recommendations   and    one   "no   recommendation"                                                                    
recommendation and with one new  fiscal impact note from the                                                                    
Office of the Governor.                                                                                                         
                                                                                                                                
Co-Chair Foster reviewed the schedule for the afternoon                                                                         
meeting.                                                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
9:38:53 AM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 9:38 a.m.                                                                                          

Document Name Date/Time Subjects
HB 193 Amendments 1-2 021324.pdf HFIN 2/14/2024 8:30:00 AM
HB 193
HB 155 Amendment 1 Hannan 021324.pdf HFIN 2/14/2024 8:30:00 AM
HB 155
HB 193 Amendment 1 Backup DEED BAG 021424.pdf HFIN 2/14/2024 8:30:00 AM
HB 193
HB 193 Amendment 1 Backup E-Rate_Recipient_Details_And_Commitments_20240125_E-Rate_FY2023_School_Internet.pdf HFIN 2/14/2024 8:30:00 AM
HB 193