Legislature(2013 - 2014)HOUSE FINANCE 519

02/13/2014 01:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
--Delayed until 1:45 p.m.--
*+ HB 231 CATTLE BRAND REGISTRATION TELECONFERENCED
Moved Out of Committee
+ HB 179 BROADBAND DISCOUNTS FOR SCHOOLS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                     February 13, 2014                                                                                          
                         1:48 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:48:03 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stoltze called the  House Finance Committee meeting                                                                    
to order at 1:48 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Alan Austerman, Co-Chair                                                                                         
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Mark Neuman, Vice-Chair                                                                                          
Representative Mia Costello                                                                                                     
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative David Guttenberg                                                                                                 
Representative Lindsey Holmes                                                                                                   
Representative Cathy Munoz                                                                                                      
Representative Steve Thompson                                                                                                   
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative   Mike   Chenault,  Sponsor;   Representative                                                                    
Benjamin   Nageak,  Sponsor;   Linda  Thibodeau,   Director,                                                                    
Libraries,  Archives and  Museums,  Department of  Education                                                                    
and Early  Development; Valerie Oliver,  E-Rate Coordinator,                                                                    
Department of  Education and  Early Development;  Les Morse,                                                                    
Deputy  Commissioner,  Department  of  Education  and  Early                                                                    
Development.                                                                                                                    
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Peggy  Cowan,  Superintendent,  North Slope  Borough  School                                                                    
District;  Debby Edwardson,  President, North  Slope Borough                                                                    
School  District  Board  of  Education;  David  Nees,  Self,                                                                    
Anchorage;  Ed   Graff,  Superintendent,   Anchorage  School                                                                    
District; Pete Hoepfner,  President, Cordova School District                                                                    
School Board.                                                                                                                   
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 179    BROADBAND DISCOUNTS FOR SCHOOLS                                                                                       
                                                                                                                                
          HB 179 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
HB 231    CATTLE BRAND REGISTRATION                                                                                             
                                                                                                                                
          HB 231 was REPORTED out of committee with a "do                                                                       
          pass" recommendation and with one new zero fiscal                                                                     
          note from the Department of Revenue.                                                                                  
                                                                                                                                
1:48:16 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze discussed the agenda for the day.                                                                              
                                                                                                                                
HOUSE BILL NO. 231                                                                                                            
                                                                                                                                
     "An Act eliminating the Department of Revenue's duty                                                                       
     to register cattle brands."                                                                                                
                                                                                                                                
1:48:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MIKE  CHENAULT,  SPONSOR, relayed  that  the                                                                    
bill  would   remove  AS  44.25.120(3)  that   required  the                                                                    
Department of  Revenue (DOR) to  register cattle  brands. He                                                                    
detailed that prior to statehood  all duties associated with                                                                    
the  registration of  cattle brands  had  resided under  the                                                                    
territorial  Department of  Finance,  which  had later  been                                                                    
assumed by DOR.  He noted that according  to the Legislative                                                                    
Research  Division  that  although  the  duty  of  recording                                                                    
cattle brands was delegated through  statute to the Division                                                                    
of Agriculture, legislators may  have justified the split by                                                                    
the   use  of   the  differing   terms  "recording"   versus                                                                    
"registration."   He  believed   what  was   meant  by   the                                                                    
distinction  was  unclear.  He  referred  to  a  legislative                                                                    
report in members' packets (copy  on file) that provided the                                                                    
history  and information  related to  cattle branding  under                                                                    
DOR. The elimination of the  statute would help clarify that                                                                    
the  responsibility  clearly  lay  with  the  Department  of                                                                    
Agriculture  and not  DOR. He  referred to  a book  that the                                                                    
Division of Agriculture  published and distributed annually,                                                                    
which  included existing  cattle brands.  He explained  that                                                                    
the bill  would not create substantial  savings; however, he                                                                    
believed it was prudent to  remove any statutes that were no                                                                    
longer relevant.                                                                                                                
                                                                                                                                
1:52:26 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze pointed  to the zero fiscal  note from DOR.                                                                    
He  asked for  verification  that the  bill  would save  the                                                                    
state money.                                                                                                                    
                                                                                                                                
Representative Chenault  replied that  the savings  would be                                                                    
negligible. He believed  it cost $1.00 to  register a brand;                                                                    
the brand  could not  be sold  for a  price above  $1.99. He                                                                    
surmised that savings would not  be significant; however any                                                                    
money  saved and  the removal  of  any unnecessary  statutes                                                                    
would be beneficial.                                                                                                            
                                                                                                                                
Co-Chair Stoltze CLOSED public testimony.                                                                                       
                                                                                                                                
Vice-Chair Neuman  MOVED to REPORT  HB 231 out  of committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
note.                                                                                                                           
                                                                                                                                
Representative  Guttenberg   OBJECTED  for   discussion.  He                                                                    
thanked  the  sponsor  for introducing  the  legislation  to                                                                    
remove   the  unneeded   statute.  Representative   Chenault                                                                    
replied that he was working  on another piece of legislation                                                                    
that would remove an additional superfluous statute.                                                                            
                                                                                                                                
Representative Gara supported the legislation.                                                                                  
                                                                                                                                
Representative Guttenberg WITHDREW his OBJECTION.                                                                               
                                                                                                                                
There being  NO further OBJECTION,  HB 231 was  REPORTED out                                                                    
of committee  with a "do  pass" recommendation and  with one                                                                    
new zero fiscal note from the Department of Revenue.                                                                            
                                                                                                                                
1:56:34 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:57:03 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 179                                                                                                            
                                                                                                                                
     "An  Act  providing  for   public  school  funding  for                                                                    
     telecommunications or Internet services."                                                                                  
                                                                                                                                
1:57:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BENJAMIN NAGEAK, SPONSOR, read an opening                                                                        
statement (copy on file):                                                                                                       
                                                                                                                                
     Good  Afternoon   Mr.  Chairman  and  members   of  the                                                                    
     committee. Thank  you for hearing  my bill, HB  179, An                                                                    
     Act providing  for public  school funding  for Internet                                                                    
     services.                                                                                                                  
                                                                                                                                
     The  federal  E-rate  program provides  funding  for  a                                                                    
     portion  of   a  school   district's  telecommunication                                                                    
     costs.  HB  179  will  provide state  funding  for  the                                                                    
     portion not covered by the  federal discount. For FY 15                                                                    
    that amount is approximately $13.8 million dollars.                                                                         
                                                                                                                                
     This  bill also  allows  school  districts to  increase                                                                    
     their bandwidth.  Right now about 1/3  or approximately                                                                    
     170 schools  have less than  10 megabits per  second of                                                                    
     Internet services.  HB 179  will allow school districts                                                                    
     below  10  megabits  per  second to  come  up  to  that                                                                    
     minimum  level  and  receive state  reimbursement.  For                                                                    
     schools that  are already at  that level or  higher, HB                                                                    
     179  allows those  schools to  increase 10%  over their                                                                    
     prior year  and receive  state funding. This  bill does                                                                    
     not limit  any school district to  higher increases but                                                                    
     does limit the state contribution at that point.                                                                           
                                                                                                                                
     This bill will benefit  all school districts across the                                                                    
     state. HB  179 will assist school  districts with their                                                                    
     Internet needs  and bring all schools  across Alaska to                                                                    
     a minimum level of Internet services.                                                                                      
                                                                                                                                
