Legislature(2013 - 2014)HOUSE FINANCE 519

03/17/2014 01:30 PM FINANCE


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01:33:52 PM Start
01:33:59 PM HB278
03:14:24 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 278 EDUCATION: FUNDING/TAX CREDITS/PROGRAMS TELECONFERENCED
Heard & Held
+= HB 220 REPEAL SECONDARY SCHOOL EXIT EXAM TELECONFERENCED
Scheduled But Not Heard
+ HB 291 STIPEND FOR BOARDING SCHOOLS TELECONFERENCED
Scheduled But Not Heard
+= HB 150 TECHNICAL/VOCATIONAL EDUCATION PROGRAM TELECONFERENCED
Scheduled But Not Heard
+= HB 179 BROADBAND DISCOUNTS FOR SCHOOLS TELECONFERENCED
Scheduled But Not Heard
+ - Bills Relating to Governor's Education Omnibus TELECONFERENCED
Bill
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                      March 17, 2014                                                                                            
                         1:33 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:33:52 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stoltze called the House Finance Committee meeting                                                                     
to order at 1:33 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   Lynn   Gattis,   Chair,   House   Education                                                                    
Committee;  Michael  Hanley,   Commissioner,  Department  of                                                                    
Education    and   Early    Development;   Angela    Rodell,                                                                    
Commissioner,   Department   of   Revenue;   Diane   Blumer,                                                                    
Commissioner,    Department   of    Labor   and    Workforce                                                                    
Development.                                                                                                                    
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 150    TECHNICAL/VOCATIONAL EDUCATION PROGRAM                                                                                
                                                                                                                                
          HB 150 was SCHEDULED but not HEARD.                                                                                   
                                                                                                                                
HB 179    BROADBAND DISCOUNTS FOR SCHOOLS                                                                                       
                                                                                                                                
                                                                                                                                
HB 220    REPEAL SECONDARY SCHOOL EXIT EXAM                                                                                     
                                                                                                                                
          HB 220 was SCHEDULED but not HEARD.                                                                                   
                                                                                                                                
HB 278    EDUCATION: FUNDING/TAX CREDITS/PROGRAMS                                                                               
                                                                                                                                
          HB 278 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
HB 291    STIPEND FOR BOARDING SCHOOLS                                                                                          
                                                                                                                                
          HB 291 was SCHEDULED but not HEARD.                                                                                   
                                                                                                                                
HOUSE BILL NO. 278                                                                                                            
                                                                                                                                
     "An Act increasing the base  student allocation used in                                                                    
     the  formula for  state  funding  of public  education;                                                                    
     repealing the secondary  student competency examination                                                                    
     and  related  requirements;  relating  to  high  school                                                                    
     course credit earned through  assessment; relating to a                                                                    
     college and  career readiness assessment  for secondary                                                                    
     students;  relating   to  charter   school  application                                                                    
     appeals  and program  budgets; relating  to residential                                                                    
     school   applications;  increasing   the  stipend   for                                                                    
     boarding   school   students;  extending   unemployment                                                                    
     contributions for  the Alaska technical  and vocational                                                                    
     education  program;  relating  to earning  high  school                                                                    
     credit for  completion of vocational  education courses                                                                    
     offered   by  institutions   receiving  technical   and                                                                    
     vocational  education  program   funding;  relating  to                                                                    
     education  tax credits;  making conforming  amendments;                                                                    
     and providing for an effective date."                                                                                      
                                                                                                                                
1:33:59 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze discussed the omnibus education bill and                                                                       
the intent of the meeting.                                                                                                      
                                                                                                                                
Representative Costello moved the House Education Committee                                                                     
bill version before the committee.                                                                                              
                                                                                                                                
REPRESENTATIVE   LYNN   GATTIS,   CHAIR,   HOUSE   EDUCATION                                                                    
COMMITTEE, read from a prepared statement pertaining to HB                                                                      
278:                                                                                                                            
     The  Governor's  Education  bill  came to  us  in  late                                                                    
     January and  we immediately  began hearing it  in House                                                                    
     Education.   Recognizing  that   the   bill  had   many                                                                    
     different  aspects  related  to education  in  it,  the                                                                    
     Committee determined very early  on that the bill would                                                                    
     need to be broken down  into its various components and                                                                    
     heard in segments.                                                                                                         
                                                                                                                                
     We identified at least ten  different components of the                                                                    
     bill  and  though some  of  them  overlapped, we  spent                                                                    
     several weeks  hearing the bill by  the various topics.                                                                    
     We  had several  presentations from  DEED and  from the                                                                    
     DLWD.  We   heard  several   hours'  worth   of  expert                                                                    
     testimony  and   even  more  hours'  worth   of  public                                                                    
     testimony.                                                                                                                 
                                                                                                                                
     Last week  we began the arduous  but thoughtful process                                                                    
     of presenting our amendments.  The Committee dealt with                                                                    
     two  dozen  amendments and  the  result  of those  that                                                                    
     passed is in front of you in CSHB 278, version N.                                                                          
                                                                                                                                
     To begin with,  there are some changes  in this version                                                                    
     of the bill that are  the work of the Legislative Legal                                                                    
     department  simply  for  clean   -  up  and  conformity                                                                    
     purposes. But  the bulk  of the work  is the  result of                                                                    
     the  Committee's work,  so here  is a  summary of  that                                                                    
     activity by the topical components.                                                                                        
                                                                                                                                
     Section  1  is the  High  school  course credit  earned                                                                    
     through assessment.   The Governor's bill  provided for                                                                    
     "testing out"  for students who could  prove mastery of                                                                    
     a subject  through an assessment rather  than having to                                                                    
     do required  "seat time" in  a classroom and  thereby a                                                                    
     student  can  receive credit  for  that  course if  the                                                                    
     established  "mastery"  or   proficiency  rate  on  the                                                                    
     assessment is reached.                                                                                                     
                                                                                                                                
     The  House Education  Committee amended  the bill  with                                                                    
     language similar  to HB  190 -  which provides  for the                                                                    
     development  of  more  course assessments  to  be  made                                                                    
     available  to students  other than  just those  courses                                                                    
     that are  required courses for meeting  the criteria of                                                                    
     the Alaska Performance Scholarship Program.                                                                                
                                                                                                                                
     Sections  2,  3,  and  4.   These  sections  deal  with                                                                    
     eliminating the  requirement for passing the  HSGQE and                                                                    
     the  Committee  amended  out any  requirement  for  the                                                                    
     state to  pay for  a student  to take  a post-secondary                                                                    
     test  such as  the ACT,  SAT or  WorkKeys. The  current                                                                    
     requirement from the State Board  of Education for high                                                                    
     school  Juniors  to take  the  Work  Keys test  is  not                                                                    
     impacted  by  this   potential  change.  The  Committee                                                                    
     amended   in  the   requirement  for   determining  and                                                                    
     reporting on  the number, the attendance  rates and the                                                                    
     performance of  students whose parents are  active duty                                                                    
     military.  The   effective  date  for   the  transition                                                                    
     regarding  these sections  was  amended  from June  30,                                                                    
     2017 to June 30, 2015.                                                                                                     
                                                                                                                                
1:38:55 PM                                                                                                                    
                                                                                                                                
Representative Gattis continued to address the legislation                                                                      
in a prepared statement:                                                                                                        
                                                                                                                                
     Section 5  begins the sections  that deal  with charter                                                                    
     school  applications, appeals  and programs.  The first                                                                    
     segment regarding  charter schools  was amended  to add                                                                    
     language allowing  the State  Board of Education  to be                                                                    
     an alternative  authorizer of a charter  school. Though                                                                    
     the bill's  initial language states that  a denial from                                                                    
     a  local  district  for a  charter  school  application                                                                    
     could be  appealed to the  Commissioner and  then could                                                                    
     be approved by the  Commissioner, the Committee amended                                                                    
     that  portion   to  state  that  the   State  Board  of                                                                    
     Education could become  the charter school's chartering                                                                    
     and operating  authority so a charter  school would not                                                                    
     have to try to operate  within a hostile environment of                                                                    
     a  district that  initially  denied  it. The  amendment                                                                    
     however, does  provide for giving the  local district a                                                                    
     chance  to  appeal  and  request  that  it  become  the                                                                    
     operating authority.  This section  was also amended by                                                                    
     the Committee  to limit the  length of time by  which a                                                                    
     local  board had  to make  its decision  to approve  or                                                                    
     deny to 60 days.                                                                                                           
                                                                                                                                
     If  you move  onto Section  8, you  will see  where the                                                                    
     Committee amended  that section  to add that  a charter                                                                    
     has  the   right  of  first  refusal   for  leasing  of                                                                    
     available space of school  district facilities and that                                                                    
     the district can charge a  reasonable fee that reflects                                                                    
     the true operational costs of that facility.                                                                               
                                                                                                                                
     Section 9 limits the amount  that a district can charge                                                                    
     in indirect cost fees to 4%.                                                                                               
                                                                                                                                
