Legislature(2013 - 2014)HOUSE FINANCE 519

04/02/2014 01:30 PM FINANCE


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01:50:49 PM Start
01:51:05 PM HB278
01:53:03 PM Amendments
07:37:10 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 278 EDUCATION: FUNDING/TAX CREDITS/PROGRAMS TELECONFERENCED
Moved CSHB 278(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 2, 2014                                                                                            
                         1:50 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:50:49 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stoltze called the  House Finance Committee meeting                                                                    
to order at 1:50 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
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                                                                                                                
                                                                                                                                
Representative Alan Austerman, Co-Chair                                                                                         
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Lynn Gattis;  Representative Lora  Reinbold;                                                                    
Daniel  George, Staff,  Representative Bill  Stoltze; Dianne                                                                    
Blumer,  Commissioner,  Department  of Labor  and  Workforce                                                                    
Development; Doug Wooliver,  Deputy Administrative Director,                                                                    
Alaska   Court   System;   Michael   Hanley,   Commissioner,                                                                    
Department  of Education  and  Early Development;  Elizabeth                                                                    
Nudelman,   Director,   School  Finances   and   Facilities,                                                                    
Department of Education and Early Development.                                                                                  
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 278    EDUCATION: FUNDING/TAX CREDITS/PROGRAMS                                                                               
                                                                                                                                
          CSHB 278 (FIN) was  REPORTED out of committee with                                                                    
          no  recommendation and  with one  new zero  fiscal                                                                    
          note from  the Department  of Education  and Early                                                                    
          Development, two  new fiscal notes from  the House                                                                    
          Finance  Committee for  Fund Transfers,  three new                                                                    
          fiscal notes from the  Department of Education and                                                                    
          Early Development,  two new fiscal notes  from the                                                                    
          Department  of  Labor and  Workforce  Development,                                                                    
          one new  fiscal note from the  University, one new                                                                    
          indeterminate fiscal  note from the  Department of                                                                    
          Revenue,  one  new  zero   fiscal  note  from  the                                                                    
          Department of  Revenue,  one new  fiscal note from                                                                    
          the  Department  of  Administration, and  one  new                                                                    
          fiscal note  from the House Finance  Committee for                                                                    
          State Assistance to Retirement Funds.                                                                                 
                                                                                                                                
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."                                                                                      
                                                                                                                                
1:51:05 PM                                                                                                                    
                                                                                                                                
^AMENDMENTS                                                                                                                   
                                                                                                                                
1:53:03 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze discussed the amendment process.                                                                               
                                                                                                                                
Representative Munoz MOVED to ADOPT Amendment 15, 28-                                                                           
GH27165\G.5,  Mischel,  4/1/14,   by  Representative  Munoz,                                                                    
Representative     Edgmon,      Representative     Thompson,                                                                    
Representative Gara  and Representative Guttenberg  (copy on                                                                    
file):                                                                                                                          
                                                                                                                                
     Page 1, line 10, through page 2, line 1:                                                                                   
     Delete "relating  to the  local contribution  to public                                                                    
     education  funding;  relating  to  the  withholding  of                                                                    
     state aid  to public  education for  teacher retirement                                                                    
     contributions;  relating   to  the   teachers'  defined                                                                    
     benefit  retirement  plan; establishing  the  teachers'                                                                    
     pension reserve fund;"                                                                                                     
                                                                                                                                
     Page 11, line 21, through page 14, line 3:                                                                                 
     Delete all material.                                                                                                       
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 14, line 23:                                                                                                          
     Delete "sec. 18"                                                                                                           
     Insert "sec. 16"                                                                                                           
                                                                                                                                
     Page 14, line 26:                                                                                                          
     Delete "secs. 18 and 19"                                                                                                   
     Insert "secs. 16 and 17"                                                                                                   
                                                                                                                                
     Page 16, line 17, through page 17, line 19:                                                                                
     Delete all material.                                                                                                       
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 19, line 17, through page 22, line 19:                                                                                
     Delete all material.                                                                                                       
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 33, line 29:                                                                                                          
     Delete "Sections 22 - 24"                                                                                                  
     Insert "Sections 20 - 22"                                                                                                  
                                                                                                                                
     Page 33, lines 30 - 31:                                                                                                    
     Delete "secs. 22 - 24"                                                                                                     
     Insert "secs. 20 - 22"                                                                                                     
                                                                                                                                
     Page 34, line 18:                                                                                                          
     Delete "Sections 22 - 24, 28, 50, and 52"                                                                                  
     Insert "Sections 20 - 23, 42, and 44"                                                                                      
                                                                                                                                
     Page 34, line 20:                                                                                                          
     Delete all material.                                                                                                       
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 34, line 21:                                                                                                          
     Delete "19, and 29 - 31"                                                                                                   
     Insert "17, and 24 - 26"                                                                                                   
                                                                                                                                
     Page 34, line 22:                                                                                                          
     Delete "Section 20"                                                                                                        
     Insert "Section 18"                                                                                                        
                                                                                                                                
     Page 34, line 23:                                                                                                          
     Delete "Sections 37, 40, 43, and 46"                                                                                       
     Insert "Sections 29, 32, 35, and 38"                                                                                       
                                                                                                                                
     Page 34, line 24:                                                                                                          
     Delete "secs. 54 - 58"                                                                                                     
     Insert "secs. 46 - 49"                                                                                                     
                                                                                                                                
Vice-Chair Neuman OBJECTED for discussion.                                                                                      
                                                                                                                                
Representative Munoz discussed the  amendment. The intent of                                                                    
the amendment  was to strip  the provisions relating  to the                                                                    
Teachers'  Retirement  System  (TRS) from  CSHB  278  (FIN),                                                                    
version G.  The reasons  were related  to concerns  from the                                                                    
administration   about  the   proposal   contained  in   the                                                                    
legislation.  She supported  the governor's  approach, which                                                                    
was  presented  as  a  method of  paying  off  the  unfunded                                                                    
liability  in  20  years.  The  current  plan  extended  the                                                                    
payment to 40  years. The local contribution  rate was moved                                                                    
from  12.56  percent  to  32.56  percent.  She  mentioned  a                                                                    
formula allocation  to reimburse  the school  districts, but                                                                    
no  funding contemplated  for the  University and  other TRS                                                                    
employers.                                                                                                                      
                                                                                                                                
Representative  Munoz   stated  that  the   most  concerning                                                                    
portion  of  the proposal  addressed  the  depletion of  the                                                                    
state's  trust   funds.  The   combined  trust   funds  held                                                                    
approximately  17  billion.  The  interest  from  the  funds                                                                    
provided  a major  contribution  toward the  payment of  the                                                                    
unfunded liability  along with retirement debt  both current                                                                    
and  future. She  pointed out  that  the retirement  payment                                                                    
would  be approximately  $3.5 billion.  She wished  to avoid                                                                    
shifting the  burden to future  generations. She  noted that                                                                    
Commissioner  Rodell emphasized  concerns that  the proposal                                                                    
would  affect the  state's  credit  worthiness, which  could                                                                    
make the approval of gasline financing difficult.                                                                               
                                                                                                                                
1:56:23 PM                                                                                                                    
                                                                                                                                
Representative  Munoz  discussed  further concern  with  the                                                                    
proposal's  lack of  vetting.  She believed  that the  large                                                                    
decision  required  additional  time and  deliberation.  She                                                                    
stated that  her office requested  an actuarial  analysis on                                                                    
the proposal, but  had yet to receive it.  She believed that                                                                    
such  a   large  decision   required  additional   time  and                                                                    
deliberation.                                                                                                                   
                                                                                                                                
Representative Gara stated that  Amendment 17 was similar in                                                                    
nature  and   he  requested   that  he   and  Representative                                                                    
Guttenberg be added as co-sponsors to the amendment.                                                                            
                                                                                                                                
1:57:45 PM                                                                                                                    
                                                                                                                                
Representative Thompson  acknowledged that the  decision was                                                                    
a difficult  one. The bill  placed an  unpredictable measure                                                                    
in statute, denying the  legislature the flexibility needed.                                                                    
He wished that  prior legislators had arrived  at a solution                                                                    
sooner. He supported the amendment.                                                                                             
                                                                                                                                
Representative  Costello considered  all of  the amendments,                                                                    
and appreciated the sponsor's sentiment.  She noted that the                                                                    
plan proposed in the bill's  format placed a larger lump sum                                                                    
of $1.4 billion  from contributions with a  longer period of                                                                    
time until  payout. She mentioned  the commitment  on behalf                                                                    
of  the  legislature  to  address  TRS.  She  believed  that                                                                    
placing the  amounts in statute  commits the  legislature to                                                                    
the  effort. She  stated  that she  would  vote against  the                                                                    
amendment.                                                                                                                      
                                                                                                                                
2:00:18 PM                                                                                                                    
                                                                                                                                
Representative Holmes  agreed that the issue  was difficult.                                                                    
She  noted that  the  major budget  drivers included  public                                                                    
education,  Public Employees'  Retirement System  (PERS) and                                                                    
TRS. She admitted  that she was conflicted  about the issue.                                                                    
Discussions  in  the  building provided  her  with  valuable                                                                    
information   regarding   the    unanimity   to   contribute                                                                    
approximately $3  billion into PERS  and TRS trust  funds in                                                                    
the current year. She noted  the unanimity of opinion in the                                                                    
building  regarding  a  large upfront  payment  followed  by                                                                    
substantial payments  in the  upcoming years.  She discussed                                                                    
the   state's  obligation   to   pay   the  liability.   She                                                                    
interpreted agreement  between the governor's plan  and that                                                                    
of the Legislative  Finance Division. She did  not feel that                                                                    
the  CS provided  a final  product. She  predicted continued                                                                    
discussion and  convergence. She  knew that  actuaries would                                                                    
be available to  help the legislature flush  out both plans.                                                                    
She stated  that she would  vote against the  amendment. She                                                                    
believed  that  the  final product  would  be  a  functional                                                                    
hybrid  of  both plans  and  she  was optimistic  about  the                                                                    
outcome.                                                                                                                        
                                                                                                                                
2:03:28 PM                                                                                                                    
                                                                                                                                
Representative Gara  stated that voting along  each member's                                                                    
personal  analysis  was  important.  He  believed  that  the                                                                    
governor's plan  made sense because  a substantial  pay down                                                                    
of debt led  to less future interest. He  pointed out future                                                                    
deficits faced  by the state.  Annual payments should  be as                                                                    
low  as possible,  which would  be accomplished  by a  large                                                                    
initial pay down.  The proposal in the CS did  not include a                                                                    
large one-year pay down. He  stated that the bill's proposal                                                                    
was not properly vetted.                                                                                                        
                                                                                                                                
Co-Chair  Stoltze  replied that  the  bill  proposed a  $1.4                                                                    
billion  pay-down,  while  the   governor  proposed  a  $1.1                                                                    
billion pay-down.  He clarified  that the  pay-down proposed                                                                    
in the CS was larger than the governor's stated proposal.                                                                       
                                                                                                                                
Representative Gara understood  that the governor's proposed                                                                    
$3 billion  pay-down included  the $1  billion owed  for the                                                                    
current year.  The analysis of the  governor's plan included                                                                    
an additional  payment of  $2 billion  that would  lower the                                                                    
escalating annual costs, which  would soon exceed $1 billion                                                                    
per year, to  approximately $500 million per  year. He noted                                                                    
that the legislature could further  alter the payment amount                                                                    
to extend the  payments. He had not had the  time to analyze                                                                    
the CS thoroughly.  He had not viewed  an actuarial analysis                                                                    
of  the plan  proposed in  the CS.  He was  most comfortable                                                                    
with the governor's proposal.                                                                                                   
                                                                                                                                