     According  to   the  Statewide  Broadband   Task  Force                                                                    
     Report,  "Schools that  cannot afford  enough broadband                                                                    
     or do not  have available broadband have  to limit what                                                                    
     kinds of educational content can  be downloaded and who                                                                    
     can  access this  information."  The  report says  that                                                                    
     "access  to adequate  bandwidth translates  directly to                                                                    
     better  opportunity  and  improves  chances  of  higher                                                                    
     student achievement."                                                                                                      
                                                                                                                                
     And with  the mandated  online testing on  the horizon,                                                                    
     this is  even more important. Many  schools, especially                                                                    
     in rural  areas, will be  limited in  their educational                                                                    
     opportunities.                                                                                                             
                                                                                                                                
     Just as  a side note,  to give you  an idea of  what we                                                                    
     are looking at  in terms of Internet  service for these                                                                    
     school  districts under  10 megabits  per second  - the                                                                    
     Alaska  Legislature operates  up  to  100 megabits  per                                                                    
     second.   When my staff asked  our information services                                                                    
     manager  what  it  would  be  like if  we  were  at  10                                                                    
     megabits   per   second   the  answer   was   "complete                                                                    
     standstill."                                                                                                               
                                                                                                                                
     Thank  you for  again, Mr.  Chairman, for  hearing this                                                                    
     bill today.  I am  happy to  answer any  questions from                                                                    
     the committee.  My staff  is on hand  to assist  me and                                                                    
     there  are people  from the  Department here  to answer                                                                    
     technical questions those related to the fiscal note.                                                                      
                                                                                                                                
2:00:34 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze  thanked the sponsor for  bringing the bill                                                                    
forward.  He  had  visited districts  that  had  pointed  to                                                                    
bandwidth as one of their largest challenges.                                                                                   
                                                                                                                                
Representative Holmes  wondered if  the bill  would actually                                                                    
require  schools  to use  the  money  for the  upgrade.  She                                                                    
relayed   that  the   Department  of   Administration  (DOA)                                                                    
subcommittee  had  spent  significant   time  on  the  issue                                                                    
earlier  in  the  day.  She  noted  that  currently  schools                                                                    
received an  E-rate discount. She  believed that  if funding                                                                    
was available the  base amount would pick  up the difference                                                                    
between  what  schools paid  and  the  federal subsidy.  She                                                                    
referred  to   a  second  component  that   allowed  for  an                                                                    
adjustment of  up to 10  percent of  the amount paid  or the                                                                    
amount needed to  bring the base rate up  to the applicant's                                                                    
share for 10 megabits per second.                                                                                               
                                                                                                                                
Representative Nageak  replied that the money  would only go                                                                    
to the upgrades.  He elaborated that the  money would enable                                                                    
schools to provide improved learning services.                                                                                  
                                                                                                                                
Representative Holmes  agreed that  most schools  would take                                                                    
the money to  use on upgrades; however, she  did not believe                                                                    
the requirement was included under the bill.                                                                                    
                                                                                                                                
2:04:33 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze  asked if  a megabit had  to do  with speed                                                                    
and   a  megabyte   had  to   do   with  storage   capacity.                                                                    
Representative  Nageak believed  megabits were  smaller than                                                                    
megabytes.                                                                                                                      
                                                                                                                                
Co-Chair Stoltze  wondered if there  were eight  megabits in                                                                    
one megabyte. Representative Nageak believed so.                                                                                
                                                                                                                                
Representative Costello pointed  to the bottom of  page 1 of                                                                    
the  legislation. She  had  read that  of  the schools  that                                                                    
would qualify there  was only one school  that was currently                                                                    
at 10  megabits. She  asked if the  sponsor had  spoken with                                                                    
the  telecommunications   industry  about   potential  costs                                                                    
associated  the   increased  speed.  She  wondered   if  the                                                                    
legislation would  increase the current  foundation formula.                                                                    
She asked if  the sponsor had considered  tying the increase                                                                    
in  funds to  the  project proposed  in  the legislation  in                                                                    
order to prevent funds from being spent on other items.                                                                         
                                                                                                                                
Representative Nageak  replied that the bill  only pertained                                                                    
to increasing broadband for schools.  He did not believe the                                                                    
funds could be used for another purpose.                                                                                        
                                                                                                                                
Representative  Costello wondered  if there  was someone  to                                                                    
speak about the current status of broadband.                                                                                    
                                                                                                                                
Co-Chair  Stoltze   noted  that   staff  members   from  the                                                                    
Department of  Education and  Early Development  (DEED) were                                                                    
present.                                                                                                                        
                                                                                                                                
Representative Nageak  relayed that schools,  libraries, and                                                                    
rural healthcare facilities currently used broadband.                                                                           
                                                                                                                                
2:08:26 PM                                                                                                                    
                                                                                                                                
Representative Costello remarked that  some of the committee                                                                    
members did  not sit  on the DOA  subcommittee. She  did not                                                                    
know  about the  broadband  status in  Alaska. She  wondered                                                                    
whether the bill was the best  place to address the issue if                                                                    
increased  broadband was  also  needed in  areas other  than                                                                    
education. She asked for comment on the status.                                                                                 
                                                                                                                                
Representative Wilson wondered if  the funding would go only                                                                    
to schools  or to  libraries as well.  Representative Nageak                                                                    
replied that  schools, libraries, and rural  healthcare were                                                                    
already in place.                                                                                                               
                                                                                                                                
Representative Wilson  noted that there were  currently some                                                                    
allocated  funds  used  to offset  the  E-rate  through  the                                                                    
Online  with Libraries  (OWL) program.  She wondered  if the                                                                    
bill  would  help  to  pay for  broadband  in  libraries  in                                                                    
addition to in schools.                                                                                                         
                                                                                                                                
Representative  Nageak  replied  that the  legislation  only                                                                    
pertained to schools.                                                                                                           
                                                                                                                                
Representative  Wilson was  interested in  data showing  the                                                                    
current broadband in each school district.                                                                                      
                                                                                                                                
2:10:56 PM                                                                                                                    
                                                                                                                                
LINDA THIBODEAU, DIRECTOR,  LIBRARIES, ARCHIVES AND MUSEUMS,                                                                    
DEPARTMENT OF EDUCATION  AND EARLY DEVELOPMENT, communicated                                                                    
that DEED  had surveyed school  districts the prior  year to                                                                    
determine  which  of the  schools  were  under and  over  10                                                                    
megabits per  second in  order to  compile the  fiscal note;                                                                    
DEED  had  created a  spreadsheet  by  school district.  The                                                                    
department had  also surveyed vendors to  determine what the                                                                    
upgrades  would  cost.  Additionally,  DEED  had  looked  at                                                                    
districts that  were already  at 10  megabits per  second or                                                                    
greater  and had  multiplied  the figure  by  10 percent  to                                                                    
estimate costs  in the out-years  shown on the  fiscal note.                                                                    
The fiscal note had been  compiled the prior March and could                                                                    
be updated  in March  2014 when the  new E-rate  filing year                                                                    
began. She  detailed that the information  only pertained to                                                                    
schools.  She remarked  that  libraries  located in  schools                                                                    
would receive the bandwidth upgrade.                                                                                            
                                                                                                                                
Representative  Costello  asked  for verification  that  the                                                                    
cost to  cover the  difference was approximately  $9 million                                                                    
and  the  cost  for   schools  without  broadband  would  be                                                                    
approximately  $32 million.  Ms. Thibodeau  replied that  it                                                                    
would cost  $7 million  to bring schools  up to  10 megabits                                                                    
per second in the first  year; approximately 170 schools had                                                                    
reported their  bandwidth as below  10 megabits  per second.                                                                    
The  remaining undiscounted  portion of  the broadband  cost                                                                    
for  public  schools  above  10   megabits  per  second  was                                                                    
approximately $15  million. Therefore, the first  year would                                                                    
cost approximately  $22 million.  She stated  that broadband                                                                    
costs were a  moving target. The department  believed that a                                                                    
portion  of the  170 schools  below 10  megabits per  second                                                                    
were currently  negotiating for an  increase to  10 megabits                                                                    
or more. The  department would gather the  information as it                                                                    
became available.                                                                                                               
                                                                                                                                