     Skipping  onto  Section  12;  it  was  amended  by  the                                                                    
     Committee  to require  that school  districts formulate                                                                    
     policies  and thoughtfully  address the  transportation                                                                    
     challenges   of   their    charter   school   students.                                                                    
     Districts   would   be    charged   with   coordinating                                                                    
     transportation  routes and  transportation availability                                                                    
     as best  they can  within their  current transportation                                                                    
     plan in order to  provide transportation where and when                                                                    
     feasible. If  not, the districts  will have  to forfeit                                                                    
     the portion of their  transportation funds generated by                                                                    
     the  number of  students attending  the charter  school                                                                    
     and hand that money over to the charter school.                                                                            
                                                                                                                                
1:41:26 PM                                                                                                                    
                                                                                                                                
Representative  Gattis  spoke  to  the  component  requiring                                                                    
districts  to forfeit  the portion  of their  transportation                                                                    
funds  generated by  the number  of  students attending  the                                                                    
charter  school; districts  would  be required  to hand  the                                                                    
money  over  to the  charter  school.  She had  offered  the                                                                    
provision as an amendment  in the House Education Committee;                                                                    
it had passed unanimously. The  intent was not to change the                                                                    
existing  transportation system,  but  to  require buses  to                                                                    
pick up and  drop off charter school students  if there were                                                                    
open seats.                                                                                                                     
                                                                                                                                
Co-Chair Stoltze  remarked that the amendment  became easier                                                                    
once people had understood  that charter schools were public                                                                    
schools.                                                                                                                        
                                                                                                                                
Representative  Gattis replied  that  the issue  had been  a                                                                    
topic  of  lengthy  conversation. She  discussed  that  many                                                                    
people did  not understand  how charter schools  were funded                                                                    
given  that some  had been  implemented as  experimental and                                                                    
processed through  as private-type programs. She  spoke to a                                                                    
lack of  understanding about where charter  schools paid and                                                                    
where  inequities existed.  She  believed  the governor  had                                                                    
recognized  the  issues and  that  charter  schools were  an                                                                    
opportunity to compete  on a local level,  offered parents a                                                                    
choice,  and complimented  the existing  educational system.                                                                    
She pointed  to the success of  charter schools demonstrated                                                                    
by their long waiting lists.                                                                                                    
                                                                                                                                
Representative  Gattis  continued  reading from  a  prepared                                                                    
statement:                                                                                                                      
                                                                                                                                
     It  does  not  require  the  district  to  specifically                                                                    
     provide transportation  for students  but they  do have                                                                    
     to allow  charter school students to  take advantage of                                                                    
     normal bus routes whenever reasonably possible.                                                                            
                                                                                                                                
     In Section 13,  the end of that section  was amended to                                                                    
     allow  for bonding  by a  municipality  or borough  for                                                                    
     construction,   additions   and  major   rehabilitation                                                                    
     projects  for charter  schools. This  will allow  for a                                                                    
     70% debt reimbursement of bonds for charter schools.                                                                       
                                                                                                                                
     Though it  seems a little  out of order Section  17 was                                                                    
     added  in to  decrease the  minimum number  of students                                                                    
     required  for  establishing  the  funding  rate  for  a                                                                    
     charter  school  within  its  first  three  years,  and                                                                    
     allowing the  adjusted student count  to be  counted at                                                                    
     the same rate as for 150 students.                                                                                         
                                                                                                                                
     Looking  back at  Sections 15  and  16, the  Governor's                                                                    
     bill provided  for an improved application  process for                                                                    
     creating new  residential schools  and for  an increase                                                                    
     in the  stipend to  more accurately reflect  the actual                                                                    
     audited  costs  of  boarding school  students  and  the                                                                    
     House Education Committee simply  amended Section 37 to                                                                    
     provide  for   an  effective  date  of   July  1,  2014                                                                    
     replacing the Governor's date of Sept. 1st.                                                                                
                                                                                                                                
Representative Gattis explained that  the effective date had                                                                    
been changed  to July 1,  2014 given that school  would have                                                                    
already  started  by the  September  1  date that  had  been                                                                    
included in the governor's bill version.                                                                                        
                                                                                                                                
1:44:36 PM                                                                                                                    
                                                                                                                                
Representative Gattis continued reading from a statement:                                                                       
                                                                                                                                
     Sections  18, 19  and  20 deal  with  the Base  Student                                                                    
     Allocation  increases. The  committee  did not  address                                                                    
     the component of  the bill that deals with  the BSA but                                                                    
     decided  from  the beginning  that  that  was an  issue                                                                    
     better  discussed in  HOUSE  FINANCE  so the  Committee                                                                    
     passed that portion unamended.                                                                                             
                                                                                                                                
     Section   21,   Technical  and   Vocational   Education                                                                    
     Programs  (TVEP);  the   percentages  for  the  funding                                                                    
     allocation  were  amended  in   order  to  add  another                                                                    
     program to the  list of supported programs. The  U of A                                                                    
     percentage  was  decreased  to  42%  and  the  Southern                                                                    
     Southeast Alaska  Technical Education Center  was added                                                                    
     at 3%.                                                                                                                     
                                                                                                                                
Co-Chair Stoltze interjected that the section would be up                                                                       
for discussion.                                                                                                                 
                                                                                                                                
Representative Gattis agreed. She resumed reading beginning                                                                     
with Section 22:                                                                                                                
                                                                                                                                
     Section   22  was   amended  to   add  more   reporting                                                                    
     requirements  to  verify  the  performance  results  of                                                                    
     those programs.                                                                                                            
                                                                                                                                
     Moving on  to Section 25  and the Tax  Credit component                                                                    
     of the  Governor's bill - this  section further defines                                                                    
     the items that can be  identified as costs, and added a                                                                    
     tax  credit for  contributions made  to early  learning                                                                    
     and  childhood development  programs  to include  those                                                                    
     provided by a for-profit  corporation. This section was                                                                    
     also amended  to clarify that  this tax  credit applies                                                                    
     to  those  contributing  to post-secondary  schools  or                                                                    
     institutions  within  the   state,  not  outside.  That                                                                    
     language is  repeated in Sections  26, 28, 29,  31, 32,                                                                    
     34 and 35.                                                                                                                 
                                                                                                                                
     Section 37  repeals Section 3,  ch. 91, SLA  2010 which                                                                    
     will remove the sunset date  and that will allow Alaska                                                                    
     to  continue  to  seek  federal  grants  for  providing                                                                    
     start-up funds for new charter schools.                                                                                    
                                                                                                                                
     The amendments  made by  the House  Education Committee                                                                    
     make our  charter school  environment even  stronger in                                                                    
     the state  of Alaska,  they further  reduce unnecessary                                                                    
     testing  requirements  in  our   state  and  the  costs                                                                    
     associated  with  testing  and improve  incentives  for                                                                    
     corporations   and   organizations   to   support   our                                                                    
     vocational     opportunities    and     the    learning                                                                    
     opportunities of our  youngest students. The amendments                                                                    
     will  more effectively  support the  Governor's efforts                                                                    
     to improve our education system in our state.                                                                              
                                                                                                                                
Co-Chair Stoltze asked about Section  38. He referred to two                                                                    
"repealers." Representative  Gattis believed there  may have                                                                    
been a TVEP sunset included.  She was unsure what Section 38                                                                    
encompassed.                                                                                                                    
                                                                                                                                
Co-Chair Stoltze  commented that  repealers were  often more                                                                    
powerful than other more descriptive language.                                                                                  
                                                                                                                                
Co-Chair  Austerman asked  Representative Gattis  to provide                                                                    
her  written  comments   to  the  committee.  Representative                                                                    
Gattis agreed to provide her remarks.                                                                                           
                                                                                                                                
1:48:36 PM                                                                                                                    
                                                                                                                                
MICHAEL  HANLEY, COMMISSIONER,  DEPARTMENT OF  EDUCATION AND                                                                    
EARLY DEVELOPMENT,  clarified that  Section 38 was  the only                                                                    
location the High School  Graduation Qualifying Exam (HSGQE)                                                                    
was  repealed.  He  expressed   intent  to  highlight  items                                                                    
differing from the governor's original bill.                                                                                    
                                                                                                                                
Co-Chair Stoltze asked Commissioner  Hanley to make comments                                                                    
on  changes made  in the  House Education  Committee and  to                                                                    
address  the department's  aspirations for  the legislation.                                                                    
Commissioner  Hanley  relayed  that   some  of  the  changes                                                                    
brought  a different  perspective,  but did  not change  the                                                                    
governor's intent.                                                                                                              
                                                                                                                                
Co-Chair Stoltze  asked Commissioner  Hanley to  outline the                                                                    
governor's  goals,  objectives,  and hopes  related  to  the                                                                    
various elements of the bill.                                                                                                   
                                                                                                                                