Co-Chair  Stoltze interrupted  that the  bill addressed  TRS                                                                    
alone, while  Representative Gara  was discussing  both PERS                                                                    
and TRS.                                                                                                                        
                                                                                                                                
Representative  Gara  understood   and  preferred  that  the                                                                    
legislature address  PERS and TRS  together. He  stated that                                                                    
the proposal to contribute  an additional $2 billion upfront                                                                    
would  reduce  the  state's  future  interest  payments.  He                                                                    
stated that he  had not been presented with  a PERS proposal                                                                    
or solution and  was not comfortably informed  about the TRS                                                                    
proposal  in the  CS. He  expressed  discomfort with  moving                                                                    
forward   without  all   of  the   necessary  analysis.   He                                                                    
encouraged the governor  to present his plan in  the form of                                                                    
a bill.                                                                                                                         
                                                                                                                                
2:08:20 PM                                                                                                                    
                                                                                                                                
Representative Wilson  pointed out  that fiscal  note number                                                                    
12 had  the $1.4 billion contribution  spoken about earlier.                                                                    
She  understood the  sponsor of  the amendment's  sentiment.                                                                    
She asked which  plan was most affordable to  the state. She                                                                    
discussed  the comparison  between a  30-year and  a 15-year                                                                    
mortgage.  Most people  would prefer  to  pay a  debt in  15                                                                    
years, but settle for the  more affordable 30-year term. She                                                                    
understood  that  the  governor  could  choose  to  pay  his                                                                    
proposed  amount  despite legislative  recommendations.  She                                                                    
pointed out that  future payments would be  reviewed for the                                                                    
purposes of bond rating. She  stressed the need to take care                                                                    
of Alaskan  retirees. She hoped  for an  optimistic outcome.                                                                    
She stated that she would vote against the amendment.                                                                           
                                                                                                                                
2:10:53 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg  stated  that  he  had  initially                                                                    
hoped  for actuarial  analysis of  the governor's  plan, but                                                                    
another plan  was presented in  the CS without  analysis. He                                                                    
supported the governor's past  recommendations on the issue.                                                                    
He  recalled testimony  from Commissioner  Rodell expressing                                                                    
wide-ranging concerns for the state  and its bond rating. He                                                                    
wished  to   avoid  risks   until  better   information  was                                                                    
available. He  trusted the concerns of  Commissioner Rodell.                                                                    
He supported the amendment.                                                                                                     
                                                                                                                                
2:13:40 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze appreciated the  level of discussion on the                                                                    
issue. He discussed  the recognition of the  legal and moral                                                                    
commitment. He argued that TRS  was an education cost driver                                                                    
and  a legacy  issue with  no insinuation  that the  funding                                                                    
will be used in the  classrooms. The payment would encompass                                                                    
a  piece of  the state's  obligation  to the  cost of  doing                                                                    
business  in the  education environment.  He noted  that the                                                                    
bill  allowed for  necessary elevated  committee discussion.                                                                    
He believed  that the  CS spurred  activity and  analysis on                                                                    
the important topic. The bill  allowed for presentations and                                                                    
deliberations.                                                                                                                  
                                                                                                                                
Co-Chair Stoltze explained  that the approach in  the CS was                                                                    
circulating   throughout   the    Capitol   prior   to   the                                                                    
introduction of  the CS. He  stated that  the administration                                                                    
had   responsibility   for   providing  information   in   a                                                                    
forthcoming  manner. He  noted that  the issue  was separate                                                                    
from the  PERS issue  with a  different payment  system. The                                                                    
committee worked to allow the  state to meet their moral and                                                                    
legal  obligation.  He stated  that  he  had many  questions                                                                    
about the governor's plan. He  stated that the amendment may                                                                    
lead  to  a plan  similar  to  the governor's  proposal.  He                                                                    
stated that  approval of the  amendment would  eliminate the                                                                    
vehicle for discussion. He welcomed  continued debate on the                                                                    
issue.                                                                                                                          
                                                                                                                                
2:20:46 PM                                                                                                                    
                                                                                                                                
Representative Munoz  expressed concern about  the depletion                                                                    
of the  trust funds  over time. Revenue  would be  lost with                                                                    
the depletion  of funds. The  state would  generate billions                                                                    
of dollars over the course  of the obligation with the trust                                                                    
fund.  She stated  that  Deputy  Commissioner Mike  Barnhill                                                                    
described  the change  as radical.  The multibillion  dollar                                                                    
change  would likely  affect the  state's credit  worthiness                                                                    
and the  ability to obtain  gasline financing.  She strongly                                                                    
suggested  an  actuarial analysis  prior  to  making such  a                                                                    
large decision.                                                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Guttenberg, Munoz, Thompson, Edgmon, Gara                                                                             
OPPOSED: Holmes, Neuman, Wilson, Costello, Stoltze                                                                              
                                                                                                                                
The MOTION FAILED (5/5).                                                                                                        
                                                                                                                                
2:23:21 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:24:23 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Stoltze MOVED to ADOPT Amendment 16, 28-                                                                               
GH2716\G.10, Mischel,  4/1/14, by  Co-Chair Stoltze  and Co-                                                                    
Chair Austerman (copy on file):                                                                                                 
                                                                                                                                
     Page 34, line 20:                                                                                                          
     Delete "Sections 16, 25, 27, and 33 - 35"                                                                                  
     Insert "AS 14.17.410(b)(1), as amended by sec. 16 of                                                                       
     this Act, and secs. 25 and 33 - 35                                                                                         
                                                                                                                                
Vice-Chair Neuman OBJECTED for discussion.                                                                                      
                                                                                                                                
DANIEL   GEORGE,   STAFF,   REPRESENTATIVE   BILL   STOLTZE,                                                                    
discussed   amendment  16,   which  included   collaboration                                                                    
between  the co-chairs  offices, Legislative  Legal Services                                                                    
and Legislative Finance Division.  The amendment changed the                                                                    
effective date  on page 34,  line 20  from June 30,  2014 to                                                                    
July 1, 2014  as related to the 45-40 percent  change in the                                                                    
required school district contribution.                                                                                          
                                                                                                                                
Co-Chair  Stoltze  appreciated Legislative  Legal  Services'                                                                    
help with the amendment.                                                                                                        
                                                                                                                                
Vice-Chair  Neuman WITHDREW  his OBJECTION.  There being  NO                                                                    
OBJECTION, it was so ordered. Amendment 16 was adopted.                                                                         
                                                                                                                                
2:26:03 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  MOVED  to  ADOPT  Amendment  3,  28-                                                                    
GH2716\G.12,  Mischel,  4/1/14  by Tammie  Wilson  (copy  on                                                                    
file):                                                                                                                          
                                                                                                                                
     Page 15, line 30, through page 16, line 16:                                                                                
     Delete all material.                                                                                                       
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 33, line 29:                                                                                                          
     Delete "Sections 22 - 24 of this Act apply"                                                                                
     Insert "Section 22 of this Act applies"                                                                                    
                                                                                                                                
     Page 33, lines 30 - 31:                                                                                                    
     Delete "secs. 22 - 24"                                                                                                     
     Insert "sec. 22"                                                                                                           
                                                                                                                                
     Page 34, line 18:                                                                                                          
     Delete "Sections 22 - 24, 28, 50, and 52"                                                                                  
     Insert "Sections 22, 26, 48, and 50"                                                                                       
                                                                                                                                
     Page 34, line 20:                                                                                                          
     Delete "25, 27, and 33 - 35"                                                                                               
     Insert "23, 25, and 31 - 33"                                                                                               
                                                                                                                                
     Page 34, line 21:                                                                                                          
     Delete "29 - 31"                                                                                                           
     Insert "27 - 29"                                                                                                           
                                                                                                                                
     Page 34, line 23:                                                                                                          
     Delete "Sections 37, 40, 43, and 46"                                                                                       
     Insert "Sections 35, 38, 41, and 44"                                                                                       
                                                                                                                                
     Page 34, line 24:                                                                                                          
     Delete "secs. 54 - 58"                                                                                                     
     Insert "secs. 52 - 56"                                                                                                     
                                                                                                                                
Vice-Chair Neuman OBJECTED for discussion.                                                                                      
                                                                                                                                
Representative Wilson discussed the amendment, which was                                                                        
added in the House Education Committee.                                                                                         
                                                                                                                                
Co-Chair Stoltze explained that the inclusion of the                                                                            
language in the CS was an oversight.                                                                                            
                                                                                                                                
Representative Gara requested further clarification.                                                                            
                                                                                                                                
Representative Wilson replied that the five-year review                                                                         
would be removed in section 23. Section 24 referred to                                                                          
section 23.                                                                                                                     
                                                                                                                                
2:28:01 PM                                                                                                                    
                                                                                                                                
Vice-Chair Neuman WITHDREW his OBJECTION. There being NO                                                                        
OBJECTION, it was so ordered. Amendment 3 was adopted.                                                                          
                                                                                                                                
2:28:43 PM                                                                                                                    
                                                                                                                                
Representative Edgmon MOVED to ADOPT Amendment 4, 28-                                                                           
GH2716\G.3, Mischel, 4/1/14, by Representative Edgmon (copy                                                                     
on file):                                                                                                                       
                                                                                                                                
     Page 15, following line 29:                                                                                                
     Insert a new bill section to read:                                                                                         
        "* Sec. 23. AS 14.20.150 is  amended by adding a new                                                                
     subsection to read:                                                                                                        
     (f)  For teachers employed  by a rural school district,                                                                    
     the  years of  employment  required  to acquire  tenure                                                                    
     rights  as provided  in (a)  of this  section shall  be                                                                    
     reduced  by  two  years.  In  this  subsection,  "rural                                                                    
     school   district"   means   a   regional   educational                                                                    
     attendance  area  or a  school  district  located in  a                                                                    
     small borough or first class city with a population of                                                                     
     less than 5,500."                                                                                                        
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 33, line 29:                                                                                                          
     Delete "Sections 22 - 24"                                                                                                  
     Insert "Sections 22 - 25"                                                                                                  
                                                                                                                                
     Page 33, lines 30 - 31:                                                                                                    
     Delete "secs. 22 - 24"                                                                                                     
     Insert "secs. 22 - 25"                                                                                                     
                                                                                                                                
     Page 34, line 18:                                                                                                          
     Delete "Sections 22 - 24, 28, 50, and 52"                                                                                  
     Insert "Sections 22 - 25, 29, 51, and 53"                                                                                  
                                                                                                                                
     Page 34, line 20:                                                                                                          
     Delete "25, 27, and 33 - 35"                                                                                               
     Insert "26, 28, and 34 - 36"                                                                                               
                                                                                                                                
     Page 34, line 21:                                                                                                          
     Delete "29 - 31"                                                                                                           
     Insert "30 - 32"                                                                                                           
                                                                                                                                
     Page 34, line 23:                                                                                                          
     Delete "Sections 37, 40, 43, and 46"                                                                                       
     Insert "Sections 38, 41, 44, and 47"                                                                                       
                                                                                                                                
     Page 34, line 24:                                                                                                          
     Delete "secs. 54 - 58"                                                                                                     
     Insert "secs. 55 - 59"                                                                                                     
                                                                                                                                
Vice-Chair Neuman OBJECTED for discussion.                                                                                      
                                                                                                                                
Representative  Edgmon discussed  the  amendment. He  stated                                                                    
the purpose was to return  to language creating a dual track                                                                    
for teacher tenure. Larger school  districts would remain at                                                                    
the  five-year tenure  mark, while  smaller districts  would                                                                    
use the three-year tenure mark.  He listed the larger school                                                                    
districts.  Superintendents  in  his district  had  conveyed                                                                    
that having  three-year tenure would  help the  districts in                                                                    
terms of recruitment and retention  of teachers. He believed                                                                    
that  a   three-year  period  was  adequate   in  a  smaller                                                                    
district.                                                                                                                       
                                                                                                                                