Representative  Costello  asked  if  the  legislation  would                                                                    
require  the state  to pay  for maintenance  associated with                                                                    
the bandwidth speed.                                                                                                            
                                                                                                                                
2:14:43 PM                                                                                                                    
                                                                                                                                
Ms.  Thibodeau  asked  for clarification  on  the  question.                                                                    
Representative  Costello clarified  that she  was interested                                                                    
in  infrastructure that  would keep  equipment updated.  Ms.                                                                    
Thibodeau  believed  that  some  infrastructure  costs  were                                                                    
included in the discountable portion  of E-rate and would be                                                                    
included  in  the  broadband  costs.  She  deferred  to  the                                                                    
department's E-rate consultant for further detail.                                                                              
                                                                                                                                
2:16:02 PM                                                                                                                    
                                                                                                                                
VALERIE OLIVER, E-RATE  COORDINATOR, DEPARTMENT OF EDUCATION                                                                    
AND  EARLY DEVELOPMENT,  provided a  brief e-rate  overview.                                                                    
She helped  all of Alaska's  schools and libraries  to apply                                                                    
for  their discounted  portion of  E-rate universal  service                                                                    
fund monies. She explained that  E-rate dollars were awarded                                                                    
to schools and  libraries depending on the  poverty level in                                                                    
the  local  communities as  measured  by  the Department  of                                                                    
Agriculture or  the national school  lunch program;  not all                                                                    
schools  and  libraries  received  the  same  discount.  She                                                                    
detailed  that  a  location  such as  Unalaska  (with  a  60                                                                    
percent national  school lunch  program discount)  would not                                                                    
be the  same as  Kuspuk (with a  90 percent  national school                                                                    
lunch  program   discount).  She  estimated   that  Alaska's                                                                    
average discount  on phone and internet  connectivity was 75                                                                    
percent. The  E-rate program  primarily related  to internet                                                                    
connectivity;  each  district   had  a  different  discount.                                                                    
Communities   were   responsible    for   funding   whatever                                                                    
percentage was  not covered; a  90 percent discount  was the                                                                    
highest discount that could be  received. She clarified that                                                                    
the  applicant's   non-discounted  share  referred   to  the                                                                    
portion of the bill not covered by E-rate.                                                                                      
                                                                                                                                
2:18:21 PM                                                                                                                    
                                                                                                                                
Representative Wilson pointed  to language on page  2 of the                                                                    
fiscal note  indicating that approximately $7  million would                                                                    
be appropriated to bring 170  schools up to 10 megabits. She                                                                    
did not  understand why 10  percent would be added  once the                                                                    
$7 million was paid. She  believed that $14 million would be                                                                    
what  the state  actually paid  for the  internet cost.  She                                                                    
wondered  why the  $7 million  would not  be taken  out once                                                                    
schools were brought up to the 10 megabit level.                                                                                
                                                                                                                                
Ms. Oliver  replied that it  would cost a certain  amount to                                                                    
elevate schools  to the 10  megabit level.  Currently school                                                                    
districts were  paying just under $10  million out-of-pocket                                                                    
for  their  non-discounted  share.  The  out-of-pocket  cost                                                                    
would increase  significantly if  the broadband  minimum was                                                                    
increased to the 10 megabits  per second level. She detailed                                                                    
that  it  would  cost  approximately  $7  million  to  bring                                                                    
schools with less  than 10 megabits per second  up to speed;                                                                    
the figure  would be added  to the  close to $10  million of                                                                    
out-of-pocket expenses currently  incurred by districts. She                                                                    
relayed that  in the  future the costs  would be  the higher                                                                    
dollar  amount; it  was  not possible  to  bring schools  up                                                                    
without  incurring future  costs.  She  likened the  ongoing                                                                    
broadband costs  to a utility.  She believed the  10 percent                                                                    
included  in the  fiscal note  represented  an estimate  for                                                                    
growth in future years.                                                                                                         
                                                                                                                                
2:20:54 PM                                                                                                                    
                                                                                                                                
Representative  Wilson understood  that it  would cost  more                                                                    
[in  the future].  She did  not understand  why there  would                                                                    
still  be a  cost of  $7 million  plus 10  percent after  $7                                                                    
million was funded.  She stated that the  item was currently                                                                    
included  in the  education formula.  She surmised  that the                                                                    
bill would  remove the  item from the  formula; most  of the                                                                    
items were currently paid by  school districts. She wondered                                                                    
why  the Lower  Kuskokwim district  was at  $19 million  and                                                                    
asked if  it was a good  example of what the  state could be                                                                    
looking at  for the 170  schools that were currently  not up                                                                    
to speed.                                                                                                                       
                                                                                                                                
Ms. Oliver replied that the  Lower Kuskokwim School District                                                                    
had voted  two years  earlier to significantly  increase its                                                                    
broadband connectivity  to 70 to  80 megabits per  second at                                                                    
its  22 village  sites. Most  other locations  were hovering                                                                    
around 10  or 15  megabits per  second. She  recognized that                                                                    
the  cost would  be more  on par  with how  much high  speed                                                                    
broadband  connectivity  would  cost in  rural  Alaska.  She                                                                    
clarified  that  the  funds  would not  be  used  to  create                                                                    
infrastructure  within  the   school  facilities;  it  would                                                                    
strictly be used for the monthly bandwidth cost.                                                                                
                                                                                                                                
Representative  Wilson   requested  a  breakout   of  school                                                                    
districts to determine costs in each location.                                                                                  
                                                                                                                                
2:23:30 PM                                                                                                                    
                                                                                                                                
Representative  Holmes  asked   if  the  capacity  currently                                                                    
existed to  get each of  the schools  up to 10  megabits per                                                                    
second. Ms.  Oliver replied that the  capacity was available                                                                    
in  some areas  but not  others. She  explained that  if the                                                                    
broadband cost  was paid  by the  state the  districts would                                                                    
have  freed-up  money  to improve  their  infrastructure  in                                                                    
order  to  utilize  the increased  bandwidth  if  it  became                                                                    
available.  She  detailed that  not  all  districts had  the                                                                    
infrastructure in  place to handle bandwidth  like the Yukon                                                                    
Kuskokwim district;  it would  require extra  electrical and                                                                    
different  routers. She  deduced that  school districts  had                                                                    
the  capacity for  10 megabits  per second,  but believed  a                                                                    
needs  assessment  should  be  done  to  determine  existing                                                                    
infrastructure.                                                                                                                 
                                                                                                                                
Representative Holmes  agreed that  research should  be done                                                                    
to determine existing capacity.  She shared the concern that                                                                    
once schools  were up to the  10 megabits per second  that a                                                                    
10 percent cost was added  annually. She worried that school                                                                    
districts  would  choose   to  upgrade  despite  potentially                                                                    
astronomical costs if the state  and federal government were                                                                    
picking up  all of the costs.  She did want to  work towards                                                                    
increasing  internet  access  across   the  state,  but  she                                                                    
believed the  cost-benefit analysis needed to  be taken into                                                                    
account.                                                                                                                        
                                                                                                                                