Commissioner  Hanley shared  that ultimately  the governor's                                                                    
goal  was  to  reform  education largely  by  examining  the                                                                    
current system,  cleaning things up, removing  barriers, and                                                                    
incorporating  an  increase in  the  BSA.  He addressed  the                                                                    
secondary school  course credit where students  were allowed                                                                    
to test out. He detailed  that the House Education Committee                                                                    
had  aligned the  bill with  HB 190  [a bill  introduced the                                                                    
prior year]; HB 190 allowed  school districts to provide the                                                                    
opportunity  for  students  to  test out;  whereas,  HB  278                                                                    
identified  specific  courses  including  reading,  writing,                                                                    
math,  social studies,  science,  and  world languages.  The                                                                    
specificity  recognized   the  burden  the   development  of                                                                    
assessments was  on school districts  and that  some courses                                                                    
were  experiential  in nature  and  did  not naturally  lend                                                                    
themselves to  an end of  course exam (e.g.  drama, pottery,                                                                    
or debate).                                                                                                                     
                                                                                                                                
Commissioner Hanley  discussed that  the idea was  to remove                                                                    
the a high  stakes exam that a student was  required to pass                                                                    
and to provide  a choice of assessments a  student could use                                                                    
towards  their  next  step out  of  high  school.  Currently                                                                    
WorkKeys was required  in 11th grade. The idea  was to allow                                                                    
students to  have a  choice; if the  student knew  they were                                                                    
going to  college they could choose  to take the SAT  or ACT                                                                    
instead  of  WorkKeys. Under  the  CS  before the  committee                                                                    
WorkKeys was  required, but  the option to  take the  SAT or                                                                    
ACT was not.                                                                                                                    
                                                                                                                                
Co-Chair Stoltze  remarked that  there had  been significant                                                                    
input  on  Common  Core. He  asked  Commissioner  Hanley  to                                                                    
provide the  administration's position on the  topic and any                                                                    
Common Core elements in the legislation.                                                                                        
                                                                                                                                
1:54:18 PM                                                                                                                    
                                                                                                                                
Commissioner Hanley  relayed that Common  Core was a  set of                                                                    
academic  standards adopted  by  numerous  districts in  the                                                                    
nation   in  recognition   that  many   students  were   not                                                                    
adequately  prepared   when  leaving  high   school.  Alaska                                                                    
districts  had similar  standards;  therefore, its  students                                                                    
would be competitive. However, the  bill contained no Common                                                                    
Core components.  Alaska adopted new academic  standards for                                                                    
students in  June 2012; districts had  been implementing the                                                                    
new standards  for the past 1.5  to 2 years. He  stated that                                                                    
there was  no connection  between the  policies in  the bill                                                                    
and the  academic standards. He  addressed a  component that                                                                    
increased the  boarding stipend  for residential  schools to                                                                    
recognize  the true  cost; the  component also  required the                                                                    
Department  of Education  and  Early  Development (DEED)  to                                                                    
hold an  annual open application  period. There had  been an                                                                    
open  application  period  one  year  earlier;  subsequently                                                                    
there  were some  "great"  new schools.  He  noted that  the                                                                    
commissioner's approval was not required.                                                                                       
                                                                                                                                
Commissioner  Hanley explained  that  the governor's  vision                                                                    
was to remove  some barriers that made  starting new charter                                                                    
schools  challenging.  The  key  component  to  the  charter                                                                    
school  application required  an  academic policy  committee                                                                    
(comprised of parents) to apply  with its local school board                                                                    
to start a charter school.  The school board response had to                                                                    
be  in writing  based on  fact  and conclusions  of law.  He                                                                    
stressed  that  the  requirement brought  integrity  to  the                                                                    
local  process.  In  cases  of  denial  an  academic  policy                                                                    
committee   could   appeal    to   the   commissioner.   The                                                                    
commissioner had the  ability to remand the  denial back for                                                                    
further consideration, to confirm  the denial, or to suggest                                                                    
an approval;  ultimately the decision  would continue  to go                                                                    
to the  state board.  One of  the House  Education Committee                                                                    
amendments outlined  that in  order for  the state  board to                                                                    
overturn  a local  school  district  they would  essentially                                                                    
start   a  new   school  district;   the  fiscal   note  was                                                                    
indeterminate given  that the number  of future  denials was                                                                    
unknown.  Under  the scenario  a  new  charter school  would                                                                    
become its  own school  district (similar to  Mt. Edgecumbe)                                                                    
with its  own superintendent and  teachers who would  all be                                                                    
state employees.  There would be  a significant  fiscal note                                                                    
for the  state to start  one of  the new schools.  He stated                                                                    
that the  idea of using the  state board of education  as an                                                                    
additional authorizer had  some unintended consequences that                                                                    
would bring a significant fiscal note to the state.                                                                             
                                                                                                                                
1:58:10 PM                                                                                                                    
                                                                                                                                
Commissioner Hanley discussed the  tax credits that had been                                                                    
included; the CS  included an amendment that  added a credit                                                                    
for  early   education  and  the  governor   had  added  two                                                                    
additional tax credits. One credit  aimed to defray costs of                                                                    
students  who  are  taking dual  credits  (i.e.  course  and                                                                    
registration  fees)  and   allowed  for  transportation  and                                                                    
potentially  room  and  board.  The credit  would  apply  to                                                                    
programs such  as the Alaska Native  Science and Engineering                                                                    
Program  or the  Rural Alaska  Honors Institute  that helped                                                                    
students  get college  and high  school  credits during  the                                                                    
summer. The second  credit added by the  governor would help                                                                    
provide   funding  for   the   maintenance,  operation,   or                                                                    
construction  of a  dorm facility  for one  of the  approved                                                                    
residential schools.  The funding was  currently unavailable                                                                    
through   the   capital   improvement  projects   or   major                                                                    
maintenance process.                                                                                                            
                                                                                                                                
ANGELA   RODELL,   COMMISSIONER,  DEPARTMENT   OF   REVENUE,                                                                    
addressed the tax credits component  of the legislation. She                                                                    
noted that  the education tax  credit cap of $5  million per                                                                    
tax payer  had not changed.  Additional uses had  been added                                                                    
related to what would qualify  for the education tax credit.                                                                    
She  spoke   to  the   importance  of   encouraging  private                                                                    
investment into  the state's education system  and to create                                                                    
opportunities for  partnership with the private  sector. She                                                                    
believed the  amendments expanding the education  tax credit                                                                    
were  important  to   increase  opportunities  for  students                                                                    
across the  state of Alaska.  Additionally, she  believed it                                                                    
was  important  that  the additions  did  not  increase  the                                                                    
overall tax credit claim above the $5 million cap.                                                                              
                                                                                                                                
2:01:13 PM                                                                                                                    
                                                                                                                                
DIANE   BLUMER,  COMMISSIONER,   DEPARTMENT  OF   LABOR  AND                                                                    
WORKFORCE DEVELOPMENT,  spoke to  the TVEP  program section.                                                                    
She  communicated  that  the   program  provided  funds  for                                                                    
statewide job institutions. She  relayed that the governor's                                                                    
primary  focus  had  been to  recognize  the  importance  of                                                                    
career and technical  education and to provide  for a bridge                                                                    
or partnership  with local or distance  high schools through                                                                    
the process.  The process included  the identification  of a                                                                    
requirement of an articulated  agreement with the vocational                                                                    
technology  programs,  high  schools,  and  universities.  A                                                                    
component  was added  to  make  reporting requirements  more                                                                    
stringent  and enforceable  by the  Department of  Labor and                                                                    
Workforce  Development   (DLWD).  The   amendments  required                                                                    
financial information  to be provided  to DLWD in  order for                                                                    
the  legislature to  determine  if  the performance  measure                                                                    
outcomes were  meeting the designated  mark. She  noted that                                                                    
there had been one change made to the formula funding.                                                                          
                                                                                                                                
Commissioner  Hanley pointed  to  a  section regarding  bond                                                                    
reimbursements for charter schools.  The state reimbursed at                                                                    
a  70  percent rate.  He  explained  that restrictions  were                                                                    
largely square  footage related and qualification  was based                                                                    
on the  number of students  in a school  district; districts                                                                    
qualified for  construction of a certain  square footage. He                                                                    
detailed  that  a  60 percent  reimbursement  rate  did  not                                                                    
include  square footage  requirements.  The component  would                                                                    
allow a  70 percent/30 percent (70/30)  reimbursement of the                                                                    
bonds without  the space requirements; therefore,  space and                                                                    
structures  could be  increased in  school districts  with a                                                                    
higher reimbursement rate.                                                                                                      
                                                                                                                                
Co-Chair Stoltze  asked if the  provision was 70  percent or                                                                    
up to 70 percent. Commissioner  Hanley replied that the rate                                                                    
would  be 70/30  even though  only the  requirements of  the                                                                    
60/40 rate were met.                                                                                                            
                                                                                                                                
Co-Chair Stoltze thought  the issue should be  looked at. He                                                                    
wanted charter  schools to be  treated fairly, but  not more                                                                    
fairly.                                                                                                                         
                                                                                                                                