Co-Chair Stoltze believed that  the amendment was offered in                                                                    
the spirit  of good will. He  noted that he voted  against a                                                                    
similar amendment on the House Floor last year.                                                                                 
                                                                                                                                
2:31:03 PM                                                                                                                    
                                                                                                                                
Representative  Wilson did  not realize  that Mt.  Edgecombe                                                                    
would  not   be  included.  She  pointed   out  that  school                                                                    
districts  could  make their  own  decisions,  but the  bill                                                                    
enforced  tenure after  five years  of teacher  service. She                                                                    
believed  that  tenure  could  be  written  into  individual                                                                    
district's   contracts.   She   expressed   concerns   about                                                                    
micromanaging school districts.                                                                                                 
                                                                                                                                
Co-Chair Stoltze also had issues with the amendment.                                                                            
                                                                                                                                
Representative   Gara  asked   about  a   school  district's                                                                    
negotiation of a shorter term.                                                                                                  
                                                                                                                                
Representative  Wilson understood  that the  districts could                                                                    
draft contracts for shorter durations.                                                                                          
                                                                                                                                
Co-Chair Stoltze  supposed that the arguments  about teacher                                                                    
tenure would not have occurred  if contracts could establish                                                                    
durations.                                                                                                                      
                                                                                                                                
Vice-Chair  Neuman WITHDREW  his OBJECTION.  There being  NO                                                                    
OBJECTION, it was so ordered. Amendment 4 was adopted.                                                                          
                                                                                                                                
2:35:18 PM                                                                                                                    
                                                                                                                                
Representative  Gara   MOVED  to  ADOPT  Amendment   5,  28-                                                                    
GH2716\G.13, Wallace/Mischel, 4/1/14  by Representative Gara                                                                    
and Representative Guttenberg (copy on file):                                                                                   
                                                                                                                                
     Page 15, line 13, through page 16, line 16:                                                                                
     Delete all material.                                                                                                       
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 33, lines 27 - 31:                                                                                                    
     Delete all material.                                                                                                       
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 34, line 18:                                                                                                          
     Delete "Sections 22 - 24, 28, 50, and 52"                                                                                  
     Insert "Sections 25 and 48"                                                                                                
                                                                                                                                
     Page 34, line 20:                                                                                                          
     Delete "25, 27, and 33 - 35"                                                                                               
     Insert "22, 24, and 30 - 32"                                                                                               
                                                                                                                                
     Page 34, line 21:                                                                                                          
     Delete "29 - 31"                                                                                                           
     Insert "26 - 28"                                                                                                           
                                                                                                                                
     Page 34, line 23:                                                                                                          
     Delete "Sections 37, 40, 43, and 46"                                                                                       
     Insert "Sections 34, 37, 40, and 43"                                                                                       
                                                                                                                                
     Page 34, line 24:                                                                                                          
     Delete "secs. 54 - 58"                                                                                                     
     Insert "secs. 50 - 54"                                                                                                     
                                                                                                                                
Vice-Chair Neuman OBJECTED for discussion.                                                                                      
                                                                                                                                
Representative  Gara discussed  Amendment 5.  He appreciated                                                                    
Amendment  4, which  preserved the  current tenure  rule for                                                                    
smaller  communities of  5500 people  or fewer.  He believed                                                                    
that the  comments made by Representative  Edgmon applied to                                                                    
all teachers. Attracting the best  teachers in Alaska was of                                                                    
primary importance,  yet the  state created  roadblocks over                                                                    
the  years by  eliminating the  pension system.  He believed                                                                    
that altering  the tenure schedule would  further complicate                                                                    
the process of attracting teachers to Alaska.                                                                                   
                                                                                                                                
Representative  Gara addressed  myths  about tenure.  Tenure                                                                    
allowed employment  protection. A  sub-par teacher  could be                                                                    
eliminated even if  they had tenure. A  tenured teacher that                                                                    
did  not  follow  school   district  standards  to  increase                                                                    
academic achievement  could be  fired. Tenure would  allow a                                                                    
teacher  to  keep their  job  if  performance was  good.  He                                                                    
opined that the delay of  tenure sent the message to teacher                                                                    
that even  if they  perform well,  they could  be terminated                                                                    
without reason.                                                                                                                 
                                                                                                                                
2:39:20 PM                                                                                                                    
                                                                                                                                
Representative   Wilson  wished   that  an   underperforming                                                                    
teacher  could  be eliminated  so  easily.  She stated  that                                                                    
eliminating  a  teacher  with tenure  included  a  long  and                                                                    
drawn-out process  with many checks  and balances.  A poorly                                                                    
performing  teacher could  remain in  the classroom  for one                                                                    
year  or  longer  before  the  necessary  documentation  was                                                                    
obtained.  Districts wished  for  a larger  pool of  tenured                                                                    
teachers to  allow for good  choices. She added  that unions                                                                    
were available  to protect the  teachers. She  believed that                                                                    
the  schools  deserved  flexibility to  allow  education  to                                                                    
function  at  a  higher  level.  She  advocated  for  voting                                                                    
against the amendment.                                                                                                          
                                                                                                                                
2:43:13 PM                                                                                                                    
                                                                                                                                
Representative   Costello  stated   that  she   opposed  the                                                                    
amendment. She  noted rare instances when  teachers were not                                                                    
performing. She  believed that five-year tenure  would allow                                                                    
a  district  to  determine  that a  teacher  was  performing                                                                    
appropriately  or help  them  to  increase performance.  She                                                                    
felt that  her vote against  the amendment was one  in favor                                                                    
of students.                                                                                                                    
                                                                                                                                
2:44:27 PM                                                                                                                    
                                                                                                                                
Representative   Guttenberg   believed  that   a   teacher's                                                                    
performance  was  determined  in  a  relatively  short  time                                                                    
frame.   He  stated   that  urban   schools  faced   similar                                                                    
attraction  and   retention  problems  that   rural  schools                                                                    
encountered. He expressed support for the amendment.                                                                            
                                                                                                                                
2:46:39 PM                                                                                                                    
                                                                                                                                
Representative Gara  clarified that a teacher  could be laid                                                                    
off for  good-cause reasons. Without tenure,  a person could                                                                    
be let  go for no reason  whatsoever. He pointed out  that a                                                                    
person  could not  be  fired because  of  religion, race  or                                                                    
gender. He stated that the  best teachers would not be drawn                                                                    
to Alaska with  the tenure practice defined  in the proposed                                                                    
legislation.                                                                                                                    
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Munoz, Edgmon, Gara, Guttenberg                                                                                       
OPPOSED:   Holmes,  Neuman,   Thompson,  Wilson,   Costello,                                                                    
Stoltze                                                                                                                         
                                                                                                                                
The MOTION FAILED (4/6).                                                                                                        
                                                                                                                                
2:49:55 PM                                                                                                                    
                                                                                                                                
Representative Wilson MOVED to ADOPT Amendment 6, 28-                                                                           
GH2716\G.21, Luckhaupt/Mischel, 4/1/14 by Representative                                                                        
Tammie Wilson and Representative Bill Stoltze, (copy on                                                                         
file):                                                                                                                          
                                                                                                                                
     Page 1, line 2, following "education;":                                                                                    
     Insert  "relating to  the powers  of the  Department of                                                                    
     Education and Early Development;"                                                                                          
                                                                                                                                
     Page 3, following line 18:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "* Sec. 3.  AS 14.03.083  is amended by adding a new                                                                    
     subsection to read:                                                                                                        
     (d)   The department and  the state Board  of Education                                                                    
     and Early  Development may  not enter  into or  renew a                                                                    
     contract  or   agreement,  or  participate,   with  any                                                                    
     organization,  entity, group,  or consortium  after the                                                                    
     effective date of this section  that requires the state                                                                    
     to  cede  any  measure  of  autonomy  or  control  over                                                                    
     education  standards  and  assessments,  including  the                                                                    
     determination of passing scores."                                                                                          
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 8, line 8, following "department":                                                                                    
     Insert "may  not spend money on  implementing standards                                                                  
     that  are  based on  the  Common  Core State  Standards                                                                  
     Initiative and"                                                                                                          
                                                                                                                                
     Page 14, line 23:                                                                                                          
     Delete "sec. 18"                                                                                                           
     Insert "sec. 19"                                                                                                           
                                                                                                                                
     Page 14, line 26:                                                                                                          
     Delete "secs. 18 and 19"                                                                                                   
     Insert "secs. 19 and 20"                                                                                                   
                                                                                                                                
     Page 33, line 29:                                                                                                          
     Delete "Sections 22 - 24"                                                                                                  
     Insert "Sections 23 - 25"                                                                                                  
                                                                                                                                
     Page 33, lines 30 - 31:                                                                                                    
     Delete "secs. 22 - 24"                                                                                                     
     Insert "secs. 23 - 25"                                                                                                     
                                                                                                                                
     Page 34, line 3:                                                                                                           
     Delete "Sections 5 and 6"                                                                                                  
     Insert "Sections 6 and 7"                                                                                                  
                                                                                                                                
     Page 34, line 18:                                                                                                          
     Delete "Sections 22 - 24, 28, 50, and 52"                                                                                  
     Insert "Sections 23 - 25, 29, 51, and 53"                                                                                  
                                                                                                                                
     Page 34, line 20:                                                                                                          
     Delete "Sections 16, 25, 27, and 33 - 35"                                                                                  
     Insert "Sections 17, 26, 28, and 34 - 36"                                                                                  
                                                                                                                                
     Page 34, line 21:                                                                                                          
     Delete "19, and 29 - 31"                                                                                                   
     Insert "20, and 30 - 32"                                                                                                   
                                                                                                                                
     Page 34, line 22:                                                                                                          
     Delete "Section 20"                                                                                                        
     Insert "Section 21"                                                                                                        
                                                                                                                                
     Page 34, line 23:                                                                                                          
     Delete "Sections 37, 40, 43, and 46"                                                                                       
     Insert "Sections 38, 41, 44, and 47"                                                                                       
                                                                                                                                
     Page 34, line 24:                                                                                                          
     Delete "secs. 54 - 58"                                                                                                     
     Insert "secs. 55 - 59"                                                                                                     
                                                                                                                                
Vice-Chair Neuman OBJECTED for discussion.                                                                                      
                                                                                                                                
Representative  Wilson  discussed   the  Common  Core  State                                                                    
Standards  Initiatives. She  noted  that  other states  were                                                                    
backing  out  of  participation  because of  the  cost.  The                                                                    
amendment  added language  enforcing  Alaska's autonomy  and                                                                    
control over education standards and assessments.                                                                               
                                                                                                                                
Co-Chair Stoltze  stated that the amendment  implemented the                                                                    
policy stated by the administration.                                                                                            
                                                                                                                                
2:51:18 PM                                                                                                                    
                                                                                                                                
Representative Holmes understood that  the amendment did not                                                                    
affect the practice of individual school districts.                                                                             
                                                                                                                                
Representative  Wilson appreciated  the  question and  noted                                                                    
that the  Common Core state standards  initiative applied to                                                                    
the  state  alone.  School   districts  would  retain  local                                                                    
control.                                                                                                                        
                                                                                                                                
Representative Gara stated that  no discussion regarding the                                                                    
Common  Core  State  Standards  Initiative  occurred  during                                                                    
House  Finance  Committee  hearings. He  recalled  that  the                                                                    
commissioner  supported  the  initiatives.  He  argued  that                                                                    
small school  districts lacked the funding  to develop their                                                                    
own  curriculum.  The  Department  of  Education  and  Early                                                                    
Development  was  assisting  those  smaller  districts  with                                                                    
implementing the  standards. The amendment might  allow some                                                                    
districts  to implement  the standards,  while others  might                                                                    
not  afford to.  By  deleting state  assistance, the  option                                                                    
might be  eliminated for those  districts interested  in the                                                                    
Common Core State Standard Initiative.                                                                                          
                                                                                                                                