2:27:32 PM                                                                                                                    
                                                                                                                                
Co-Chair Austerman  recalled that a number  of years earlier                                                                    
when discussing  the Alaska Performance Scholarship  and the                                                                    
issue of equality  between rural and urban  schools that the                                                                    
DEED  commissioner  had  assured  that  broadband  would  be                                                                    
provided   to   rural    schools.   The   commissioner   had                                                                    
communicated  that the  broadband the  department would  pay                                                                    
for the broadband with reallocated assets.                                                                                      
                                                                                                                                
Representative  Nageak   pointed  to   a  letter   from  the                                                                    
superintendent of  the North  Slope Borough  School District                                                                    
(copy  on  file). He  read  the  second paragraph  from  the                                                                    
letter:                                                                                                                         
                                                                                                                                
     E-rate  provides federal  funding  for a  portion of  a                                                                    
     school  district's telecommunication  costs. Your  bill                                                                    
     will  provide state  funding for  the balance  of those                                                                    
     expenses   and  allow   districts  to   increase  their                                                                    
     bandwidth. This allows  those rural districts primarily                                                                    
     served   by  satellite   to   increase  the   bandwidth                                                                    
     available to students to 10  megabytes per second. This                                                                    
     is a very  basic level of service. The  capitol has 100                                                                    
     megabytes per  second service. Although basic,  it will                                                                    
     be  a  tenfold  increase  for  some  rural  schools  in                                                                    
     Alaska. Ten  megabytes will be three  times faster than                                                                    
     our  district's  current  service to  village  schools.                                                                    
     This is  a step in  the right direction to  address the                                                                    
     equity  issue  of  educational  opportunity  for  rural                                                                    
     students in Alaska.                                                                                                        
                                                                                                                                
Representative  Gara asked  if 10  megabits provided  enough                                                                    
bandwidth  to  offer  online live  video  streaming  between                                                                    
communities. Representative  Nageak replied that he  did not                                                                    
know.                                                                                                                           
                                                                                                                                
Ms. Thibodeau replied  that the OWL program  had brought 1.5                                                                    
megabits  per second  into the  public libraries,  which was                                                                    
the lowest bandwidth that  would support video conferencing.                                                                    
She  believed  that 10  megabits  per  second would  support                                                                    
video conferencing in distance classrooms.                                                                                      
                                                                                                                                
Representative  Costello asked  if  access  to internet  had                                                                    
improved school performance.  Representative Nageak answered                                                                    
that he did not know.                                                                                                           
                                                                                                                                
Representative Costello understood  that access to broadband                                                                    
in   rural  communities   was   valued   from  a   community                                                                    
development  standpoint. However,  she noted  that the  cost                                                                    
would  be approximately  $32  million in  FY  20, which  was                                                                    
close  to  the  amount  needed   for  a  $100  Base  Student                                                                    
Allocation  (BSA) increase.  She asked  if the  state valued                                                                    
more  teachers  in  its  classrooms  or  increased  internet                                                                    
access. She wanted to hear  from DEED about which option the                                                                    
state would choose if it was asked to pick between the two.                                                                     
                                                                                                                                
2:33:16 PM                                                                                                                    
                                                                                                                                
Representative Nageak  answered that  the current  world was                                                                    
very different  than it had  been in  the past. He  spoke to                                                                    
the use  of new technology  and provided a  personal example                                                                    
related  to  his  five-year-old granddaughter's  use  of  an                                                                    
iPad.  He  asked  the  committee  to  imagine  the  type  of                                                                    
learning that  could take  place with  increased technology;                                                                    
he believed every  student should have access  to the tools.                                                                    
He  believed that  rural Alaska  needed the  ability to  get                                                                    
information  to   the  students  through  the   schools.  He                                                                    
believed  the more  access to  learning would  be beneficial                                                                    
for education.                                                                                                                  
                                                                                                                                
Ms. Thibodeau provided examples of  items that were often no                                                                    
longer  available  in   print  including  encyclopedias  and                                                                    
college applications. She relayed  that there were many ways                                                                    
that the internet could assist students.                                                                                        
                                                                                                                                
2:36:23 PM                                                                                                                    
                                                                                                                                
PEGGY  COWAN,  SUPERINTENDENT,  NORTH SLOPE  BOROUGH  SCHOOL                                                                    
DISTRICT (via teleconference), introduced her colleague.                                                                        
                                                                                                                                
DEBBY  EDWARDSON,  PRESIDENT,  NORTH  SLOPE  BOROUGH  SCHOOL                                                                    
DISTRICT BOARD  OF EDUCATION (via teleconference),  spoke in                                                                    
support  of the  legislation  and thanked  the sponsor.  She                                                                    
read from a statement:                                                                                                          
                                                                                                                                
     HB 179 will provide state funding for the applicant's                                                                      
     share or the local share of the E-rate program. The E-                                                                     
     rate program  currently pays  60 to  90 percent  of all                                                                    
     internet  services in  public schools  or approximately                                                                    
     $55 million.  The applicant's share of  this program is                                                                    
     about  $14   million  based   on  estimates   from  the                                                                    
     Department of  Education. What this  means is  that the                                                                    
     return on the investment is about 4 to 1 on average.                                                                       
                                                                                                                                
Ms. Edwardson  believed the  [4 to 1]  return was  good. She                                                                    
surmised  that the  state  would look  favorably  on a  road                                                                    
project with a  federal match of $4 for every  state $1. She                                                                    
asked  committee  members  to  think  of  the  internet  and                                                                    
broadband  as  the  information highway  where  the  state's                                                                    
children could access  educational programming. She stressed                                                                    
that the internet was not a  teacher, but it was a tool that                                                                    
was  increasingly  used  by  young  people  nationwide.  She                                                                    
relayed that there  were certain things that  were no longer                                                                    
done outside of the  internet. She emphasized the importance                                                                    
of the  technology as  a tool in  the education  system. She                                                                    
communicated that  a key feature  of HB 179  allowed schools                                                                    
with  less than  10 megabits  per second  to increase  to 10                                                                    
megabits. She  shared that  seven of  the eight  North Slope                                                                    
Borough  schools  had  broadband   below  10  megabits;  the                                                                    
schools were all around 1.5 to 2.5 megabits per second.                                                                         
                                                                                                                                
Ms. Edwardson relayed  that on a statewide  basis about one-                                                                    
third of the state's public  schools were below 10 megabits.                                                                    
She  discussed  that DEED  had  projected  the costs  to  be                                                                    
around $7 million.  She asked the committee  to remember the                                                                    
return on investment; for $28  million in services the state                                                                    
would share approximately $7  million. She communicated that                                                                    
the statewide  broadband task-force had issued  a draft plan                                                                    
the prior  August; page  38 of the  report listed  the state                                                                    
funding options  (copy on file). One  of recommendations was                                                                    
a state grant program to reduce the local match in the E-                                                                       
rate  program. She  believed HB  179 addressed  many of  the                                                                    
recommendations  made by  the task-force  and that  it would                                                                    
increase educational  opportunities for all children  in the                                                                    
state.  She   reiterated  the  borough's  support   for  the                                                                    
legislation.  She  opined that  a  digital  divide would  be                                                                    
created if the issue was  not addressed. She pointed to many                                                                    
communities that did not have a video streaming option.                                                                         
                                                                                                                                