2:04:23 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg wondered  if  the charter  school                                                                    
application process  including denials and appeals  were set                                                                    
in   statute.  He   gathered   from  Commissioner   Hanley's                                                                    
statement that  sometimes school  districts did  not provide                                                                    
timely  responses   to  applications.   Commissioner  Hanley                                                                    
answered  that  there  was no  appeal  process  at  present.                                                                    
Currently the process  came to a stop if  an application was                                                                    
denied for  any reason. The  idea of the  proposed provision                                                                    
would  be  to  provide  a  second  set  of  eyes  to  review                                                                    
applications.                                                                                                                   
                                                                                                                                
Representative  Guttenberg asked  if the  reason for  denial                                                                    
was currently delineated in statute.  He asked about reasons                                                                    
for  reconsideration   of  a  denial.   Commissioner  Hanley                                                                    
replied  that  currently a  denial  could  be made  for  any                                                                    
reason based on fact and conclusions of law.                                                                                    
                                                                                                                                
Co-Chair  Austerman asked  about Section  13 related  to the                                                                    
70/30 provision.  He wondered why  a sunset had  been added.                                                                    
Commissioner Hanley did  not believe there was  a new sunset                                                                    
related to the 70/30 provision.                                                                                                 
                                                                                                                                
Co-Chair  Austerman pointed  to a  letter from  DEED to  the                                                                    
House  Finance  Committee  related  to  a  summary  of  bill                                                                    
changes dated March  14, 2014 (copy on file).  He pointed to                                                                    
the July  1, 2014 through  December 31, 2017  dates included                                                                    
in  the  letter.  Commissioner   Hanley  answered  that  the                                                                    
program would be three years  because the provision allowing                                                                    
a school  to qualify for  the 70/30 reimbursement  when they                                                                    
only met  the 60/40  requirements was new.  He noted  that a                                                                    
sunset had not previously been  in place. He could not speak                                                                    
to the reason the sunset had been proposed.                                                                                     
                                                                                                                                
2:08:00 PM                                                                                                                    
                                                                                                                                
Representative  Thompson spoke  to  the 70/30  reimbursement                                                                    
provision. He  wondered why the size  and building standards                                                                    
would be different from those  currently in place for public                                                                    
school buildings.                                                                                                               
                                                                                                                                
Co-Chair  Stoltze  noted that  the  provision  had not  been                                                                    
inserted by DEED. He asked  Representative Gattis to respond                                                                    
to the question.                                                                                                                
                                                                                                                                
Representative    Thompson    reiterated    his    question.                                                                    
Representative  Gattis answered  that she  did not  recall a                                                                    
discussion  about the  same size  standard for  neighborhood                                                                    
and charter schools. The bigger  conversation had been about                                                                    
charter schools  being responsible for the  leasing of their                                                                    
own property, paying  for property tax, and to  use the same                                                                    
funding as neighborhood  schools that did not  have the same                                                                    
responsibility.  She  referred  to charter  schools  in  her                                                                    
district  that  were leasing  space  and  were not  able  to                                                                    
purchase or participate in a  bonding program. She explained                                                                    
that  they  did  not  have the  opportunity  if  the  school                                                                    
district  did  not put  them  forward.  The provision  would                                                                    
enable  charter   schools  to  ask  for   bonding  from  the                                                                    
municipality.                                                                                                                   
                                                                                                                                
Representative  Thompson wondered  about building  standards                                                                    
currently  in  place for  public  schools.  He mentioned  R-                                                                    
values of walls  and ceilings. He could not find  any of the                                                                    
detail under the charter school provisions.                                                                                     
                                                                                                                                
2:10:30 PM                                                                                                                    
                                                                                                                                
Representative Gattis responded that  the specific issue had                                                                    
not come up in the  House Education Committee deliberations.                                                                    
She  believed  it had  been  assumed  that the  same  school                                                                    
intent  should  apply  to  charter   schools  as  well.  She                                                                    
communicated that  the committee had spent  significant time                                                                    
talking  about  parity  and  equity;  that  charter  schools                                                                    
should   be   provided    with   the   same   opportunities.                                                                    
Representative  Kito had  offered the  amendment related  to                                                                    
the  inequity. She  reiterated that  most  of the  committee                                                                    
assumed  it  was  covered  in   what  was  already  done  in                                                                    
neighborhood schools.                                                                                                           
                                                                                                                                
Co-Chair Stoltze remarked  that the issue may  be subject to                                                                    
refinement. He  surmised that  if the  goal was  parity that                                                                    
the  provision  may  make charter  schools  more  equal.  He                                                                    
believed  the intent  was to  have the  schools on  the same                                                                    
level playing field. He noted  that the committee could work                                                                    
on  the  provision   related  to  Representative  Thompson's                                                                    
questions.                                                                                                                      
                                                                                                                                
Representative Thompson  asked why the SAT,  ACT, and career                                                                    
readiness  assessment  exams  had   been  removed  from  the                                                                    
legislation. Commissioner Hanley replied  that the items had                                                                    
been removed by the House Education Committee.                                                                                  
                                                                                                                                
Representative  Gattis answered  that the  amendment sponsor                                                                    
in the House Education  Committee thought it was appropriate                                                                    
to remove the college  and career readiness verbiage because                                                                    
the language was used in  Common Core standards. The ACT and                                                                    
SAT  had been  removed, but  because WorkKeys  fell under  a                                                                    
different bill  it had  not been  removed. She  believed the                                                                    
intent had  been to remove  all three,  but it had  not been                                                                    
done. She believed the issue  was more about the college and                                                                    
career readiness  verbiage and had  less to do with  the ACT                                                                    
and SAT  (except for  the fact that  the tests  were aligned                                                                    
with the Common Core).                                                                                                          
                                                                                                                                
2:13:32 PM                                                                                                                    
                                                                                                                                
Representative  Edgmon  asked   whether  residential  school                                                                    
stipends  were  the same  as  boarding  school stipends.  He                                                                    
wondered whether  stipends included  in the  bill recognized                                                                    
1st through  8th grades.  Commissioner Hanley  answered that                                                                    
the terms  residential and boarding were  used synonymously.                                                                    
He detailed  that residential schools  were for  high school                                                                    
students only.                                                                                                                  
                                                                                                                                
Representative  Wilson  asked what  data  had  been used  to                                                                    
determine how to approach the  goal of increasing graduation                                                                    
rates and  other. She wondered  why the solutions in  the CS                                                                    
been chosen  versus others. She questioned  how to determine                                                                    
whether the solutions  would work. She opined  that the bill                                                                    
represented a significant amount of money.                                                                                      
                                                                                                                                
Commissioner Hanley  replied that  he did not  believe there                                                                    
was a focus  on new programs, but on  current activities and                                                                    
artificial  barriers that  were in  place. The  goal was  to                                                                    
remove  some of  the  barriers and  to  increase equity  for                                                                    
charter  schools.  The  provision would  provide  an  annual                                                                    
period where  charter schools could apply  to be residential                                                                    
schools.  The components  with  positive  fiscal notes  were                                                                    
primarily related  to the BSA  and the increase  in boarding                                                                    
stipends for  residential schools. The HSGQE  had a negative                                                                    
fiscal note  and other items  did not have a  fiscal impact.                                                                    
The idea  was to provide improvements  to current practices.                                                                    
The  bill included  additional  tax  credits to  incentivize                                                                    
private/public partnerships.                                                                                                    
                                                                                                                                
Representative  Wilson  wondered   how  the  department  had                                                                    
identified specific  programs and what  data it had  used to                                                                    
determine that the programs  were working. Additionally, she                                                                    
wondered   how  the   department  had   determined  expected                                                                    
outcomes  that  would  occur  based   on  the  reduction  of                                                                    
barriers.                                                                                                                       
                                                                                                                                
2:17:16 PM                                                                                                                    
                                                                                                                                
Commissioner   Hanley  replied   that  the   bill  was   not                                                                    
comprehensive to  everything that  the department  could do;                                                                    
however,  it  did address  some  items  that could  be  done                                                                    
relatively easily due to  built-in barriers. Bill components                                                                    
provided  students with  increased opportunity  by providing                                                                    
them with the  ability to test out of classes  and to choose                                                                    
the  SAT or  ACT.  He  elaborated that  there  was not  data                                                                    
comparing a student  taking the SAT or  ACT versus WorkKeys,                                                                    
but he believed there was  recognition that not all students                                                                    
need  WorkKeys.  Some students  had  a  vision for  college;                                                                    
therefore,  the tools  they would  use would  be the  SAT or                                                                    
ACT.  Clear  data  around  removing   barriers  may  not  be                                                                    
available, but he believed the proposals made sense.                                                                            
                                                                                                                                