2:54:06 PM                                                                                                                    
                                                                                                                                
Representative   Wilson  replied   that  the   Alaska  state                                                                    
standards were  already adopted while the  Common Core State                                                                    
Standards Initiative  had not been  adopted. She  noted that                                                                    
assistance  from the  department  would  include the  Alaska                                                                    
state standards  only. The department would  allow districts                                                                    
to adopt the Alaska state standards.                                                                                            
                                                                                                                                
Co-Chair   Stoltze  stated   that  pointed   questions  were                                                                    
directed  to  the  commissioner regarding  the  Common  Core                                                                    
State   Standards  Initiative   in   recent  House   Finance                                                                    
Committee meetings.  The amendment cleared up  the ambiguity                                                                    
encountered in the earlier hearing.  He noted that the issue                                                                    
was discussed in other committees.                                                                                              
                                                                                                                                
Representative  Guttenberg   asked  about   the  amendment's                                                                    
intent. He wondered if amendment  addressed both private and                                                                    
public schools.                                                                                                                 
                                                                                                                                
Representative  Wilson  replied  that the  state  could  not                                                                    
negotiate  a  contract  furthering  the  Common  Core  State                                                                    
Standards  Initiative.  Assistance  with  the  Alaska  state                                                                    
standards was readily available.                                                                                                
                                                                                                                                
2:57:05 PM                                                                                                                    
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Munoz,   Neuman,   Thompson,   Wilson,   Costello,                                                                    
Edgmon, Gara, Guttenberg, Holmes, Stoltze                                                                                       
OPPOSED: None                                                                                                                   
                                                                                                                                
The MOTION PASSED (10/0).                                                                                                       
                                                                                                                                
2:58:20 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:12:01 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Stoltze MOVED to ADOPT Amendment 2, 28-                                                                                
GH2716\G.19, Mischel, 4/1/14 by Representative Neuman (copy                                                                     
on file):                                                                                                                       
                                                                                                                                
     Page 18, lines 6 - 31:                                                                                                     
     Delete all material and insert:                                                                                            
      "* Sec. 29. AS 23.15.835(e) is amended to read:                                                                           
     (e)   The institutions  receiving funding under  (d) of                                                                    
     this   section  shall   provide   an  expenditure   and                                                                    
     performance report  to the department by  November 1 of                                                                    
     each year that includes [THE]                                                                                              
     (1)    the percentage  of  former  participants in  the                                                                  
     program  who  have  jobs one  year  after  leaving  the                                                                    
     program;                                                                                                                   
     (2)   the median wage  of former participants  seven to                                                                  
     12 months after leaving the program;                                                                                       
     (3)   the  percentage of  former participants  who were                                                                  
     employed  after   leaving  the  program   who  received                                                                    
     training  under   the  program  that  was   related  or                                                                    
     somewhat  related  to  the  former  participants'  jobs                                                                    
     seven to 12 months after leaving the program;                                                                              
     (4)  a description  of each vocational education course                                                                  
     funded through  the allocation set  out in (d)  of this                                                                  
     section that permits high school  students to earn dual                                                                  
     credit upon  course completion, and the  number of high                                                                  
     school  students who  earned  dual credit  in the  past                                                                  
     year;                                                                                                                    
     (5)   a copy of any  articulation agreement established                                                                  
     under (g)  of this  section that  either was  in effect                                                                  
     for the  preceding year or  is in process for  the next                                                                  
     year  of  funding,  and  the   number  of  high  school                                                                  
     students   who   earned    dual   credit   under   each                                                                  
     articulation agreement; and                                                                                              
     (6)   the performance and financial  information needed                                                                  
     to verify  the performance of the  program as specified                                                                  
     by the  department by regulation [PERCENTAGE  OF FORMER                                                                  
     PARTICIPANTS  WHO INDICATE  SOME LEVEL  OF SATISFACTION                                                                    
     WITH THE TRAINING RECEIVED UNDER THE PROGRAM; AND                                                                          
     (5)  PERCENTAGE OF  EMPLOYERS WHO INDICATE SATISFACTION                                                                    
     WITH THE SERVICES PROVIDED THROUGH THE PROGRAM]."                                                                          
                                                                                                                                
Representative   Costello  objected   for  the   purpose  of                                                                    
discussion.                                                                                                                     
                                                                                                                                
Co-Chair  Stoltze  discussed  the amendment,  which  removed                                                                    
redundant reporting requirements.                                                                                               
                                                                                                                                
3:12:49 PM                                                                                                                    
                                                                                                                                
Representative   Costello   expressed   comfort   with   the                                                                    
amendment    that   removed    the   additional    reporting                                                                    
requirements.  The  information   deemed  appropriate  would                                                                    
continue to be reported to the legislature.                                                                                     
                                                                                                                                
3:13:39 PM                                                                                                                    
                                                                                                                                
Representative Costello WITHDREW  her OBJECTION. There being                                                                    
NO OBJECTION, it was so ordered. Amendment 2 was adopted.                                                                       
                                                                                                                                
3:14:04 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze MOVED to  ADOPT Amendment 1, 28-GH2716\G.1,                                                                    
Mischel,  4/1/14 by  Representative Bill  Stoltze, (copy  on                                                                    
file):                                                                                                                          
                                                                                                                                
     Page 19, line 1:                                                                                                           
     Delete "a new subsection"                                                                                                  
     Insert "new subsections"                                                                                                   
                                                                                                                                
     Page 19, following line 4:                                                                                                 
     Insert a new subsection to read:                                                                                           
     "(h)   An institution's failure  to comply with  (e) or                                                                    
     (g)  of  this section  shall  result  in a  withholding                                                                    
     penalty of  20 percent  of the funding  allocated under                                                                    
     (d) of this section in the following year."                                                                                
                                                                                                                                
Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Co-Chair  Stoltze  discussed  the  amendment  reinserting  a                                                                    
provision  approved by  the  education  committee. He  noted                                                                    
that  the  20  percent  penalty  was  inadvertently  removed                                                                    
during the drafting of the  omnibus bill. The administration                                                                    
supported the penalty. He stated  that he supported a higher                                                                    
penalty, but deferred  to the greater judgment  for the bill                                                                    
that would be  extended for three years. He  stated that the                                                                    
penalty  would encourage  better  compliance, adherence  and                                                                    
performance.                                                                                                                    
                                                                                                                                
Representative Wilson WITHDREW her OBJECTION                                                                                    
                                                                                                                                
Representative Gara OBJECTED for  discussion. He asked about                                                                    
the  20   percent  penalty  for   failure  to   comply  with                                                                    
subsection  (e) or  (g) of  the section.  He asked  for more                                                                    
information about the subsections.                                                                                              
                                                                                                                                
3:16:23 PM                                                                                                                    
                                                                                                                                
DIANNE  BLUMER,   COMMISSIONER,  DEPARTMENT  OF   LABOR  AND                                                                    
WORKFORCE DEVELOPMENT,  stated that subsection  (e) outlined                                                                    
numbers  one  through three  in  Amendment  2 including  the                                                                    
percentage  of  former  participants,  the  median  wage  of                                                                    
former  participants and  the  former participants  employed                                                                    
after leaving  the program. She  stated that  subsection (g)                                                                    
addressed  the   articulation  agreement  proposed   by  the                                                                    
governor.                                                                                                                       
                                                                                                                                
Representative Gara  asked if the penalty  was for education                                                                    
institutions.                                                                                                                   
                                                                                                                                
Co-Chair Stoltze  informed the  committee that  finding jobs                                                                    
for  people  in  their  field was  relevant  to  a  training                                                                    
program.                                                                                                                        
                                                                                                                                
Representative Gara  stated that  he did not  understand the                                                                    
commissioner's statements.                                                                                                      
                                                                                                                                
Commissioner  Blumer replied  that  the subsections  allowed                                                                    
for  the withholding  of  funds if  an  institution did  not                                                                    
provide  the  information  outlined   in  the  statute.  She                                                                    
explained that the department  had past difficulty obtaining                                                                    
information  from some  of the  institutions. The  amendment                                                                    
allowed for a consequence in such situations.                                                                                   
                                                                                                                                
Co-Chair  Stoltze noted  the  difficulty  in measuring  some                                                                    
programs.                                                                                                                       
                                                                                                                                
Representative Gara WITHDREW his  OBJECTION. Amendment 1 was                                                                    
ADOPTED.                                                                                                                        
                                                                                                                                
3:19:35 PM                                                                                                                    
                                                                                                                                
Representative  Gara  MOVED  to   ADOPT  Amendment  14,  28-                                                                    
GH2716\G.7,  Mischel,  4/1/14  by  Representative  Gara  and                                                                    
Representative Guttenberg, (copy on file):                                                                                      
                                                                                                                                
     Page 1, line 2, following "education;":                                                                                    
     Insert  "relating to  the exemption  from jury  service                                                                    
     for certain teachers;"                                                                                                     
                                                                                                                                
     Page 2, following line 6:                                                                                                  
     Insert a new bill section to read:                                                                                         
        "* Section 1. AS 09.20.030(b) is amended to read:                                                                       
     (b)  A person may  claim exemption and shall be excused                                                                    
     by the court from service  as a juror during the school                                                                    
     term if it  is shown that the person is  a teacher in a                                                                    
     school that  is designated  as a low  performing school                                                                  
     under  regulations  adopted  by   the  state  Board  of                                                                  
     Education  and  Early   Development  [FAILING  TO  MAKE                                                                  
     ADEQUATE YEARLY  PROGRESS UNDER P.L. 107-110].  In this                                                                    
     subsection,  "teacher"  means  a person  who  serves  a                                                                    
     school district  in a teaching capacity  in a classroom                                                                    
     setting and is required to  be certificated in order to                                                                    
     hold the position."                                                                                                        
                                                                                                                                
     Page 2, line 7:                                                                                                            
     Delete "Section 1"                                                                                                         
     Insert "Sec. 2"                                                                                                            
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 14, line 23:                                                                                                          
     Delete "sec. 18"                                                                                                           
     Insert "sec. 19"                                                                                                           
                                                                                                                                
     Page 14, line 26:                                                                                                          
     Delete "secs. 18 and 19"                                                                                                   
     Insert "secs. 19 and 20"                                                                                                   
                                                                                                                                
     Page 33, line 29:                                                                                                          
     Delete "Sections 22 - 24"                                                                                                  
     Insert "Sections 23 - 25"                                                                                                  
                                                                                                                                
     Page 33, lines 30 - 31:                                                                                                    
     Delete "secs. 22 - 24"                                                                                                     
     Insert "secs. 23 - 25"                                                                                                     
                                                                                                                                
     Page 34, line 3                                                                                                            
     Delete "Sections 5 and 6"                                                                                                  
     Insert "Sections 6 and 7"                                                                                                  
                                                                                                                                
     Page 34, line 18:                                                                                                          
     Delete "Sections 22 - 24, 28, 50, and 52"                                                                                  
     Insert "Sections 23 - 25, 29, 51, and 53"                                                                                  
                                                                                                                                
     Page 34, line 20:                                                                                                          
     Delete "Sections 16, 25, 27, and 33 - 35"                                                                                  
     Insert "Sections 17, 26, 28, and 34 - 36"                                                                                  
                                                                                                                                
     Page 34, line 21:                                                                                                          
     Delete "Sections 1, 19, and 29 - 31"                                                                                       
     Insert "Sections 2, 20, and 30 - 32"                                                                                       
                                                                                                                                
     Page 34, line 22:                                                                                                          
     Delete "Section 20"                                                                                                        
     Insert "Section 21"                                                                                                        
                                                                                                                                