2:40:52 PM                                                                                                                    
                                                                                                                                
Ms.  Cowan  clarified that  the  1.5  megabytes would  allow                                                                    
video   conferencing   with   a  dedicated   server   on   a                                                                    
teleconference system;  it would  not allow  streaming video                                                                    
onto a  desktop computer. She appreciated  the complexity of                                                                    
the  broadband issue  and all  of the  components that  came                                                                    
along  with it;  she thanked  DEED and  the legislature  for                                                                    
helping  to navigate  the  complexity.  She emphasized  that                                                                    
students in rural Alaska were  at a disadvantage in the 21st                                                                    
century  without improved  broadband  access. She  addressed                                                                    
the 10 percent  increase and relayed that  students in urban                                                                    
Alaska could have better access;  the bill would allow urban                                                                    
districts to  increase and serve their  students better. She                                                                    
shared  that   15  districts   had  caucused   recently  and                                                                    
broadband  access   was  a   top  priority   discussed.  She                                                                    
communicated that  other states  provided funding  to school                                                                    
districts   for    help   with   items   such    as   cable,                                                                    
telecommunications,  and associated  processes. She  thanked                                                                    
the sponsor and committee for consideration of the bill.                                                                        
                                                                                                                                
2:43:42 PM                                                                                                                    
                                                                                                                                
Representative   Wilson  asked   how  many   megabytes  were                                                                    
available in  each of the  North Slope Borough  schools. Ms.                                                                    
Cowan  replied that  Barrow had  11.5 megabytes  per second.                                                                    
She  explained   that  the  seven  remaining   villages  had                                                                    
asymmetrical internet service of  2.5 megabytes down and 1.5                                                                    
megabytes up.                                                                                                                   
                                                                                                                                
Representative  Wilson  asked  other  public  testifiers  to                                                                    
provide the information as well.                                                                                                
                                                                                                                                
2:45:13 PM                                                                                                                    
                                                                                                                                
DAVID  NEES,  SELF,   ANCHORAGE  (via  teleconference),  had                                                                    
concerns with  the legislation. He  pointed to  disparity in                                                                    
money spent  on internet access.  He shared that  the amount                                                                    
the   Yukon-Kuskokwim  school   district  was   spending  on                                                                    
internet access was $4,880 per  student, which was only $600                                                                    
less than  what was provided  by the state for  basic needs.                                                                    
He stated that as soon as  the state moved to online testing                                                                    
the demand for increased  speed would rise substantially. He                                                                    
discussed  that the  costs [estimated  in  the fiscal  note]                                                                    
were  only for  an increase  to 10  [megabits]. He  believed                                                                    
DEED would  need 70 to  90 [megabits] for online  testing in                                                                    
2015.  He opined  that the  cost estimates  included in  the                                                                    
fiscal note were very loose.  He equated internet service to                                                                    
paying  rent. He  communicated that  telemedicine could  use                                                                    
all of the bandwidth with  one application if the access was                                                                    
shared. He stressed the need  to be careful because the cost                                                                    
was outside  the education formula  funding; because  it was                                                                    
outside the  formula it could be  open-ended and distributed                                                                    
unfairly.  He suggested  that  the fiber  optic  would be  a                                                                    
major player for connection. He  noted that 50 miles outside                                                                    
of  Seattle marked  the  end of  broadband  delivery in  the                                                                    
State  of Washington.  He  stressed  that broadband  dropped                                                                    
significantly outside large cities.                                                                                             
                                                                                                                                
Co-Chair Stoltze  thanked Mr.  Nees for  his service  on the                                                                    
bandwidth  task-force. He  recognized that  the fiscal  note                                                                    
was  large. He  relayed that  the  issue would  be held  and                                                                    
discussed as a part of the broader education package.                                                                           
                                                                                                                                
2:48:14 PM                                                                                                                    
                                                                                                                                
ED  GRAFF, SUPERINTENDENT,  ANCHORAGE  SCHOOL DISTRICT  (via                                                                    
teleconference),  supported  the  legislation.  He  believed                                                                    
driving  factors  for  increased bandwidth  speed  were  the                                                                    
state's requirement to provide  online tests to students and                                                                    
the data-driven  teacher development  accountability system.                                                                    
He  communicated  that  there was  a  potential  cloud-based                                                                    
software   solution  for   the  district   to  support   the                                                                    
initiative.  He noted  that  the  Anchorage School  District                                                                    
would have a need for  increased bandwidth. He mentioned the                                                                    
benefit  of  digital  learning  resources  to  students.  He                                                                    
discussed   education  with   district-owned  and   personal                                                                    
devices  in the  district's  schools. He  believed that  the                                                                    
legislation would be beneficial.                                                                                                
                                                                                                                                
Co-Chair Stoltze asked  if Mr. Graff was  speaking on behalf                                                                    
of  himself  or the  Anchorage  School  District. Mr.  Graff                                                                    
responded that  he was speaking  on behalf of  the Anchorage                                                                    
School District.                                                                                                                
                                                                                                                                
Representative Wilson asked  about current megabytes offered                                                                    
in the Anchorage school system.  Mr. Graff answered that the                                                                    
Anchorage   school  system   had  a   much  larger   megabit                                                                    
breakdown; the district  had a total of  700 megabits shared                                                                    
between its schools. He explained  that one school may use 2                                                                    
megabits while others  used up to 100 at  twenty-four of the                                                                    
district's  schools. Anchorage's  position  as  a metro  hub                                                                    
allowed  it  to  have  access   to  significant  usage.  The                                                                    
district currently paid approximately  $22,000 per month; 65                                                                    
percent  of the  figure  was  paid for  by  the E-rate.  The                                                                    
district  was proposing  to increase  its capacity  by seven                                                                    
times or 5 gigabits.                                                                                                            
                                                                                                                                
2:51:34 PM                                                                                                                    
                                                                                                                                
PETE  HOEPFNER, PRESIDENT,  CORDOVA  SCHOOL DISTRICT  SCHOOL                                                                    
BOARD  (via  teleconference),  testified  in  favor  of  the                                                                    
legislation and  thanked the  sponsor. He  communicated that                                                                    
the bill  would help all  school districts and  students. He                                                                    
stated that the bill would  enable school funding to be used                                                                    
for education  rather than for  the costs of  broadband. The                                                                    
legislation would  help bring Alaska children  into the 21st                                                                    
century  and would  help  them to  be  competitive with  all                                                                    
other  children  in  the  U.S. Cordova  currently  had  a  6                                                                    
megabyte service at a cost  above the E-rate of $14,000; the                                                                    
district  was   looking  to  increase  its   service  to  10                                                                    
megabytes  the   following  year,  which  would   bring  the                                                                    
district's cost to $20,000.                                                                                                     
                                                                                                                                
Co-Chair Stoltze  asked if the  costs were per month  or per                                                                    
year.  Mr. Hoepfner  replied  that the  costs  were for  one                                                                    
year. Increasing  broadband speed would enable  the district                                                                    
to stream  classes on  the internet.  He relayed  that small                                                                    
districts  wanted  their children  to  have  the ability  to                                                                    
apply  for  the   governor's  performance  scholarship;  the                                                                    
courses  needed for  a  student to  apply  had increased  in                                                                    
rigor. He stressed that small  districts could not offer all                                                                    
courses  necessary to  fulfill  the performance  scholarship                                                                    
eligibility  requirements.   The  solution  relied   on  the                                                                    
streaming of courses to the  rural districts, which required                                                                    
additional  bandwidth. He  emphasized  that internet  access                                                                    
helped increase  learning and knowledge. He  stated that the                                                                    
internet was  a huge resource  for students. He  thanked the                                                                    
committee for its time.                                                                                                         
                                                                                                                                
2:54:16 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze CLOSED public testimony.                                                                                       
                                                                                                                                