Representative Wilson spoke to  her concern. She wondered if                                                                    
charter and  boarding schools took  students away,  but left                                                                    
traditional public schools with  the same costs. She thought                                                                    
the schools  would need  more money per  student due  to the                                                                    
fewer number. She spoke about  her district and that charter                                                                    
schools  provided  opportunity  for  a  few,  but  that  the                                                                    
district continued  to have the  same number of  schools and                                                                    
bus  routes  with  fewer  students.   She  was  not  against                                                                    
providing the  opportunity, but she was  trying to determine                                                                    
how the cost would work  as more opportunities were created.                                                                    
She  wondered how  to  know whether  a  boarding school  was                                                                    
successful. She  opined that testing  out of a  class should                                                                    
require the  same test across  school districts.  She stated                                                                    
that the  bill included significant costs  to districts. She                                                                    
clarified that whether  or not the state  adopted the Common                                                                    
Core  standards  the  standards   would  enter  the  state's                                                                    
schools in  curriculum because  curriculum would  be written                                                                    
for the  majority of  states that  did adopt  the standards.                                                                    
She stressed  that the  state did not  need to  adopt Common                                                                    
Core to utilize it.                                                                                                             
                                                                                                                                
2:20:50 PM                                                                                                                    
                                                                                                                                
Commissioner  Hanley replied  that  districts  were able  to                                                                    
address  their  need  to  expand  as a  part  of  their  own                                                                    
districts. He stated that he had  taken the SAT and ACT when                                                                    
he was  in high school,  but the  Common Core had  only been                                                                    
around for  a few years. He  found it strange to  equate the                                                                    
exams with  Common Core.  The addition of  the exams  in the                                                                    
bill was  recognition that colleges used  them for entrance.                                                                    
He  believed additional  charter  schools and  opportunities                                                                    
for  residential schools  increased opportunity  in response                                                                    
to local-level needs.                                                                                                           
                                                                                                                                
Co-Chair Stoltze believed there  had been concern related to                                                                    
Common Core because the administration  had come out against                                                                    
the  standards, but  then appeared  to include  some in  the                                                                    
legislation.  He  opined  that the  administration  had  had                                                                    
challenges presenting its vision on the topic.                                                                                  
                                                                                                                                
Representative Gara  asked if any  of the provisions  in the                                                                    
bill  took funding  away  from the  BSA  received by  school                                                                    
districts  for  non-charter   schools.  Commissioner  Hanley                                                                    
replied in the negative.                                                                                                        
                                                                                                                                
Representative Gara asked  if DEED had studied  what BSA was                                                                    
needed by school  districts in order to avoid  a fourth year                                                                    
of cuts.                                                                                                                        
                                                                                                                                
Commissioner  Hanley  replied  that   he  had  provided  the                                                                    
information to Representative Gara's  office. He stated that                                                                    
no two districts  had the same number.  He hypothesized that                                                                    
one  district may  need an  increase of  $110 while  another                                                                    
district may need an increase  of $150. He explained that an                                                                    
average would  be erroneous. He communicated  that there was                                                                    
no  good  number. He  elaborated  that  if he  had  provided                                                                    
Representative Gara with a number  in the past that it would                                                                    
be  wrong at  present  because districts  had changed  their                                                                    
numbers. He  communicated that in his  ongoing conversations                                                                    
with districts, numbers tended to  be between $100 and $200;                                                                    
a few  districts had communicated  the need for  an increase                                                                    
above $200. He had not had  any districts speak to him about                                                                    
a  $400  increase.  He  reiterated   that  the  numbers  had                                                                    
continued to change in  ongoing conversations; therefore, it                                                                    
was  impossible  to  provide  a  number  reflective  of  all                                                                    
districts statewide.                                                                                                            
                                                                                                                                
Representative Gara  wondered what various  school districts                                                                    
needed. He noted  that the Juneau School  District needed an                                                                    
increase of over $400. He added  that there were a number of                                                                    
other  schools  in  the  same situation.  He  pointed  to  a                                                                    
provision that  would allow a charter  school application to                                                                    
be  appealed to  the DEED  commissioner  in the  event of  a                                                                    
denial. He asked  about the standards that would  be used by                                                                    
the commissioner in order to make a decision on the appeal.                                                                     
                                                                                                                                
2:25:01 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze asked about the current standards.                                                                             
                                                                                                                                
Representative Gara asked about  the standards that would be                                                                    
used by the commissioner in order  to make a decision on the                                                                    
appeal. He wondered if there  were current standards for the                                                                    
denial or acceptance of a charter school application.                                                                           
                                                                                                                                
Commissioner  Hanley replied  that  there  was currently  no                                                                    
appeal process; therefore there  were no standards listed in                                                                    
statute  or regulation.  The standards  were  listed in  the                                                                    
legislation. The  conclusions of  law and statement  of fact                                                                    
coming  from the  local school  district would  be the  same                                                                    
criteria that  would appear  before the  commissioner. There                                                                    
was no  additional language on  what the  commissioner would                                                                    
do to address the appeal.                                                                                                       
                                                                                                                                
Representative Gara  believed the  removal of the  HSGQE had                                                                    
support by  much of the  legislature. He opined that  it was                                                                    
time for  the test to  go. He  did not want  to discriminate                                                                    
against students in the past  who had completed course work,                                                                    
but had not  passed the exam. He wondered if  the bill would                                                                    
grant a high  school diploma to students who  had received a                                                                    
certificate of completion in the past.                                                                                          
                                                                                                                                
Commissioner  Hanley replied  that  under  the current  bill                                                                    
version  students graduating  up  to 2014  were required  to                                                                    
have passed the exam. The  governor had included three years                                                                    
of transitional  language in  the bill  to allow  adults who                                                                    
had  left with  a  certificate of  achievement  to pass  the                                                                    
HSGQE to  receive their diploma.  The bill had  been amended                                                                    
from three years (to match HB 220) to one year.                                                                                 
                                                                                                                                
Co-Chair  Stoltze  remarked  that  it  was  the  committee's                                                                    
intent to report out HB 220 prior to reporting out HB 278.                                                                      
                                                                                                                                
Representative  Gara  believed   prior  students  should  be                                                                    
treated the same as future students.                                                                                            
                                                                                                                                
Representative  Gattis clarified  that there  had been  much                                                                    
discussion related to the appeal  process for charter school                                                                    
applications.  She  explained  that  the  DEED  commissioner                                                                    
would  have criteria  that the  charter schools  would write                                                                    
to; it would not be an arbitrary process.                                                                                       
                                                                                                                                
2:28:56 PM                                                                                                                    
                                                                                                                                
Representative  Gara pointed  to  Sections 6  and  7 of  the                                                                    
legislation related  to the appeal  process. He did  not see                                                                    
standards or the  authority for the commissioner  to come up                                                                    
with standards.                                                                                                                 
                                                                                                                                
Co-Chair Stoltze noted that the  committee would work on the                                                                    
section if it needed refining.                                                                                                  
                                                                                                                                
Commissioner Hanley  noted that there was  no objection from                                                                    
the governor's  office or  the administration  to clarifying                                                                    
what the  authority for the  DEED commissioner  looked like.                                                                    
He added that it was necessary  to look beyond his tenure as                                                                    
commissioner. The authority could  be outlined in regulation                                                                    
or statute.                                                                                                                     
                                                                                                                                
Representative  Costello  asked   about  the  transportation                                                                    
element  of the  bill in  relation to  lottery schools.  She                                                                    
listed  various  programs  including the  Russian,  Spanish,                                                                    
Japanese immersion programs, and  the Denali Montessori. She                                                                    
explained   that  the   lottery  schools   were  housed   in                                                                    
neighborhood schools.  Currently the BSA  and transportation                                                                    
funding was going  to the school, but there  were parents of                                                                    
students driving across town.                                                                                                   
                                                                                                                                
Commissioner Hanley  replied that current statute  said that                                                                    
charter schools  shall have a  budget that reflects  no less                                                                    
than  the amount  generated by  those students  in the  same                                                                    
manner as  other schools  in the  school district.  The idea                                                                    
was equity;  that students attending charter  schools should                                                                    
have some  access to  transportation. The  language included                                                                    
by the  governor specified  that transportation  funding was                                                                    
generated  by   student  for   the  special   education  and                                                                    
vocational technical education components  as well. He noted                                                                    
that the  formula was different.  The addition did  not mean                                                                    
that transportation  would be  provided to  individual homes                                                                    
around  a  district,  but  it could  mean  that  there  were                                                                    
designated drop off/pick up spots.  He believed there should                                                                    
be a conversation about  transportation. He appreciated that                                                                    
the  House  Education  Committee had  clarified  that  there                                                                    
should be  a conversation about providing  transportation at                                                                    
least to a minimal extent.                                                                                                      
                                                                                                                                
2:31:52 PM                                                                                                                    
                                                                                                                                
Representative  Gattis elaborated  that charter  schools had                                                                    
experienced  difficulty speaking  to their  school districts                                                                    
about  the transportation  of  students.  The bill  language                                                                    
would force  the school district  to have  the conversation.                                                                    
She asked about the definition of a lottery school.                                                                             
                                                                                                                                