     Page 34, line 23:                                                                                                          
     Delete "Sections 37, 40, 43, and 46"                                                                                       
     Insert "Sections 38, 41, 44, and 47"                                                                                       
                                                                                                                                
     Page 34, line 24:                                                                                                          
     Delete "secs. 54 - 58"                                                                                                     
     Insert "secs. 55 - 59"                                                                                                     
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
Representative Gara discussed the  amendment. He stated that                                                                    
teachers were  exempted from jury service  in low-performing                                                                    
schools.  The  law  defining the  exemption  was  no  longer                                                                    
applicable.  He stated  that schools  that  failed under  No                                                                    
Child Left  Behind to meet adequate  yearly progress allowed                                                                    
teachers to  be exempted from  jury service. He  stated that                                                                    
adequate  yearly  progress was  no  longer  used in  Alaska,                                                                    
which  eliminated   the  exemption.   He  stated   that  the                                                                    
amendment  reestablished the  jury service  exemption for  a                                                                    
low-performing  school  under  regulations  adopted  by  the                                                                    
state board  of education and early  development. The stated                                                                    
would determine the definition of low-performing schools.                                                                       
                                                                                                                                
3:21:35 PM                                                                                                                    
                                                                                                                                
Representative   Holmes   expressed   concern   about   jury                                                                    
selection.  She asked  if the  teachers  were available  for                                                                    
jury duty in the summer months.                                                                                                 
                                                                                                                                
3:22:34 PM                                                                                                                    
                                                                                                                                
Representative  Edgmon stated  that in  Dillingham the  jury                                                                    
pool  extended to  multiple communities.  He explained  that                                                                    
the smaller communities  would not have the  ability to draw                                                                    
from one small community alone.                                                                                                 
                                                                                                                                
Representative  Holmes  wondered  whether the  employee  was                                                                    
excused from jury duty or deferred until a summer break.                                                                        
                                                                                                                                
Co-Chair  Stoltze   expressed  an  issue  with   "picking  a                                                                    
profession."  He stated  that other  professions do  not get                                                                    
paid for their time off like teachers do.                                                                                       
                                                                                                                                
3:25:01 PM                                                                                                                    
                                                                                                                                
Representative Wilson  acknowledged that the  smaller school                                                                    
districts operated  without substitute teachers.  She shared                                                                    
the   sentiment  and   question  of   Representative  Holmes                                                                    
regarding a deferral of service for teachers.                                                                                   
                                                                                                                                
3:26:04 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg pointed  out  that the  amendment                                                                    
was  directed to  the  school  term. He  noted  that he  was                                                                    
regularly  called  for  jury  duty.  He  believed  that  the                                                                    
amendment  was   clear  and  simple  allowing   teachers  to                                                                    
structure time off around jury duty.                                                                                            
                                                                                                                                
3:27:25 PM                                                                                                                    
                                                                                                                                
DOUG WOOLIVER, DEPUTY  ADMINISTRATIVE DIRECTOR, ALASKA COURT                                                                    
SYSTEM,  responded to  Representative  Holmes' question.  He                                                                    
stated that jury  duty was generally deferred  to the summer                                                                    
periods for those teachers once exempted.                                                                                       
                                                                                                                                
Representative Holmes  clarified that the amendment  did not                                                                    
excuse  the  jury  duty  service  for  teachers;  it  simply                                                                    
deferred it to the summer period.                                                                                               
                                                                                                                                
Mr. Wooliver replied yes.                                                                                                       
                                                                                                                                
Representative Gara pointed out  that other professions were                                                                    
excused from jury service as well.                                                                                              
                                                                                                                                
3:28:43 PM                                                                                                                    
                                                                                                                                
Representative  Edgmon  asked if  the  judge  could allow  a                                                                    
deferral for a teacher in a high-performing school as well.                                                                     
                                                                                                                                
Mr.  Wooliver  responded  that  a  teacher  always  had  the                                                                    
ability to request a deferral.                                                                                                  
                                                                                                                                
3:29:30 PM                                                                                                                    
                                                                                                                                
Representative   Holmes  understood   the   intent  of   the                                                                    
amendment. She was on jury  duty deferral herself, which she                                                                    
understood was the right of every Alaskan citizen.                                                                              
                                                                                                                                
3:30:34 PM                                                                                                                    
                                                                                                                                
Mr.  Wooliver replied  that portions  of the  state required                                                                    
serving  on   jury  duty  for   one  full  year.   In  those                                                                    
circumstances,  the law  allowed  the  teacher an  exemption                                                                    
from serving  on trials that  arose during the  school year.                                                                    
Those teachers  would continue to  be subject  to summertime                                                                    
trials.                                                                                                                         
                                                                                                                                
Co-Chair Stoltze  joked that juries were  filled with people                                                                    
that were not smart enough to  avoid jury duty. He deemed it                                                                    
short-sighted to take the best  and the brightest (teachers)                                                                    
out of the jury pool.                                                                                                           
                                                                                                                                
3:31:58 PM                                                                                                                    
                                                                                                                                
Representative Gara  stated that  the teachers  would remain                                                                    
in the jury pool outside of the school term.                                                                                    
                                                                                                                                
3:32:25 PM                                                                                                                    
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Guttenberg,  Holmes,   Wilson,  Costello,  Edgmon,                                                                    
Gara, Stoltze                                                                                                                   
OPPOSED: Munoz, Stoltze                                                                                                         
                                                                                                                                
The MOTION PASSED (6/2).                                                                                                        
                                                                                                                                
Amendment 14 was adopted.                                                                                                       
                                                                                                                                
3:33:46 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:36:57 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative  Holmes  MOVED  to ADOPT  Amendment  19,  28-                                                                    
GH2716\G.23,   Gardner/Mischel,  4/2/14   by  Representative                                                                    
Holmes (copy on file):                                                                                                          
                                                                                                                                
     Page 34, line 18:                                                                                                          
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     Page 34, line 21, following "19,":                                                                                         
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Representative Wilson OBJECTED for discussion.                                                                                  
                                                                                                                                
Representative  Holmes discussed  the  amendment. She  noted                                                                    
that  the   bill's  tenure   provisions  had   an  immediate                                                                    
effective date.  The amendment moved  the effective  date of                                                                    
the  tenure provisions  from  the  immediate effective  date                                                                    
section into  a section  taking effect  July 1,  2015, which                                                                    
would allow school districts time for the transition.                                                                           
                                                                                                                                
Co-Chair Stoltze  stated that an  effective date of  July 1,                                                                    
2014 would provide a better compromise for the provision.                                                                       
                                                                                                                                
Representative  Wilson  added   that  procedures  would  not                                                                    
change, so the additional time was unnecessary.                                                                                 
                                                                                                                                
Co-Chair  Stoltze noted  that  seven  school districts  were                                                                    
addressed.                                                                                                                      
                                                                                                                                
Representative  Holmes  agreed  that   the  removal  of  the                                                                    
provision   allowing   for   district  adaptation   to   the                                                                    
subsequent  five   year  alleviated  the  majority   of  her                                                                    
concern. She proposed a compromise.                                                                                             
                                                                                                                                
Representative Holmes MOVED to  AMEND Amendment 19 by adding                                                                    
July 1, 2014 as the  effective date for the tenure sections.                                                                    
There being NO  OBJECTION, it was so  ordered. The amendment                                                                    
as amended was before the committee.                                                                                            
                                                                                                                                
Representative Gara  OBJECTED for discussion. He  noted that                                                                    
multiple   committee  members   voted  against   the  tenure                                                                    
provisions in  the proposed legislation. He  opined that the                                                                    
additional time  would be advantageous  for the  process and                                                                    
transition. He  then removed his  objection. There  being NO                                                                    
further  OBJECTION,  it was  so  ordered.  Amendment 19,  as                                                                    
amended with the July 1,  2014 effective date was ADOPTED by                                                                    
the committee.                                                                                                                  
                                                                                                                                
4:41:17 PM                                                                                                                    
                                                                                                                                
Representative  Gara   MOVED  to  ADOPT  Amendment   13,  by                                                                    
Representative Gara and  Representative Guttenberg, (copy on                                                                    
file).                                                                                                                          
                                                                                                                                
     Page 34, lines 14-17:                                                                                                      
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Vice-Chair Neuman OBJECTED for discussion.                                                                                      
                                                                                                                                
Representative  Gara   MOVED  to  AMEND  Amendment   13.  He                                                                    
requested a change from lines 14-17  to lines 12 - 17. There                                                                    
being  NO OBJECTION,  it was  so ordered.  The amendment  to                                                                    
Amendment  13  was  adopted. Amendment  13  as  amended  was                                                                    
before the committee.                                                                                                           
                                                                                                                                
4:43:00 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg  stated   that  the  three  lines                                                                    
comprising   Amendment   13   allowed  the   Department   of                                                                    
Administration to  implement salary and benefits  for school                                                                    
districts. He  believed that salaries and  benefits ought to                                                                    
remain  local options  that school  districts could  discern                                                                    
independently. His  rural districts stressed the  ability to                                                                    
attract  and  obtain  school  employees.  He  discussed  the                                                                    
process  initiated in  the  proposed  legislation where  the                                                                    
legislature would  determine the  salaries and  benefits for                                                                    
districts statewide.                                                                                                            
                                                                                                                                
Representative Guttenberg  compared the  proposal in  the CS                                                                    
to federal  overreach. He opined that  legislators in Juneau                                                                    
would  not make  the best  decisions for  the smaller  rural                                                                    
districts.  Removing   the  section,  as  proposed   in  the                                                                    
amendment  would  allow  the districts  to  make  their  own                                                                    
decisions about matters such as salaries and benefits.                                                                          
                                                                                                                                
4:46:50 PM                                                                                                                    
                                                                                                                                
Representative   Costello   stated  that   the   legislation                                                                    
requested  a written  proposal  from  school districts.  She                                                                    
highlighted  the  problem  of  rising  costs  in  the  state                                                                    
operating budget, with the target  of zero percent increase.                                                                    
She spoke about  education as one of the  major cost drivers                                                                    
in the state  budget. She thought that  the section included                                                                    
in the  legislation was a  responsible measure  requesting a                                                                    
simple  proposal   for  legislative  consideration   of  the                                                                    
highest  drivers   of  state  cost.  She   opined  that  the                                                                    
oversight would  be prudent and responsible.  She added that                                                                    
the legislation, as written would  consume 28 percent of the                                                                    
state's  reserves in  the next  ten years.  She pointed  out                                                                    
that the  legislature had a great  responsibility to address                                                                    
the costs. She  preferred to address the  cost of healthcare                                                                    
rather than cut teacher positions  each year. She would vote                                                                    
against  the amendment  because  she felt  that the  written                                                                    
proposal  would  allow  the legislature  to  discern  proper                                                                    
spending for school districts.                                                                                                  
                                                                                                                                
4:49:51 PM                                                                                                                    
                                                                                                                                
Representative Wilson discussed  the geographic differential                                                                    
determined  in last  year's session  that allowed  different                                                                    
areas of the state to  best determine salaries and benefits.                                                                    
She  mentioned the  process with  the  union that  increased                                                                    
costs for  employees forcing districts to  lay-off teachers.                                                                    
She believed  that the section  in question would  allow the                                                                    
legislature to  receive information  from the  Department of                                                                    
Administration  regarding cost  drivers.  She believed  that                                                                    
the  districts  were  at a  disadvantage  because  of  their                                                                    
dependence on state funds.                                                                                                      
                                                                                                                                