Ms. Thibodeau  stood corrected by  Ms. Cowan related  to the                                                                    
difference   between  dedicated   bandwidth  and   streaming                                                                    
internet.                                                                                                                       
                                                                                                                                
Representative Gara wondered if  the correction impacted the                                                                    
answer to a  question he had asked earlier.   He asked if 10                                                                    
megabits  would  allow  live video  streaming  from  another                                                                    
classroom.  Ms.  Thibodeau  replied that  according  to  Ms.                                                                    
Cowan  the increase  was not  sufficient for  streaming from                                                                    
classroom  to  classroom.  She clarified  that  her  earlier                                                                    
statement  had  related  only   to  dedicated  bandwidth  as                                                                    
opposed to shared bandwidth.                                                                                                    
                                                                                                                                
Representative Wilson relayed that  for years a subcommittee                                                                    
had been  asking whether schools  had enough  broadband, how                                                                    
much was  enough, and the  difference between  dedicated and                                                                    
shared services.  She relayed that the  task-force had heard                                                                    
that there  were districts that  did not believe  they would                                                                    
have  access   to  required  courses  for   the  performance                                                                    
scholarship.  She  acknowledged  that   the  price  tag  was                                                                    
significant.  She   recognized  that   some  of   the  small                                                                    
districts  did  not  have  a   teacher  for  every  subject;                                                                    
therefore,  other  means  were   required  for  students  to                                                                    
qualify for the scholarship. The  state had to determine how                                                                    
much it was  willing to pay and where  the education formula                                                                    
fit in. She  believed it was important to  hear from experts                                                                    
on broadband.                                                                                                                   
                                                                                                                                
Co-Chair Stoltze  spoke to innovation in  the Mat-Su Borough                                                                    
School  District and  recalled that  a prior  superintendent                                                                    
had put the optical wiring of  the school system as a higher                                                                    
priority than  the BSA. The  school had made  the investment                                                                    
and had provided other innovations.  He shared that the Mat-                                                                    
Su  School  District  had  made  the  choice  to  invest  in                                                                    
infrastructure and had not regretted it.                                                                                        
                                                                                                                                
2:58:06 PM                                                                                                                    
                                                                                                                                
Representative  Edgmon  referred  to  a prior  bill  he  had                                                                    
sponsored that  expanded the definition of  school districts                                                                    
to include  early learning  facilities in  the qualification                                                                    
for  E-rate  services. The  bill  had  passed; however,  the                                                                    
Universal  Services  Fund had  relayed  the  change was  not                                                                    
adequate.  For the  future he  asked for  a definition  of a                                                                    
school  district   in  order  to  know   if  early  learning                                                                    
facilities   would  be   included.  He   was  intrigued   by                                                                    
Representative Costello's  questions related  to quantifying                                                                    
the results  of having the services  available. He mentioned                                                                    
a  school   district  with  contracts  with   Brigham  Young                                                                    
University and other. He spoke  to the notion of putting $22                                                                    
million into  the K-12  formula. He  was interested  in more                                                                    
information on the issue related to values.                                                                                     
                                                                                                                                
Vice-Chair Neuman  pointed to the  cost of  telemedicine and                                                                    
pointed  to villages  that  did not  have  the resource.  He                                                                    
wondered whether there  was an opportunity to  have a shared                                                                    
system  program  to  expand broadband  where  there  was  an                                                                    
opportunity  for   telemedicine.  He   spoke  to   the  high                                                                    
transportation cost  when individuals had to  be transported                                                                    
from villages  to larger communities for  medical treatment.                                                                    
He wondered whether there was a savings potential.                                                                              
                                                                                                                                
Representative Nageak  believed it  could work.  He deferred                                                                    
the question  to the department. Ms.  Thibodeau replied that                                                                    
the issue would be tricky  because there were different pots                                                                    
of federal money involved.                                                                                                      
                                                                                                                                
Representative Nageak  addressed rural health. He  read from                                                                    
a statement:                                                                                                                    
                                                                                                                                
     Congress   mandated  discounted   services  for   rural                                                                    
     healthcare capped at  $400 million. Nonprofit providers                                                                    
     paid  no   more  than  their  urban   counterparts  for                                                                    
     telecommunication   services.   The  Rural   Healthcare                                                                    
     Division aims  to provide  support to  rural healthcare                                                                    
     providers  for telecommunications  services related  to                                                                    
     use of  telemedicine and  telehealth. In  addition, any                                                                    
     not-for-profit healthcare  provider whether in  a rural                                                                    
     or urban area qualifies  for internet access assistance                                                                    
     where  the organization  must  pay  total charges  long                                                                    
     distance  in  order  to   access  an  internet  service                                                                    
     provider.  In  this  case  a  healthcare  provider  may                                                                    
     qualify  to  receive  30  hours   or  $180  per  month,                                                                    
     whichever is  less, to pay  for the total  charges. All                                                                    
     of Alaska, outside of the  Anchorage area is classified                                                                    
     as rural for  the purposes of this program.  As you can                                                                    
     see from  Table 2,  during the  first year,  funds were                                                                    
     available   to  rural   healthcare  providers.   Alaska                                                                    
     providers received  $444,000, nearly 20 percent  of the                                                                    
     total   distributed    nationally.   Rural   healthcare                                                                    
     providers  in  House  election  district  37  including                                                                    
     providers  in  Ambler,   Buckland,  Deering,  Kivalina,                                                                    
     Kobuk,  Kiana, Kotzebue,  Noatak, Noorvik,  Point Hope,                                                                    
     Selawik, and  Shungnak, received  nearly 43  percent of                                                                    
     the amount or $188,000.                                                                                                    
                                                                                                                                
Vice-Chair   Neuman   spoke    to   areas   with   developed                                                                    
infrastructure  such  as  telemedicine  areas.  He  wondered                                                                    
where bandwidth  could be expanded  to the schools  in those                                                                    
areas. He surmised  that it may not be possible  to make the                                                                    
change all at once, but that  it could be possible to create                                                                    
change a bit at a time.                                                                                                         
                                                                                                                                
Representative Nageak would look into the issue.                                                                                
                                                                                                                                
3:04:33 PM                                                                                                                    
                                                                                                                                
Representative   Guttenberg   appreciated  the   bill   that                                                                    
demonstrated disparity  around the  state. He referred  to a                                                                    
research report published  in 2000 and noted  that even when                                                                    
it had been current it had  been outdated. He had never paid                                                                    
less  than 5  times  the amount  listed at  the  top of  the                                                                    
report   for   minimal   services.  He   communicated   that                                                                    
legislative    committees   had    repeatedly   asked    the                                                                    
administration  for information  on  the  "big picture."  He                                                                    
noted that some  companies had major fiber  optics plans for                                                                    
Alaska. He  stated that there  were other nations  that were                                                                    
far ahead of  the U.S. on broadband that paid  a fraction of                                                                    
the  costs  paid by  Alaska.  He  addressed  a cost  of  $55                                                                    
million for  school districts alone.  He believed  the state                                                                    
could  negotiate a  better  cost if  it  added together  the                                                                    
costs spent by schools,  local governments, and departments.                                                                    
He wished the administration would address the issue.                                                                           
                                                                                                                                