Representative Costello replied  that that parents lotteried                                                                    
into  the public  school that  housed an  additional program                                                                    
(e.g.  Russian, Spanish,  Japanese  immersion programs,  and                                                                    
the Denali Montessori); there was  a blend of a neighborhood                                                                    
school  that  had  busing   for  neighborhood  students  and                                                                    
families  outside of  the district  that had  to drive.  She                                                                    
noted that the  challenge was no different  from that facing                                                                    
charter  schools related  to transportation.  She asked  for                                                                    
verification  that lottery  schools had  not been  discussed                                                                    
during  the  House  Education   Committee  meetings  on  the                                                                    
legislation.                                                                                                                    
                                                                                                                                
2:33:41 PM                                                                                                                    
                                                                                                                                
Representative  Gattis   replied  that  the   term  "lottery                                                                    
school"  had  never  been  discussed.  She  noted  that  the                                                                    
schools were referred to as  "mission schools" in the Mat-Su                                                                    
district. She  verified that the  same concern  existed. The                                                                    
committee had not discussed the  issue. She believed that if                                                                    
lottery,  mission,  or  boundary  exempt  schools  had  been                                                                    
discussed that they  would have fallen in  the same category                                                                    
as charter  schools in relation to  transportation; students                                                                    
should have the opportunity to ride  on a school bus if they                                                                    
were on the bus route and room was available.                                                                                   
                                                                                                                                
Representative  Costello   asked  if  there  had   been  any                                                                    
discussion  about  exempting  charter  schools  from  paying                                                                    
property  taxes   if  they  were  leasing   their  facility.                                                                    
Commissioner Hanley  replied in the negative.  He elaborated                                                                    
that local property tax was a local decision.                                                                                   
                                                                                                                                
Co-Chair  Austerman asked  about Section  13 related  to the                                                                    
70/30  provision.  He  wondered about  the  House  Education                                                                    
Committee's decision  to include  a sunset date  of December                                                                    
31,  2017.  He  thought  that under  the  provision  charter                                                                    
schools would return to the 60/40 like all other schools.                                                                       
                                                                                                                                
Representative Gattis  replied that  the dates had  not been                                                                    
discussed  in   her  committee.   She  expounded   that  the                                                                    
discussion  had focused  on the  70/30 split  for a  charter                                                                    
schools. She thought the dates may have come from DEED.                                                                         
                                                                                                                                
2:36:21 PM                                                                                                                    
                                                                                                                                
Co-Chair Austerman noted that  charter schools currently had                                                                    
a 60/40 split. He wondered  if the schools could qualify for                                                                    
the  70/30  split.  Commissioner  Hanley  replied  that  any                                                                    
school  district school  could qualify  for either  based on                                                                    
the square  footage requirements of the  district; typically                                                                    
a   school  district   was  at   the   maximum  with   their                                                                    
neighborhood schools.  A charter  school could qualify  if a                                                                    
district chose to put the issue before its voters.                                                                              
                                                                                                                                
Co-Chair  Austerman  surmised  that  the  provision  allowed                                                                    
charter  schools  to  receive  the  70/30  reimbursement  on                                                                    
construction  for three  years  regardless  of the  existing                                                                    
60/40 and  70/30 requirements. Commissioner  Hanley believed                                                                    
that  had been  the  intent; charter  schools  would have  a                                                                    
lesser  requirement  to  receive  the  higher  reimbursement                                                                    
rate.                                                                                                                           
                                                                                                                                
Co-Chair Austerman wondered whether  a sunset applied to any                                                                    
of  the tax  credits. Representative  Gattis responded  that                                                                    
the House  Education Committee had limited  discussion about                                                                    
the tax  credits and their  effect given the  bill's finance                                                                    
referral.  The  committee  had given  thought  to  what  tax                                                                    
credits  could and  could not  do,  but there  had not  been                                                                    
discussion on finances or sunsets.                                                                                              
                                                                                                                                
2:38:19 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Neuman  spoke to  Section  18  of the  bill.  He                                                                    
pointed to the summary of  changes that included the removal                                                                    
of sideboards related to space  requirements for the current                                                                    
debt  reimbursement  program.   He  discussed  Susitna  High                                                                    
School  related   to  average   daily  membership   and  the                                                                    
different  costs  and  size  requirements  for  courses.  He                                                                    
wondered if the bill  removed all building size requirements                                                                    
based  on school  population. He  wondered if  schools would                                                                    
have the ability to build a school of any size.                                                                                 
                                                                                                                                
Commissioner  Hanley replied  in the  affirmative. Currently                                                                    
if a  district wanted to  add a facility they  qualified for                                                                    
the  60/40  reimbursement  without space  requirements.  The                                                                    
bill would  allow charter schools  to do the same,  but with                                                                    
the 70 percent reimbursement.                                                                                                   
                                                                                                                                
Vice-Chair  Neuman  referred  to  page 2  of  the  bill.  He                                                                    
discussed  the application  for  dual credits  for TVEP  and                                                                    
other  similar  programs.  He   recalled  a  requirement  to                                                                    
maintain a certain grade point  average (GPA) to receive the                                                                    
credits. He  wondered if there were  any existing sideboards                                                                    
on the amount  of funds available for  students. He wondered                                                                    
about any GPA requirements.  He referred to secondary school                                                                    
credits  and asked  if there  were ways  to define  required                                                                    
standards for students.                                                                                                         
                                                                                                                                
Commissioner Hanley  replied in the negative.  The provision                                                                    
related to  testing out of  a course currently offered  by a                                                                    
school.  For   example,  he  discussed  whether   a  Spanish                                                                    
speaking student could test out  of and receive credit for a                                                                    
Spanish  1 course.  The  local  district already  determined                                                                    
what it took to receive a  credit either through a test or a                                                                    
course.                                                                                                                         
                                                                                                                                
Vice-Chair  Neuman  pointed  to  pages  18  through  20.  He                                                                    
discussed  the funding  of scholarships  awarded  by a  non-                                                                    
profit organization  to a dual  credit student.  He wondered                                                                    
if the  provision allowed students to  receive dual credits.                                                                    
He thought the provision tied into TVEP funds.                                                                                  
                                                                                                                                
Commissioner Hanley responded that  the component related to                                                                    
tax  credits and  was not  directly connected  to TVEP.  The                                                                    
provision  recognized that  dual credit  students often  had                                                                    
costs  at the  university level  (e.g. registration,  course                                                                    
and  lab fees,  transportation, and  other) and  that a  tax                                                                    
credit  could be  offered to  corporation helping  to defray                                                                    
the costs.  The TVEP components  in the bill stated  that an                                                                    
entity receiving TVEP money needed  to offer dual credit and                                                                    
needed to have an  articulation agreement with the student's                                                                    
high school  in order to  ensure the credit would  be earned                                                                    
in both locations. The provision did not address GPA.                                                                           
                                                                                                                                
2:44:26 PM                                                                                                                    
                                                                                                                                
Vice-Chair Neuman  looked Section  26 pertaining  to funding                                                                    
awarded for a scholarship awarded  by a non-profit to a dual                                                                    
credit student. He  referred to the summary  of changes that                                                                    
allowed  a  non-profit to  fund  a  scholarship for  a  dual                                                                    
credit  student. He  wondered whether  a student  received a                                                                    
tax credit.                                                                                                                     
                                                                                                                                
Commissioner Hanley replied in  the negative. He provided an                                                                    
example  of  tax paying  corporation  providing  funds to  a                                                                    
university to provide scholarships  to students earning dual                                                                    
credits.  The  company  would  receive   a  tax  credit  for                                                                    
providing  the   funds  and  the   student  would   have  an                                                                    
opportunity to receive  a scholarship or defray  some of the                                                                    
costs.                                                                                                                          
                                                                                                                                
Representative  Munoz noted  that the  education tax  credit                                                                    
appeared to  apply to a  single student. She wondered  if it                                                                    
rose to the  level of the tax credit that  was 50 percent of                                                                    
a $100,000 donation. She wondered  if the intent was to fund                                                                    
the scholarship program versus an individual student.                                                                           
                                                                                                                                
Commissioner Hanley  replied that the intent  was to provide                                                                    
scholarships  or  to  defray   dual  credit  costs  for  any                                                                    
students;  however,  someone  providing a  scholarship  fund                                                                    
could  establish  parameters   designating  that  the  money                                                                    
should  support students  in a  specific  field or  go to  a                                                                    
particular institution.                                                                                                         
                                                                                                                                
2:47:04 PM                                                                                                                    
                                                                                                                                
Commissioner Rodell elaborated that  the intent was to allow                                                                    
the scholarship  program to be  operated by the  receiver of                                                                    
the donation. She detailed that  the tax credit was attached                                                                    
to the tax payer who  would determine which causes the money                                                                    
would go to. She clarified  that the credit was not intended                                                                    
to attach to a specific student.                                                                                                
                                                                                                                                