4:52:57 PM                                                                                                                    
                                                                                                                                
Representative  Gara discussed  the oversight  leading to  a                                                                    
potential teacher  salary that would limit  teacher salaries                                                                    
to the point  that the state would not attract  the best and                                                                    
brightest  teachers to  Alaska.  He  stated that  inadequate                                                                    
salaries  and  funding  was  the  recipe  for  disaster.  He                                                                    
discussed  Representative  Wilson's  comment  regarding  the                                                                    
requested 2  percent increase. He  noted that  the inability                                                                    
to  provide  a 2  percent  increase  for teachers  sent  the                                                                    
message to teachers that their  salaries would not keep pace                                                                    
with inflation. He stressed that  school districts should be                                                                    
allowed  the power  and authority  to hire  transformational                                                                    
teachers  and  principals.  He stressed  that  a  2  percent                                                                    
increase for teachers was more than acceptable.                                                                                 
                                                                                                                                
4:55:38 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg stated  that the  superintendents                                                                    
and  finance  directors might  not  have  realized that  the                                                                    
legislature would address their  salaries as well, since the                                                                    
review  would  include  all areas  of  the  legislature.  He                                                                    
suggested  that the  report would  not define  a teacher  or                                                                    
principal's  performance.  He  stated that  the  legislation                                                                    
would  allow  state  intrusion  into  districts  across  the                                                                    
state. He  added that  some areas of  his district  were far                                                                    
removed from the legislative process in Juneau.                                                                                 
                                                                                                                                
5:01:26 PM                                                                                                                    
                                                                                                                                
Co-Chair   Stoltze  clarified   that  the   amendment  would                                                                    
eliminate language  initiating a salary and  schedule study.                                                                    
The highlighted  schedule would be implemented  in two years                                                                    
with the approval of a future legislature.                                                                                      
                                                                                                                                
Representative Guttenberg concurred.                                                                                            
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gara, Guttenberg                                                                                                      
OPPOSED:  Wilson, Costello,  Edgmon, Holmes,  Munoz, Neuman,                                                                    
Thompson, Stoltze                                                                                                               
                                                                                                                                
The MOTION FAILED (2/8).                                                                                                        
                                                                                                                                
5:02:44 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
5:04:05 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative  Gara  MOVED  to   ADOPT  Amendment  12,  28-                                                                    
GH2716\G.9,  Mischel,  4/1/14  by  Representative  Gara  and                                                                    
Representative Guttenberg (copy on file):                                                                                       
                                                                                                                                
     Page 22, line 27:                                                                                                          
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Vice-Chair Neuman OBJECTED for discussion.                                                                                      
                                                                                                                                
Representative Gara discussed the  amendment. He pointed out                                                                    
an active  system allowing companies to  reduce tax payments                                                                    
to  the  state  by  offering   the  reduced  payment  to  an                                                                    
educational  institution.  In  the  past,  the  funding  was                                                                    
routed  to  public  schools, but  the  proposed  legislation                                                                    
allowed  private  nonprofit  schools  to  receive  the  same                                                                    
funding.  He disagreed  with state  funds routed  to private                                                                    
schools.  He  noted  that   the  constitution  barred  state                                                                    
funding supporting private and religious schools.                                                                               
                                                                                                                                
Co-Chair  Stoltze supported  the  original  language in  the                                                                    
bill because he interpreted a  buffer of state resources. He                                                                    
believed  that the  amendment's intent  spoke volumes  about                                                                    
the  values of  the sponsors  regarding tax  credits in  the                                                                    
state.                                                                                                                          
                                                                                                                                
Representative Thompson supported  the original language. He                                                                    
pointed out that the  governor's performance scholarship was                                                                    
available  for private  schools and  he saw  the legislation                                                                    
similarly. He would vote against the amendment.                                                                                 
                                                                                                                                
5:08:40 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Neuman discussed  the  importance of  vocational                                                                    
education  programs  in  the  schools.  He  appreciated  the                                                                    
original  language in  the  CS and  would  vote against  the                                                                    
amendment.                                                                                                                      
                                                                                                                                
5:10:22 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze apologized that  he was so passionate about                                                                    
the issue. He promised to  have a calmer disposition for the                                                                    
remainder of the deliberations.                                                                                                 
                                                                                                                                
5:10:50 PM                                                                                                                    
                                                                                                                                
Representative Costello stated  that the committee typically                                                                    
discussed tax credit proposals in  detail. She believed that                                                                    
the  tax  credit  portion  of the  bill  provided  a  strong                                                                    
element.  She   encouraged  activities  funded   with  means                                                                    
alternate  to public  education dollars.  She mentioned  the                                                                    
inclusion  of science  technology, engineering  and math  in                                                                    
the  section discussed.  She believed  that the  tax credits                                                                    
would drive dollars into areas  that would allow students to                                                                    
take advantage of exciting opportunities.  She felt that the                                                                    
identification of  private non-profit added  a strengthening                                                                    
measure to the bill. She  stated that she would vote against                                                                    
the amendment.                                                                                                                  
                                                                                                                                
5:12:34 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg  appreciated the  chair's passion.                                                                    
He  stated that  he  attended a  religious  school for  five                                                                    
years  and his  parents  did  not expect  the  state to  pay                                                                    
tuition. He  supported tax  credits for  vocational schools.                                                                    
He  expressed   concern  with  the   broad  nature   of  the                                                                    
identification of private non-profit,  which might lead to a                                                                    
voucher system for the state education system.                                                                                  
                                                                                                                                
5:14:19 PM                                                                                                                    
                                                                                                                                
Representative Gara apologized  to Representative Wilson for                                                                    
his animated nature.                                                                                                            
                                                                                                                                
Co-Chair Stoltze  commented that  the finance  committee was                                                                    
similar to a family.                                                                                                            
                                                                                                                                
Representative  Gara stated  that he  would be  less worried                                                                    
about the amendment if the  state had ample reserves. If tax                                                                    
revenue was  diverted from  both the  general fund  and from                                                                    
public  schools to  religious and  private schools,  further                                                                    
underfunding of  public education would result.  He stressed                                                                    
that  the bill,  as  written assumed  no  state deficit.  He                                                                    
disagreed with the funding of  private schools during a time                                                                    
of budget constraints.                                                                                                          
                                                                                                                                
5:16:57 PM                                                                                                                    
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gara, Guttenberg                                                                                                      
OPPOSED: Costello, Edgmon,  Holmes, Munoz, Neuman, Thompson,                                                                    
Wilson, Stoltze                                                                                                                 
                                                                                                                                
The MOTION FAILED (2/8).                                                                                                        
                                                                                                                                
5:17:54 PM                                                                                                                    
                                                                                                                                
Representative  Holmes  MOVED  to ADOPT  Amendment  20,  28-                                                                    
GH2716\G.22,   Gardner/Mischel,  4/2/14   by  Representative                                                                    
Holmes, (copy on file):                                                                                                         
                                                                                                                                
     Page 14, line 21:                                                                                                          
     Delete "$5,865"                                                                                                            
     Insert "$5,965"                                                                                                            
                                                                                                                                
     Page 14, lines 24 - 25:                                                                                                    
     Delete "$5,923 [$5,865]"                                                                                                   
     Insert "$6,065 [$5,965]"                                                                                                   
                                                                                                                                
     Page 14, lines 27 - 28:                                                                                                    
     Delete "$5,981 [$5,923]"                                                                                                   
     Insert "$6,165 [$6,065]"                                                                                                   
                                                                                                                                
Vice-Chair Neuman OBJECTED for discussion.                                                                                      
                                                                                                                                
Representative Holmes discussed  the Base Student Allocation                                                                    
(BSA) increase.  She noted that  the amendment would  add an                                                                    
additional $100 for years one and two.                                                                                          
                                                                                                                                
5:20:08 PM                                                                                                                    
                                                                                                                                
Representative  Gara  discussed  the  claim  that  the  bill                                                                    
proposed a  $185 Base Student Allocation  (BSA) increase. He                                                                    
noted that $25  million would be eliminated  from the budget                                                                    
allowing  for an  $85 BSA.  The amendment  would reestablish                                                                    
the $185 BSA increase. He  cited the numbers provided by the                                                                    
Legislative Finance  Division's interactive charts,  and the                                                                    
various state  areas' increases and deficits.  He planned to                                                                    
vote for any  proposed increase to the  education budget. He                                                                    
acknowledged  that  the  amendment would  not  move  schools                                                                    
forward. He detailed the  various state districts' financial                                                                    
responses  to the  increase. He  opined  that the  amendment                                                                    
improved the  bill, although the  increases would  result in                                                                    
cuts overall.  He stressed that  the legislature  could make                                                                    
education a greater priority.                                                                                                   
                                                                                                                                
5:23:57 PM                                                                                                                    
                                                                                                                                
Representative Costello expressed  concern that the progress                                                                    
achieved in the bill would  be negated by the amendment. She                                                                    
mentioned  the other  body's  proposal  of one-time  funding                                                                    
equivalent to a  BSA increase greater than  that proposed in                                                                    
the CS. She wondered  if communities wanted one-time funding                                                                    
that  exceeded the  proposal in  the CS  or the  security of                                                                    
funding an  increased BSA. She  stated that the  CS increase                                                                    
equated to a $120 BSA  increase for the majority of students                                                                    
in Alaskan schools. She added  that some districts preferred                                                                    
no BSA increase.  She wished to retain the intent  of the CS                                                                    
and would vote against the amendment.                                                                                           
                                                                                                                                
Representative Munoz  spoke in  favor of the  amendment. She                                                                    
believed that the amendment  compensated for the elimination                                                                    
of the $25 million in one-time funding.                                                                                         
                                                                                                                                
5:27:33 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  commented on  Representative  Gara's                                                                    
interest in Fairbanks.                                                                                                          
                                                                                                                                
Representative  Gara  responded   that  he  represented  the                                                                    
entire state.                                                                                                                   
                                                                                                                                
Representative Wilson  discussed the reality of  the state's                                                                    
restricted budget. She proposed  that the committee wait one                                                                    
year to  evaluate the  bill's success.  She wondered  if the                                                                    
districts might  learn that  diminishing federal  funds also                                                                    
contributed  to school  district  shortfalls. She  expressed                                                                    
discomfort  with  the amendment  and  the  lack of  concrete                                                                    
expectation of state spending. She  wished to converse about                                                                    
changes  made statewide  rather  than  focusing on  separate                                                                    
districts.                                                                                                                      
                                                                                                                                
5:31:08 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze stated  that the CS, as  written would soon                                                                    
comprise 28.2  of the  state's total  savings over  the next                                                                    
decade. He referenced  the funding added to the  BSA and the                                                                    
popularity   of  base   increases.   He   pointed  out   the                                                                    
compounding  effect  of  the   increases  to  the  base.  He                                                                    
mentioned  the  bracketing  improvements made  in  the  bill                                                                    
which would be diminished by raising the BSA.                                                                                   
                                                                                                                                
5:35:36 PM                                                                                                                    
                                                                                                                                
Representative Holmes thanked the  chair for the latitude to                                                                    
introduce the  amendment at the  late hour.  She deliberated                                                                    
thoroughly  during the  process of  drafting the  amendment.                                                                    
She appreciated  the discussion  and the  CS, but  she would                                                                    
like to see the committee increase the BSA.                                                                                     
                                                                                                                                
5:36:56 PM                                                                                                                    
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Edgmon, Gara, Guttenberg, Holmes, Munoz                                                                               
OPPOSED: Neuman, Thompson, Wilson, Costello, Stoltze                                                                            
                                                                                                                                
The MOTION FAILED (5/5).                                                                                                        
                                                                                                                                
5:38:17 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
5:52:09 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative  Gara  MOVED  to   ADOPT  Amendment  18,  28-                                                                    
GH2716\G.8,  Mischel, 4/1/14  by Representative  Gara, (copy                                                                    
on file):                                                                                                                       
                                                                                                                                