Representative  Gara appreciated  the bill.  He agreed  that                                                                    
the committee  had not received answers  when the discussion                                                                    
had occurred  related to the Alaska  Performance Scholarship                                                                    
in  the past.  He spoke  to items  he believed  were missing                                                                    
from the discussion. He wanted  to move ahead with broadband                                                                    
expansion as quickly as possible,  but currently much of the                                                                    
broadband in  rural Alaska was accessed  by satellite, which                                                                    
was very  expensive. There were projects  coming through the                                                                    
state in the next few years  that would bring the ability to                                                                    
provide broadband  through fiber  optics and  possibly other                                                                    
cable.  He  discussed the  ability  to  expand internet  and                                                                    
broadband through  cable, which was much  less expensive. As                                                                    
a statewide  plan was developed  he wanted to hear  from the                                                                    
administration on how  the issue could be dealt  with in the                                                                    
most efficient and cost-effective way.                                                                                          
                                                                                                                                
3:08:49 PM                                                                                                                    
                                                                                                                                
Representative Nageak  shared a personal example  related to                                                                    
overuse  charges on  broadband. He  believed the  costs were                                                                    
horrendous,  but it  was a  cost  of doing  business in  the                                                                    
state. He  stated that  costs needed to  be reduced,  but in                                                                    
the  meantime demands  needed to  be met.  He believed  help                                                                    
from the state system was needed.                                                                                               
                                                                                                                                
Co-Chair Stoltze asked for comments from DEED.                                                                                  
                                                                                                                                
LES MORSE, DEPUTY COMMISSIONER,  DEPARTMENT OF EDUCATION AND                                                                    
EARLY DEVELOPMENT, remarked that  there were things that the                                                                    
internet  could  bring  and  access  it  could  provide.  He                                                                    
referred to  the comments related to  the Alaska Performance                                                                    
Scholarship  and  opined  that   there  were  ways  to  meet                                                                    
scholarship  requirements regardless  of broadband,  but the                                                                    
issue was more  about the quality. He discussed  that it was                                                                    
possible to take  correspondence online or with  paper and a                                                                    
pencil; the  quality level  would be  different. He  was not                                                                    
advocating for or  against the approach proposed  in HB 179.                                                                    
He  believed a  policy  discussion would  need  to occur  on                                                                    
policy  choices that  needed to  be  made in  relation to  a                                                                    
targeted assistance or  through the BSA. He  did not believe                                                                    
that everything could be done.  He believed it was important                                                                    
to consider all options.                                                                                                        
                                                                                                                                
Co-Chair Stoltze  asked if the  legislature was  jumping the                                                                    
gun on a  digital initiative when the framework  was not set                                                                    
for broadband  and other access.  Mr. Morse did  not believe                                                                    
so. He  elaborated that the digital  initiative stepped into                                                                    
the issue slowly;  it included three pilot  districts in the                                                                    
upcoming  year  and five  the  following  year. The  program                                                                    
would  then  bring information  back  to  the department  on                                                                    
whether efforts were successful.  He believed the initiative                                                                    
fit in  well at a point  when the legislature was  trying to                                                                    
make decisions on the issue using a cost-benefit analysis.                                                                      
                                                                                                                                
Representative Wilson  asked if there was  data showing that                                                                    
the governor's digital initiative  would have better results                                                                    
than   the  one-on-one   initiative.   She  wondered   about                                                                    
information  showing which  program would  provide the  most                                                                    
cost-effective strategy.                                                                                                        
                                                                                                                                
3:13:12 PM                                                                                                                    
                                                                                                                                
Mr.  Morse did  not have  the data  on hand.  The department                                                                    
would   bring  any   related  data   to   the  DEED   budget                                                                    
subcommittee meeting later in the day.                                                                                          
                                                                                                                                
Representative  Wilson discussed  that  money was  requested                                                                    
for a significant number of  programs. She remarked that she                                                                    
was not trying to  say the bill was a bad  idea, but she did                                                                    
not know  if it  was a  good idea.  She furthered  that both                                                                    
broadband and teachers could bring  good things to students;                                                                    
however, she was uncertain  a calculus correspondence course                                                                    
would work  for all  individuals. She stressed  that answers                                                                    
would  not   be  available  until  data   was  collected  to                                                                    
determine  how  to  spend  money in  the  right  areas.  She                                                                    
invited  members  to  attend the  DEED  budget  subcommittee                                                                    
meeting that evening for more detail.                                                                                           
                                                                                                                                
Representative Costello was unsure  that putting the onus on                                                                    
the  state  and  tying  increased broadband  to  the  school                                                                    
system was  the right  course of action  given the  need for                                                                    
broadband in other areas such  as community development. Her                                                                    
vision for education in rural  areas included the concept of                                                                    
regional hubs  where the  best access  could be  provided to                                                                    
students.  She  discussed the  idea  of  a school-year  with                                                                    
three  sections  that would  enable  students  to return  to                                                                    
their  villages  for  a  different  type  of  learning.  She                                                                    
discussed  helping teachers  to  transition  into the  rural                                                                    
lifestyle  in  Alaska. She  asked  whether  the Division  of                                                                    
Teaching  and Learning  Support  helped  teachers to  design                                                                    
lesson plans that tapped into internet resources.                                                                               
                                                                                                                                
Mr.   Morse  replied   that  DEED   frequently  used   video                                                                    
conferencing for  district trainings. The  department's role                                                                    
was  to   help  districts  to  provide   support  for  their                                                                    
teachers. The  department did reference resources  that were                                                                    
available on  the internet. He  summarized that DEED  used a                                                                    
mix of platforms.                                                                                                               
                                                                                                                                
Representative  Costello had  seen research  indicating that                                                                    
schools  with  a  full-time librarian  performed  better  on                                                                    
tests. She had  visited libraries in her  district where the                                                                    
librarian had  asked for digital resources.  She wondered if                                                                    
it  more  valuable  to have  resources  provided  to  school                                                                    
libraries  versus individual  school  classrooms. Mr.  Morse                                                                    
replied that  it depended on  the structure of  the learning                                                                    
environment.  He believed  that in  some cases  it may  make                                                                    
more sense  to centralize the  resources and in  other cases                                                                    
it may not. He had worked as  a teacher and in some cases it                                                                    
made  more sense  to decentralize,  but it  depended on  the                                                                    
structure of the  program and school. Many  of the decisions                                                                    
were made at  the local district and school  level. He would                                                                    
want the  structure to fit  best within a  school's learning                                                                    
environment.                                                                                                                    
                                                                                                                                
Representative Costello agreed.  She believed everyone would                                                                    
like to  see the local  districts and teachers  getting what                                                                    
they needed.  She had  heard that  the funding  source would                                                                    
prevent helping  districts in creative and  innovative ways.                                                                    
She hoped  that however  the legislature moved  forward that                                                                    
student performance would be improved.                                                                                          
                                                                                                                                
3:19:08 PM                                                                                                                    
                                                                                                                                
Representative  Edgmon referred  to the  Lake and  Peninsula                                                                    
School  District  and  shared  that  its  distance  learning                                                                    
programs had  helped its schools  to better  meet curriculum                                                                    
requirements.  He had  been  told  that overall  performance                                                                    
measures had  improved at  the schools.  He wondered  how it                                                                    
would be  possible to quantify  something that seemed  to be                                                                    
more qualitative  in nature. He discussed  stretching the K-                                                                    
12 dollar in  rural school districts that  were suffering as                                                                    
a result of  high costs. He wondered what data  meant to the                                                                    
department.                                                                                                                     
                                                                                                                                