Representative  Munoz   asked  about  the   ultimate  hiring                                                                    
flexibility  provided  to  charter  schools.  She  spoke  to                                                                    
schools with  alternative education programs  (e.g. language                                                                    
immersion or  native language  instruction) where  the labor                                                                    
pool  may be  specialized  and hire  may  be difficult.  She                                                                    
wondered if  the legislation offered flexibility  that would                                                                    
allow charter schools to hire  outside the traditional labor                                                                    
force.                                                                                                                          
                                                                                                                                
Commissioner   Hanley   replied   in   the   negative.   The                                                                    
conversation  was primarily  one that  occurred between  the                                                                    
local  union,   school  district,  and  charter   school  to                                                                    
determine how a charter school would be staffed.                                                                                
                                                                                                                                
Representative  Munoz  wondered  if the  administration  had                                                                    
looked  at  having an  organization  other  than the  school                                                                    
district  authorize a  charter school  (e.g. an  educational                                                                    
nonprofit,  university,   or  other).   Commissioner  Hanley                                                                    
replied in the affirmative.  He detailed that several states                                                                    
allowed   multiple  authorizers.   He   relayed  there   was                                                                    
sometimes  a  charter  school   board  that  authorized  and                                                                    
operated what  was essentially  a separate  school district;                                                                    
not  defined by  geographic boundaries,  but defined  by the                                                                    
school's  mission   and  authorizer.  The  topic   had  been                                                                    
discussed  related to  providing  greater opportunities  for                                                                    
charters, but it not included in the bill.                                                                                      
                                                                                                                                
Representative Munoz thought the  committee may want to look                                                                    
at the items.                                                                                                                   
                                                                                                                                
2:49:49 PM                                                                                                                    
                                                                                                                                
Representative  Gattis  shared  that   she  had  a  bill  on                                                                    
multiple  authorizers, but  she was  not sure  her committee                                                                    
was  ready for  that. She  detailed that  the committee  had                                                                    
gotten hung up on another  school district and could not get                                                                    
past  the issue.  She elaborated  that Native  organizations                                                                    
had  expressed their  desire to  be  a multiple  authorizer.                                                                    
There were  charter schools that wanted  to participate. She                                                                    
believed  there  were some  great  programs  that the  state                                                                    
could grow into.  She opined that it had  been difficult for                                                                    
her  committee to  get around  the issue  especially in  the                                                                    
omnibus bill.  She expressed intent  to continue  working on                                                                    
the issue.                                                                                                                      
                                                                                                                                
Co-Chair Stoltze  asked what  DEED thought  about credential                                                                    
based licensing  for teachers.  He stated  that there  was a                                                                    
difficulty keeping teachers in  rural Alaska. He provided an                                                                    
example of a  person working in rural  Alaska for Department                                                                    
of  Fish and  Game with  a  master's degree  in the  science                                                                    
field.  He wondered  about setting  up  a truncated  process                                                                    
that would allow  the individual to get  a teaching license.                                                                    
He wondered  if it was  a possibility  to solve some  of the                                                                    
chronic shortages in villages.                                                                                                  
                                                                                                                                
Commissioner   Hanley   replied   that  the   AKT2   [Alaska                                                                    
Transition to  Teaching] program  had provided  an alternate                                                                    
route  to  becoming  a  teacher; people  with  a  degree  in                                                                    
another subject area  could begin working in  a school while                                                                    
getting their credentials and learning  the art of teaching.                                                                    
The state had  discontinued the program due  to its expense.                                                                    
He believed it was a great conversation to have.                                                                                
                                                                                                                                
2:52:32 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze  pointed  to the  comparative  expense  of                                                                    
bringing up  a teacher from  California who had  never lived                                                                    
in rural  Alaska. He  referred to the  benefit of  having an                                                                    
enthusiastic  teacher who  was familiar  with the  region in                                                                    
comparison   to   a   person   with   traditional   teaching                                                                    
experience. He was surprised at  the opposition he had faced                                                                    
on the  issue by  the educational  community. He  thought it                                                                    
would be  beneficial to  include the option  in the  bill to                                                                    
provide another tool in the tool box.                                                                                           
                                                                                                                                
Commissioner Hanley did not dispute  the significant cost of                                                                    
teacher turnover and the alienation  students felt with high                                                                    
turnover rates. There  was a fiscal component  to the state;                                                                    
the fiscal  component to the  districts was  the difference.                                                                    
The former program  had been successful, but  it was dropped                                                                    
due to cost.                                                                                                                    
                                                                                                                                
Representative  Wilson  asked for  the  cost  the state  was                                                                    
paying  to   transport  students   who  were   not  actually                                                                    
transported. She  understood that  currently the  state paid                                                                    
transportation   funding  for   charter  schools,   but  the                                                                    
students  did not  receive transportation.  She stated  that                                                                    
transportation  to  the  Catholic  school was  paid  for  in                                                                    
Fairbanks. She  believed that some boroughs  and cities took                                                                    
an administrative  fee from the  education formula.  She had                                                                    
thought  the money  all went  directly to  school districts.                                                                    
She opined  that formula funding  should go to  students and                                                                    
not boroughs.                                                                                                                   
                                                                                                                                
Co-Chair  Stoltze asked  if she  wanted  to include  lottery                                                                    
schools as well.                                                                                                                
                                                                                                                                
Representative  Wilson stated  that  a lottery  was used  in                                                                    
Fairbanks  to determine  charter school  attendees. She  was                                                                    
interested in transportation costs  the state was paying for                                                                    
any students who were not being transported.                                                                                    
                                                                                                                                
2:56:37 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze  assumed   the  superintendents  knew  the                                                                    
number of boundary exempt students in their districts.                                                                          
                                                                                                                                
Commissioner   Hanley  replied   in  the   affirmative.  The                                                                    
superintendents  would  know  the   number  of  students  in                                                                    
alternative and  charter school programs that  districts did                                                                    
or did not  offer transportation to. The  component spoke to                                                                    
charter schools,  which encompassed any  alternative program                                                                    
(e.g. optional,  charter, or other).  A lottery  process was                                                                    
typically  used when  there were  more  applicants than  the                                                                    
school  had  room for.  Additionally,  there  was a  lottery                                                                    
process  for neighborhood  schools when  students wanted  to                                                                    
come in  from outside  the district.  He explained  that the                                                                    
lottery  process  referred  to  the  way  the  schools  were                                                                    
filled.  He shared  that Representative  Ledoux's staff  had                                                                    
called  all  school  districts   with  charter  schools  (he                                                                    
believed  there  were  five districts)  to  determine  which                                                                    
districts  provided transportation.  Anchorage was  the only                                                                    
district   out   of   the  five   that   did   not   provide                                                                    
transportation.  He  believed   Anchorage  did  not  provide                                                                    
transportation  to alternative  schools either.  He did  not                                                                    
know if  the state should  get involved  in the issue  or if                                                                    
local  parents  should  ask  why  their  students  were  not                                                                    
provided with transportation.                                                                                                   
                                                                                                                                
Co-Chair Stoltze  believed the  larger question  was whether                                                                    
school   districts   were   receiving  the   allotment   for                                                                    
transportation.                                                                                                                 
                                                                                                                                
Representative Wilson  wondered why the state  would pay for                                                                    
the   transportation  of   a  student   that   it  was   not                                                                    
transporting. She thought it was  nonsensical and wrong. She                                                                    
thought  there may  be  other places  the  state was  paying                                                                    
transportation funds for students  who were not transported.                                                                    
Additionally, she wondered whether  boroughs and cities were                                                                    
taking  formula  funding  away  from  schools  at  different                                                                    
rates. She did  not know if the activity  was occurring, but                                                                    
believed  that it  could  be a  reason  some districts  were                                                                    
short of  funding. She discussed  mandatory local  taxes and                                                                    
in-kind donations versus financial donations.                                                                                   
                                                                                                                                
3:00:51 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze noted  that it  was informational  to know                                                                    
about the  disbursement of funds.  He stated that it  cost a                                                                    
school  district the  same amount  to transport  32 students                                                                    
versus  40 students.  He did  not want  school districts  to                                                                    
think they would be penalized  and reiterated the importance                                                                    
of understanding the various pieces of funding.                                                                                 
                                                                                                                                
Representative Gara wondered about  the purpose of requiring                                                                    
a high  school student  to take  the SAT or  ACT if  a score                                                                    
requirement  was   not  imposed.   He  pointed   to  studies                                                                    
indicating  that  the  SAT  had little  bearing  on  what  a                                                                    
student  did  in  college. He  wondered  about  Commissioner                                                                    
Hanley's view of a bill that would not require the tests.                                                                       
                                                                                                                                