     Page 14, line 21:                                                                                                          
     Delete "$5,865"                                                                                                            
     Insert "$6,084"                                                                                                            
                                                                                                                                
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     Insert "$6,334 [$6,084]"                                                                                                   
                                                                                                                                
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     Insert "$6,584 [$6,334]"                                                                                                   
                                                                                                                                
     Page 14, following line 28:                                                                                                
     Insert new bill sections to read:                                                                                          
        "* Sec. 21. AS 14.17.470 is amended to read:                                                                            
     Sec.  14.17.470.  Base  student  allocation.  The  base                                                                    
     student allocation is $6,184 [$5,680].                                                                                     
        * Sec.  22. AS 14.17.470,  as amended by sec.  21 of                                                                    
     this Act, is amended to read:                                                                                              
     Sec.  14.17.470.  Base  student  allocation.  The  base                                                                    
     student allocation is $6,434 [$6,184].                                                                                     
        * Sec. 23. AS 14.17.470,  as amended by secs. 21 and                                                                    
     22 of this Act, is amended to read:                                                                                        
     Sec.  14.17.470.  Base  student  allocation.  The  base                                                                    
     student allocation is $6,684 [$6,434]."                                                                                    
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 33, line 29:                                                                                                          
     Delete "Sections 22 - 24"                                                                                                  
     Insert "Sections 25 - 27"                                                                                                  
                                                                                                                                
     Page 33, lines 30 - 31:                                                                                                    
     Delete "secs. 22 - 24"                                                                                                     
     Insert "secs. 25 - 27"                                                                                                     
                                                                                                                                
     Page 34, following line 17:                                                                                                
     Insert a new bill section to read:                                                                                         
        "*  Sec. 57.  The  uncodified law  of  the State  of                                                                    
    Alaska is amended by adding a new section to read:                                                                          
     CONTINGENT EFFECT.  (a) Sections  18 -  20 of  this Act                                                                    
     take  effect only  if  the  Twenty-Eighth Alaska  State                                                                    
     Legislature passes  an appropriation bill  that becomes                                                                    
     law  that  appropriates  at least  $25,000,000  to  the                                                                    
     Department  of  Education  and  Early  Development  for                                                                    
     funding  public education  as  state  aid to  districts                                                                    
     according  to the  average  daily  membership for  each                                                                    
     district   adjusted   under  AS   14.17.410(b)(1),   in                                                                    
     addition to K-12 support  provided under the foundation                                                                    
     program.                                                                                                                   
     (b) Sections  21 - 23 of  this Act take effect  only if                                                                    
     the  Twenty-Eighth Alaska  State  Legislature fails  to                                                                    
     pass  an  appropriation  bill  that  becomes  law  that                                                                    
     appropriates at least $25,000,000  to the Department of                                                                    
     Education  and  Early  Development for  funding  public                                                                    
     education as  state aid to  districts according  to the                                                                    
     average  daily membership  for  each district  adjusted                                                                    
     under AS  14.17.410(b)(1), in addition to  K-12 support                                                                    
     provided under the foundation program.                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 34, line 18:                                                                                                          
     Delete "Sections 22 - 24, 28, 50, and 52"                                                                                  
     Insert "Sections 25 - 27, 31, 53, and 55"                                                                                  
                                                                                                                                
     Page 34, line 20:                                                                                                          
     Delete "25, 27, and 33 - 35"                                                                                               
     Insert "28, 30, and 36 - 38"                                                                                               
                                                                                                                                
     Page 34, line 21:                                                                                                          
     Delete "19, and 29 - 31"                                                                                                   
     Insert "and 32 - 34"                                                                                                       
                                                                                                                                
     Page 34, line 22:                                                                                                          
     Delete all material.                                                                                                       
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 34, line 23:                                                                                                          
     Delete "Sections 37, 40, 43, and 46"                                                                                       
     Insert "Sections 40, 43, 46, and 49"                                                                                       
                                                                                                                                
     Page 34, following line 23:                                                                                                
     Insert new bill sections to read:                                                                                          
        "* Sec.  62.  If sec.  18 of this Act  takes effect,                                                                    
     it takes effect July 1, 2014.                                                                                              
        * Sec. 63.  If sec.  19 of this Act takes effect, it                                                                    
     takes effect July 1, 2015.                                                                                                 
        * Sec. 64.  If sec.  20 of this Act takes effect, it                                                                    
     takes effect July 1, 2016.                                                                                                 
        * Sec. 65.  If sec.  21 of this Act takes effect, it                                                                    
     takes effect July 1, 2014.                                                                                                 
        * Sec. 66.  If sec.  22 of this Act takes effect, it                                                                    
     takes effect July 1, 2015.                                                                                                 
        * Sec. 67.  If sec.  23 of this Act takes effect, it                                                                    
     takes effect July 1, 2016."                                                                                                
                                                                                                                                
     Renumber the following bill section accordingly.                                                                           
                                                                                                                                
     Page 34, line 24:                                                                                                          
     Delete "secs. 54 - 58"                                                                                                     
     Insert "secs. 58 - 67"                                                                                                     
                                                                                                                                
Vice-Chair Neuman OBJECTED for discussion.                                                                                      
                                                                                                                                
Representative  Gara explained  that the  amendment retained                                                                    
the $25 million in the budget  and added $404 BSA to current                                                                    
law in  year one with an  additional $200 BSA added  in both                                                                    
year two and  three. Evidence suggested that  a teacher must                                                                    
teach  to the  individual,  while the  common  ratio was  35                                                                    
students  to  one  teacher. He  compared  crowd  control  to                                                                    
education  in classrooms  with  many  students. He  stressed                                                                    
that  Alaska had  failed to  raise  the BSA  since 2011.  He                                                                    
spoke about the schools suffering from layoffs as a result.                                                                     
                                                                                                                                
Representative  Gara  explained  that  the  amendment  would                                                                    
provide every  district in  the state  ample funds  to avoid                                                                    
future cuts and rehire some of  the staff lost over the last                                                                    
three years.  The amendment would  provide money in  the out                                                                    
years to prevent  cuts. He ranked the  prevention of further                                                                    
cuts  to  education  above  many  of  the  state's  proposed                                                                    
megaprojects.  He encouraged  care with  state spending.  He                                                                    
suggested  that  families  would  leave  Alaska  unless  the                                                                    
legislature approved increased education funding.                                                                               
                                                                                                                                
Representative Gara  understood the gravity of  the proposed                                                                    
request, but  he encouraged legislators to  reprioritize. He                                                                    
believed that the state required  an educational system that                                                                    
reduced class sizes.                                                                                                            
                                                                                                                                
5:59:25 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  argued  that education  funding  was                                                                    
increased recently, but  the BSA was the last  number in the                                                                    
multiplier.  She pointed  out  that $2.4  billion was  spent                                                                    
last  year on  education. She  stressed that  while the  BSA                                                                    
remained  the same,  education funding  was appropriated  in                                                                    
various   areas  of   the  budget.   She  stated   that  the                                                                    
diminishment  of students  in  some areas  resulted in  flat                                                                    
spending.  She proposed  transparency  about state  spending                                                                    
for  constituent purposes.  She stated  that she  would vote                                                                    
against the amendment.                                                                                                          
                                                                                                                                
6:03:00 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg  discussed   the  need  to  place                                                                    
funding  into  the  classroom.   One-time  funding  did  not                                                                    
accomplish  the task.  Increasing  the BSA  would allow  the                                                                    
money to be used in the classroom.                                                                                              
                                                                                                                                
6:04:17 PM                                                                                                                    
                                                                                                                                
Representative  Gara   acknowledged  that   the  legislature                                                                    
approved  recent  increases  to  education  related  to  the                                                                    
state's unfunded liability. He pointed  out the loss of over                                                                    
600  teachers,   guidance  counselors,  nurses   and  career                                                                    
counselors. The layoffs outpaced  the loss in student counts                                                                    
over the last  three years. He noted that  the student count                                                                    
remained  relatively stable  over the  last three  years. He                                                                    
pointed  out   that  one-time  funding  did   not  equal  an                                                                    
increase.                                                                                                                       
                                                                                                                                
6:08:12 PM                                                                                                                    
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gara, Guttenberg                                                                                                      
OPPOSED: Holmes, Munoz,  Neuman, Thompson, Wilson, Costello,                                                                    
Edgmon, Stoltze                                                                                                                 
                                                                                                                                
The MOTION FAILED (2/8).                                                                                                        
                                                                                                                                
6:09:25 PM                                                                                                                    
                                                                                                                                
Co-Chair   Stoltze  stated   that   Amendment  21   replaced                                                                    
Amendment 7.                                                                                                                    
                                                                                                                                
Representative  Edgmon  MOVED  to ADOPT  Amendment  21,  28-                                                                    
GH2716\G.24,  Bannister/Mischel,  4/2/14  by  Representative                                                                    
Edgmon,  Representative Gara  and Representative  Guttenberg                                                                    
(copy on file):                                                                                                                 
                                                                                                                                
     Page 14, line 13:                                                                                                          
     Delete "1.62"                                                                                                              
     Insert "1.86 [1.62]"                                                                                                       
                                                                                                                                
     Page 14, line 14:                                                                                                          
     Delete "55.8"                                                                                                              
     Insert "57.2 [55.8]"                                                                                                       
     Delete "1.49"                                                                                                              
     Insert "1.71 [1.49]"                                                                                                       
                                                                                                                                
     Page 14, line 15:                                                                                                          
     Delete "122.5"                                                                                                             
     Insert "135.15 [122.5]"                                                                                                    
     Delete "1.27"                                                                                                              
     Insert "1.46 [1.27]"                                                                                                       
                                                                                                                                
     Page 14, line 16:                                                                                                          
     Delete "218.1"                                                                                                             
     Insert "244.65 [218.1]"                                                                                                    
     Delete "1.08"                                                                                                              
     Insert "1.24 [1.08]"                                                                                                       
                                                                                                                                
     Page 14, line 17:                                                                                                          
     Delete "or over [- 400]                                                                                                    
     Insert "- 400"                                                                                                             
     Delete "326.1"                                                                                                             
     Insert "368.65 [326.1]"                                                                                                    
     Delete "0.97"                                                                                                              
     Insert "1.12 [0.97]"                                                                                                       
                                                                                                                                
     Page 14, line 18:                                                                                                          
     Delete "["                                                                                                                 
     Delete "471.6"                                                                                                             
     Insert "528.65 [471.6]"                                                                                                    
     Delete "0.92"                                                                                                              
     Insert "1.06 [0.92]"                                                                                                       
                                                                                                                                
     Page 14, line 19:                                                                                                          
     Delete "OR OVER"                                                                                                           
     Insert "or over"                                                                                                           
     Delete "793.6"                                                                                                             
     Insert "899.65 [793.6]"                                                                                                    
     Delete "0.84"                                                                                                              
     Insert "0.97 [0.84]"                                                                                                       
     Delete "]"                                                                                                                 
                                                                                                                                
Vice-Chair Neuman OBJECTED for discussion.                                                                                      
                                                                                                                                
Representative   Edgmon   discussed   the   amendment.   The                                                                    
amendment proposed  a change on  page 14, section 17  of the                                                                    
CS.  The  change  equalized the  multiplier  effect  of  the                                                                    
formula.  He  was  not  confident  in  the  outcome  of  the                                                                    
amendment.  He  thought  that the  issue  would  reverberate                                                                    
outside of  the committee  hearing. He  supported additional                                                                    
funding for  larger schools.  He expressed  appreciation for                                                                    
the BSA increase  in the bill. He was bothered  by the issue                                                                    
of  breaking down  the  bill and  its  innocuous numbers  in                                                                    
section 17.  Without the amendment,  $13.5 million  would be                                                                    
added, of  which the  largest amount would  go to  the three                                                                    
largest schools. He disputed the  argument that the smaller,                                                                    
more remote schools did not  require the additional funding.                                                                    
He  asserted  that  the smaller  schools  had  even  greater                                                                    
funding   needs.   He   acknowledged  that   families   were                                                                    
gravitating  to  less  expensive  parts  of  the  state.  He                                                                    
understood the fiscal  situation faced by the  state, but he                                                                    
argued the need for equality  for rural Alaskan schools. The                                                                    
amendment would help correct the disparity.                                                                                     
                                                                                                                                