Mr.  Morse  answered  that the  Lake  and  Peninsula  School                                                                    
District had  a strong  record of showing  some improvement.                                                                    
He added that the district had  small sites and would not be                                                                    
surprised that  gains would  be seen  if the  district found                                                                    
ways  to  maximize  the  use   of  technology  and  distance                                                                    
teaching. He believed it would  take significant study given                                                                    
that it  would be important  to study larger groups  and the                                                                    
issue  over  time.  He remarked  that  when  studying  small                                                                    
groups it was difficult to  attribute what had resulted in a                                                                    
change.  In  the  specific  scenario it  would  be  hard  to                                                                    
determine  whether  a  change   was  a  result  of  distance                                                                    
education  or  a  dynamic  teacher.   He  relayed  that  the                                                                    
department looked at  achievement gains, but it  was hard to                                                                    
determine   what  to   attribute   the   gains  to   without                                                                    
qualitative research efforts.                                                                                                   
                                                                                                                                
3:22:45 PM                                                                                                                    
                                                                                                                                
Representative Edgmon observed  that it was early  on in the                                                                    
digital era  in terms of providing  educational services. He                                                                    
questioned whether  programs had been around  long enough to                                                                    
enable  a decent  trend analysis.  He  addressed an  earlier                                                                    
question  about  values  and where  the  dollar  was  better                                                                    
applied.  He wondered  how the  determination would  be made                                                                    
with what was known today.                                                                                                      
                                                                                                                                
Mr.  Morse responded  that  research-based programs  existed                                                                    
that provided evidence of their  success. The department had                                                                    
not studied all of the programs  in rural Alaska and did not                                                                    
have  the numbers  to conduct  adequate  research. He  noted                                                                    
that there were research-based  technology programs that did                                                                    
work;  there  was  published   research  available  for  the                                                                    
department to access.                                                                                                           
                                                                                                                                
Representative  Munoz   pointed  to  the   Digital  Learning                                                                    
Initiative that would begin a  pilot program in three school                                                                    
districts. She wondered if the  department had looked at the                                                                    
current   broadband  capacity   for  the   three  districts.                                                                    
Additionally,  she  wondered  whether  the  capacity  was  a                                                                    
factor in  determining which  districts participated  in the                                                                    
pilot  program. Mr.  Morse answered  that the  districts had                                                                    
not  yet  been  selected.  He affirmed  that  the  broadband                                                                    
connectivity  would be  a factor  in  the determination.  He                                                                    
added that it was necessary  to consider where the broadcast                                                                    
was coming  from and  where it  was going;  the goal  was to                                                                    
reach beyond any one district's boundaries.                                                                                     
                                                                                                                                
3:25:13 PM                                                                                                                    
                                                                                                                                
Representative Munoz asked if part  of the proposal would be                                                                    
to  help  the  chosen   districts  to  reach  the  broadband                                                                    
capacity  needed to  participate in  the program.  Mr. Morse                                                                    
replied  that part  of  the process  was  to identify  where                                                                    
things were working, to make  enhancements to those areas to                                                                    
increase success, and  how to expand the  successes to other                                                                    
locations. He  elaborated that the other  locations could be                                                                    
areas to  broadcast from  or to broadcast  to a  wider area.                                                                    
The  idea of  the  initiative was  to  advance the  learning                                                                    
around the work in order to  maximize it across the state in                                                                    
the long-term.                                                                                                                  
                                                                                                                                
Representative Munoz  asked if the initiative  would include                                                                    
a proposal to  help communities come up to  speed with their                                                                    
broadband  capacity.  Alternatively,  she  wondered  if  the                                                                    
responsibility would be up to the community or district.                                                                        
                                                                                                                                
Mr. Morse did  not believe that the  broadband component was                                                                    
part   of  the   initiative.  The   initiative  focused   on                                                                    
infrastructure and  professional skills required  to provide                                                                    
distance delivery as opposed to the broadband subscription.                                                                     
                                                                                                                                
Representative Gara surmised that  the administration had no                                                                    
comprehensive policy  to implement broadband statewide  in a                                                                    
cost-effective way.  He mentioned options such  as providing                                                                    
broadband by  satellite or cable.  He was concerned  about a                                                                    
statement  that  had  been made  related  to  broadband  and                                                                    
teachers. He hoped  the department did not mean  to say that                                                                    
the choice would be between  more teacher cuts or broadband.                                                                    
He  was not  interested in  another  year of  staff cuts  in                                                                    
schools.                                                                                                                        
                                                                                                                                
Mr.  Morse  replied  that  at   the  end  of  the  day  much                                                                    
discussion would be  needed to figure out  choices that were                                                                    
made.  One of  the choices  could be  a BSA;  the BSA  would                                                                    
offer a choice for districts  to make decisions about how to                                                                    
spend money. He remarked that  the bill contained a targeted                                                                    
resource  to  address  a  problem  or  issue  statewide.  He                                                                    
clarified that he  had not mentioned teachers in  any of his                                                                    
comments. He  relayed that there was  a broadband task-force                                                                    
led by  the Department  of Commerce, Community  and Economic                                                                    
Development;  it  had  done   broad  research  on  statewide                                                                    
broadband.  The  task-force   currently  had  a  preliminary                                                                    
report. He noted that it may  be worth the time to study the                                                                    
work done  by the task-force.  He added  that he was  not an                                                                    
expert on the subject.                                                                                                          
                                                                                                                                
Co-Chair Stoltze  relayed that there would  be communication                                                                    
with the DEED subcommittee chair.  He remarked that the bill                                                                    
preceded   the  introduction   of  the   governor's  omnibus                                                                    
education  legislation. He  communicated that  broadband had                                                                    
been  discussed at  almost  every  subcommittee meeting.  He                                                                    
knew that Representative Wilson would  take the issue to the                                                                    
task  force. He  had heard  more about  the broadband  issue                                                                    
than the  digital initiative.  He wondered  if the  cart was                                                                    
being put  before the horse.  He appreciated  the discussion                                                                    
initiated by the legislation. He believed it was important                                                                      
to deal with the issue at hand alongside other education                                                                        
issues.                                                                                                                         
                                                                                                                                
HB 179 was HEARD and HELD in committee for further                                                                              
consideration.                                                                                                                  
                                                                                                                                
Co-Chair Stoltze discussed future schedules.                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
3:32:10 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 3:32 p.m.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
HB 231 DNR Email-Brand Books.pdf HFIN 2/13/2014 1:30:00 PM
HB 231
Research-Cattle Branding.pdf HFIN 2/13/2014 1:30:00 PM
HB 231
Sponsor Statement-HB 231.pdf HFIN 2/13/2014 1:30:00 PM
HB 231
HB 179 bill_packet ADN Article.pdf HFIN 2/13/2014 1:30:00 PM
HB 179
HB 179 Explanation of Changes.pdf HFIN 2/13/2014 1:30:00 PM
HB 179
HB 179 FY2012 Total Broadband Cost E-Rate share and Applicant Share.pdf HFIN 2/13/2014 1:30:00 PM
HB 179
HB 179 Letters of Support.PDF HFIN 2/13/2014 1:30:00 PM
HB 179
HB 179 Sectional_Analysis.pdf HFIN 2/13/2014 1:30:00 PM
HB 179
HB 179 Sponsor Statement H FIN.pdf HFIN 2/13/2014 1:30:00 PM
HB 179
HB179_Erate brief.pdf HFIN 2/13/2014 1:30:00 PM
HB 179
HB179_LegislativeResearch_Erate section.pdf HFIN 2/13/2014 1:30:00 PM
HB 179
HB 179 2013-08-AK-Broadband-Task-Force-Report_A-Blueprint-for-Alaska's-Broadband-Future.pdf HFIN 2/13/2014 1:30:00 PM
HB 179
HB 179 DEED FiscalNote Updated 2014.pdf HFIN 2/13/2014 1:30:00 PM
HB 179