Commissioner Hanley replied  the goal was to  move away from                                                                    
requiring a student to pass  a test towards a requirement of                                                                    
participation. The idea was to  provide data and information                                                                    
for the  student, the school,  and the parents related  to a                                                                    
student's next  steps. Currently WorkKeys was  required; the                                                                    
addition  of  the  SAT  and   ACT  would  give  students  an                                                                    
additional choice. The  tools were also used  to qualify for                                                                    
the Alaska  Performance Scholarship. Currently if  a student                                                                    
wanted  to qualify  for the  performance scholarship  on the                                                                    
college route  they would  be required to  pass and  pay for                                                                    
either the SAT or ACT.  The bill would provide students with                                                                    
a choice and  the state would pay for  one administration of                                                                    
the exam.                                                                                                                       
                                                                                                                                
Representative  Gara   explained  that  there   was  already                                                                    
incentive for students who needed one  of the tests to go on                                                                    
to college.  He wondered  how requiring a  non-college bound                                                                    
student to take one of the  tests would be of any advantage.                                                                    
He  thought students  who did  not need  the test  would not                                                                    
take it seriously.                                                                                                              
                                                                                                                                
Commissioner   Hanley  replied   that  without   the  option                                                                    
students would continue  to be required to  take WorkKeys in                                                                    
11th  grade. The  addition of  the ACT  and SAT  would allow                                                                    
students to choose between the three options.                                                                                   
                                                                                                                                
Representative  Gara  asked  for  verification  that  adding                                                                    
transportation funding  for charter school students  did not                                                                    
take away  funding for  other students.  Commissioner Hanley                                                                    
replied  in the  affirmative.  He  believed current  statute                                                                    
outlined that a  charter school's budget should  not be less                                                                    
than  the  funds generated  by  its  students; however,  the                                                                    
language   was   broad   enough   that  it   was   open   to                                                                    
interpretation and  was not always  included. He  noted that                                                                    
there were  no additional  funds going  out. He  referred to                                                                    
testimony from several school districts  that they would not                                                                    
be  impacted because  they were  already transporting  their                                                                    
students.                                                                                                                       
                                                                                                                                
Representative   Gara  asked   for  verification   that  the                                                                    
provision would  not dilute funds  going to  other students.                                                                    
Commissioner  Hanley answered  that  if a  district was  not                                                                    
currently transporting  students to  its charter  schools it                                                                    
may need to begin transporting  the students and may need to                                                                    
locate the  funds to do so.  He elaborated that if  that was                                                                    
the  case  a  disparity  existed  between  the  charter  and                                                                    
neighborhood  schools;  funds  may  need to  be  shifted  to                                                                    
provide equity.                                                                                                                 
                                                                                                                                
3:06:15 PM                                                                                                                    
                                                                                                                                
Co-Chair   Stoltze   informed   the   committee   that   the                                                                    
legislature  was  currently   appropriating  money  for  the                                                                    
charter  school students  on a  pro rata  basis through  the                                                                    
formula. Commissioner Hanley agreed.                                                                                            
                                                                                                                                
Vice-Chair  Neuman  recalled  that  overcrowding  on  school                                                                    
buses had been  an issue in the past. He  believed buses had                                                                    
been  allowed  to  go  over  capacity  by  approximately  20                                                                    
percent.  He  wondered  if the  regulations  were  still  in                                                                    
place.                                                                                                                          
                                                                                                                                
Commissioner  Hanley replied  that safety  requirements were                                                                    
still  expected  to  be  met.  He could  not  speak  to  the                                                                    
specific requirements  as decisions  were made  locally. The                                                                    
department  expected districts  to  have  student safety  in                                                                    
mind; students  should have  a seat and  should not  need to                                                                    
stand.                                                                                                                          
                                                                                                                                
Vice-Chair Neuman  asked for an explanation  of the WorkKeys                                                                    
requirement. He  wondered how it  differed from  Common Core                                                                    
or Alaska standards.                                                                                                            
                                                                                                                                
Commissioner Hanley replied that  WorkKeys was not connected                                                                    
to Common Core  or the Alaska standards.  WorkKeys had three                                                                    
components  that  gave   students  information  about  their                                                                    
aptitude for  a particular career;  whereas the SAT  and ACT                                                                    
were  geared more  towards  colleges  and universities.  The                                                                    
three  components  included  location of  information,  math                                                                    
application,  and understanding  information. Students  were                                                                    
provided with a score sheet and certificate.                                                                                    
                                                                                                                                
3:08:55 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg wondered  if there  was a  system                                                                    
used  to evaluate  the  transportation efficiencies  between                                                                    
school  districts. He  wondered  whether there  was a  pupil                                                                    
mile or number  of students on a bus per  mile. He was under                                                                    
the  impression  that school  districts  did  not all  treat                                                                    
transportation in the same way.                                                                                                 
                                                                                                                                
Commissioner  Hanley  replied  that  in the  past  DEED  had                                                                    
reimbursed schools  for transportation  based on  routes. He                                                                    
detailed that the  exercise had been cumbersome  and did not                                                                    
incentivize  efficiencies on  the  routes.  The process  had                                                                    
been changed many years back  and schools began to be funded                                                                    
based on  actual contract costs  and a per pupil  basis. The                                                                    
cost  of  transportation in  contracts  was  divided by  the                                                                    
number of students.  He added that there  had been increases                                                                    
since  then  to  pupil transportation.  He  summarized  that                                                                    
currently transportation was funded  on a per student basis,                                                                    
but it had previously based on actual contracts and costs.                                                                      
                                                                                                                                
Co-Chair  Stoltze noted  that he  and Representative  Gattis                                                                    
represented   districts  with   higher  costs.   He  thanked                                                                    
Representative Gattis  for her time and  candor. He informed                                                                    
the  committee that  it  would spend  multiple  days on  the                                                                    
topic. He  asked members to  communicate through  his office                                                                    
and with  the departments. He believed  the committee needed                                                                    
to do its due diligence on the subject.                                                                                         
                                                                                                                                
HB  278  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
HOUSE BILL NO. 150                                                                                                            
                                                                                                                                
     "An Act extending the unemployment contributions for                                                                       
     the   Alaska   technical   and   vocational   education                                                                    
     program."                                                                                                                  
                                                                                                                                
HB 150 was SCHEDULED but not HEARD.                                                                                             
                                                                                                                                
HOUSE BILL NO. 179                                                                                                            
                                                                                                                                
     "An Act providing for public school funding for                                                                            
     telecommunications or Internet services."                                                                                  
                                                                                                                                
HB 179 was SCHEDULED but not HEARD.                                                                                             
                                                                                                                                
HOUSE BILL NO. 220                                                                                                            
                                                                                                                                
     "An Act repealing the secondary student competency                                                                         
     examination and related requirements; and providing                                                                        
     for an effective date."                                                                                                    
                                                                                                                                
HB 220 was SCHEDULED but not HEARD.                                                                                             
                                                                                                                                
HOUSE BILL NO. 291                                                                                                            
                                                                                                                                
     "An Act increasing the stipend for boarding school                                                                         
     students; and providing for an effective date."                                                                            
                                                                                                                                
HB 291 was SCHEDULED but not HEARD.                                                                                             
                                                                                                                                
Co-Chair Stoltze discussed the schedule for the following                                                                       
day.                                                                                                                            
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
3:14:24 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 3:14 p.m.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
CSHB278 EDC Letters of Support.pdf HFIN 3/17/2014 1:30:00 PM
HB 278
CSHB278 EDC Resolutions of Support.pdf HFIN 3/17/2014 1:30:00 PM
HB 278
CSHB278 EDC Sponsor Statement-Transmittal Letter.pdf HFIN 3/17/2014 1:30:00 PM
HB 278
CSHB278 EDC Summary of Changes from HB278.pdf HFIN 3/17/2014 1:30:00 PM
HB 278
HB291 Sponsor Statement.pdf HFIN 3/17/2014 1:30:00 PM
HB 291
HB291 Support Master File.pdf HFIN 3/17/2014 1:30:00 PM
HB 291
HB 278 CS NEW FN DEED TLS.pdf HFIN 3/17/2014 1:30:00 PM
HB 278
HB 278 CS NEW FN DOR.pdf HFIN 3/17/2014 1:30:00 PM
HB 278
HB 278 CS NEW FN DOL.pdf HFIN 3/17/2014 1:30:00 PM
HB 278
HB 278 CS NEW FN FUND Transfers.pdf HFIN 3/17/2014 1:30:00 PM
HB 278
HB 278 CS NEW FN UOA.pdf HFIN 3/17/2014 1:30:00 PM
HB 278
HB 278 CS NEW FN DEED Foundation.pdf HFIN 3/17/2014 1:30:00 PM
HB 278
Summary of HB 278 for Finance.pdf HFIN 3/17/2014 1:30:00 PM
HB 278
HB 220 CS WORKDRAFT FIN 28-LS0947-C.pdf HFIN 3/17/2014 1:30:00 PM
HB 220
HB 220 CS DRAFT FN DEED TLS 3-18-14.pdf HFIN 3/17/2014 1:30:00 PM
HB 220