6:16:26 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg  pointed out  that the  purpose of                                                                    
adjustment factors  was to level  the playing  field between                                                                    
the  urban  and rural  districts.  He  appreciated the  high                                                                    
cost-of-living  in   rural  Alaska  that   made  adjustments                                                                    
necessary. He  appreciated the effort  to level  the playing                                                                    
field and supported the amendment.                                                                                              
                                                                                                                                
Representative  Munoz appreciated  the testimony.  She asked                                                                    
for  an   estimate  of  the   fiscal  implications   of  the                                                                    
amendment.                                                                                                                      
                                                                                                                                
6:18:28 PM                                                                                                                    
                                                                                                                                
MICHAEL  HANLEY, COMMISSIONER,  DEPARTMENT OF  EDUCATION AND                                                                    
EARLY  DEVELOPMENT, stated  that the  amendment changed  the                                                                    
number in the  multiplier as well as the  base. He expressed                                                                    
difficulty  estimating  a  cost  without a  count  of  rural                                                                    
schools affected.                                                                                                               
                                                                                                                                
ELIZABETH   NUDELMAN,   DIRECTOR,    SCHOOL   FINANCES   AND                                                                    
FACILITIES, DEPARTMENT  OF EDUCATION AND  EARLY DEVELOPMENT,                                                                    
provided educated speculation. She  stated that she reviewed                                                                    
Amendment 7 and found a cost  increase of $25 million to $30                                                                    
million range.                                                                                                                  
                                                                                                                                
Co-Chair Stoltze  asked if the  estimation was  greater than                                                                    
the change from single bracketing.                                                                                              
                                                                                                                                
Ms. Nudelman  replied that the  CS had a  school-size change                                                                    
reflected at  $13 million. She  reviewed Amendment  7, which                                                                    
she  believed increased  the change  to $25  million to  $30                                                                    
million range.                                                                                                                  
                                                                                                                                
Co-Chair Stoltze  asked if the  estimate was in  addition to                                                                    
the CS proposal.                                                                                                                
                                                                                                                                
Ms. Nudelman replied yes.                                                                                                       
                                                                                                                                
Co-Chair  Stoltze requested  Ms. Nudelman's  speculation for                                                                    
Amendment 21.                                                                                                                   
                                                                                                                                
Ms. Nudelman  replied that  the estimate  might be  the same                                                                    
for both amendments.                                                                                                            
                                                                                                                                
Representative  Munoz asked  if the  amendment would  revert                                                                    
back to the original formula with new adjustments.                                                                              
                                                                                                                                
Commissioner  Hanley concurred.  He  noted that  page 2,  of                                                                    
Amendment 21 reinstated the original formula.                                                                                   
                                                                                                                                
Representative   Munoz  asked   if   the   net  impact   was                                                                    
approximately $25 to $30 million.                                                                                               
                                                                                                                                
Ms.   Nudelman   expressed  discomfort   providing   further                                                                    
information.                                                                                                                    
                                                                                                                                
Representative Munoz asked if the  $13 million was no longer                                                                    
a factor  with the  readjustment to original  language using                                                                    
the amendment.                                                                                                                  
                                                                                                                                
Co-Chair Stoltze understood that the  $25 to $30 million was                                                                    
added to the original $13 million.                                                                                              
                                                                                                                                
6:23:27 PM                                                                                                                    
                                                                                                                                
Ms. Nudelman stated  that the current size  chart in statute                                                                    
displayed the  $400 -  $750 at  0.92. The  amendment changed                                                                    
the  $400 -  $750 to  1.06, which  appeared to  increase the                                                                    
last two components.                                                                                                            
                                                                                                                                
Co-Chair Stoltze heard two  conflicting statements. He asked                                                                    
if Amendment  21 provided $25  - $30 million in  addition to                                                                    
the $13 million.                                                                                                                
                                                                                                                                
Ms. Nudelman concurred that her  best estimation added $25 -                                                                    
$39 million to the $13 million already in the CS.                                                                               
                                                                                                                                
Co-Chair  Stoltze wished  to receive  the correct  estimates                                                                    
for the record.                                                                                                                 
                                                                                                                                
6:25:00 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  noticed  that the  multipliers  were                                                                    
used per  school rather than  per district.  She sympathized                                                                    
with the amendment sponsor and  the difficulty arriving at a                                                                    
place  of   equality  for  rural  and   urban  schools.  She                                                                    
apologized  that she  could not  support the  amendment. She                                                                    
stated that  she would  require a  fiscal note  to determine                                                                    
the exact impact  of the amendment before  she could support                                                                    
the change.                                                                                                                     
                                                                                                                                
6:28:25 PM                                                                                                                    
                                                                                                                                
Representative Munoz wondered about  focusing on the smaller                                                                    
schools with  the amendment. She  recalled that  the removal                                                                    
of the upper categories increased  the funding to the larger                                                                    
schools and  she wondered  if a  similar change  might allow                                                                    
the same for the smaller schools.                                                                                               
                                                                                                                                
Co-Chair  Stoltze stated  that  the $13  million covered  80                                                                    
percent of students.                                                                                                            
                                                                                                                                
6:29:51 PM                                                                                                                    
                                                                                                                                
Representative  Costello clarified  that  a  school with  30                                                                    
students counted the students as  $55.8 in terms of the BSA.                                                                    
Additional students from 30 to 75 were multiplied by 1.49.                                                                      
                                                                                                                                
Ms. Nudelman replied yes. The  table's size was increased by                                                                    
the base and  a multiplier for the number  of students above                                                                    
the  base with  the school  size adjusted.  Daily membership                                                                    
continued to run through the formula.                                                                                           
                                                                                                                                
6:31:15 PM                                                                                                                    
                                                                                                                                
Representative  Costello  asked  if the  column  under  base                                                                    
would change with the amendment.                                                                                                
                                                                                                                                
Ms.  Nudelman assumed  that base  was reset  to reflect  the                                                                    
higher increment in the  multiplier allowing the calculation                                                                    
to be addressed in the same manner as in current statute.                                                                       
                                                                                                                                
6:31:54 PM                                                                                                                    
                                                                                                                                
Representative  Costello  asked  if the  base  column  would                                                                    
change with the adoption of the amendment.                                                                                      
                                                                                                                                
Ms.  Nudelman  replied  yes.  The  amendment  proposed  57.2                                                                    
leading to a change in the base.                                                                                                
                                                                                                                                
Representative  Costello  appreciated   the  amendment.  She                                                                    
wished to see the detailed fiscal impact.                                                                                       
                                                                                                                                
6:32:48 PM                                                                                                                    
                                                                                                                                
Representative Gara  noted that  his district  received more                                                                    
than  their   share  under   the  amendment.   He  expressed                                                                    
willingness to  remove the aspect of  the amendment allowing                                                                    
the  larger schools  to receive  more than  their share.  He                                                                    
supported the amendment.                                                                                                        
                                                                                                                                
6:34:17 PM                                                                                                                    
                                                                                                                                
Representative   Edgmon  appreciated   the  discussion.   He                                                                    
discussed  the age-old  argument that  dollars cycle  in the                                                                    
local   communities  eventually   affects  the   economy  of                                                                    
Southcentral Alaska.  He stated that schools  in bush Alaska                                                                    
were  atrophying. He  quoted  a letter  from  a Bristol  Bay                                                                    
Borough district regarding the  drastic changes made because                                                                    
of diminishing  funds including elimination  of the  art and                                                                    
music  teacher, nurses  and a  full-time physical  education                                                                    
teacher. He  admitted that enrollment  was declining  in the                                                                    
district,  but  if  the  costs   were  more  favorable,  the                                                                    
population would  stabilize. He  stressed the  difficulty of                                                                    
living  in  the  bush.  He was  unsatisfied  with  the  bill                                                                    
although he  did support the  increases for  larger schools.                                                                    
He recognized the sensitivity of the subject.                                                                                   
                                                                                                                                
6:37:26 PM                                                                                                                    
                                                                                                                                
Representative Edgmon WITHDREW Amendment 21.                                                                                    
                                                                                                                                
Representative  Munoz  wished  to work  with  Representative                                                                    
Edgmon to achieve a similar goal.                                                                                               
                                                                                                                                
Representative Edgmon appreciated the gesture.                                                                                  
                                                                                                                                
6:38:13 PM                                                                                                                    
                                                                                                                                
Representative  Gara   MOVED  to  ADOPT  Amendment   8,  28-                                                                    
GH2716\G.17,  Mischel,  4/1/14  by Representative  Gara  and                                                                    
Representative Guttenberg, (copy on file):                                                                                      
                                                                                                                                
     Page 14, following line 28:                                                                                                
     Insert a new bill section to read:                                                                                         
        "* Sec. 21. AS 14.17 is amended by adding a new                                                                         
     section to read:                                                                                                           
     Sec. 14.17.475.  Charter school facility cost                                                                              
     adjustment.  In addition to other money available                                                                          
     under AS 14.03.260(a), if a  charter school operates in                                                                    
     a  facility   that  requires   a  lease   payment,  the                                                                    
     department shall  pay to  a charter  school established                                                                    
     under AS  14.03.250 a facility  cost adjustment  in the                                                                    
     amount  of 10  percent of  the base  student allocation                                                                    
     under  AS  14.17.470,  multiplied   by  the  number  of                                                                    
     students enrolled in the charter school."                                                                                  
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 33, line 29:                                                                                                          
     Delete "Sections 22 - 24"                                                                                                  
     Insert "Sections 23 - 25"                                                                                                  
                                                                                                                                
     Page 33, lines 30 - 31:                                                                                                    
     Delete "secs. 22 - 24"                                                                                                     
     Insert "secs. 23 - 25"                                                                                                     
                                                                                                                                
     Page 34, line 18:                                                                                                          
     Delete "Sections 22 - 24, 28, 50, and 52"                                                                                  
     Insert "Sections 23 - 25, 29, 51, and 53"                                                                                  
                                                                                                                                
     Page 34, line 20:                                                                                                          
     Delete "25, 27, and 33 - 35"                                                                                               
     Insert "26, 28, and 34 - 36"                                                                                               
                                                                                                                                
     Page 34, line 21:                                                                                                          
     Delete "29 - 31"                                                                                                           
     Insert "30 - 32"                                                                                                           
                                                                                                                                
     Page 34, line 23:                                                                                                          
     Delete "Sections 37, 40, 43, and 46"                                                                                       
     Insert "Sections 38, 41, 44, and 47"                                                                                       
                                                                                                                                
     Page 34, line 24:                                                                                                          
     Delete "secs. 54 - 58"                                                                                                     
     Insert "secs. 55 - 59"                                                                                                     
                                                                                                                                
Vice-Chair Neuman OBJECTED for discussion.                                                                                      
                                                                                                                                
Representative Gara noted that  charter schools lacked state                                                                    
funding  for  major  school construction.  A  portion  of  a                                                                    
charter school  student's BSA was  allocated toward  rent of                                                                    
the  facility.  Amendment 8  allowed  charter  schools a  10                                                                    
percent increase  above the  BSA for  every student  to help                                                                    
defray the lease cost. The  amendment would allow equity for                                                                    
charter school students.                                                                                                        
                                                                                                                                
6:40:58 PM                                                                                                                    
                                                                                                                                
Representative Wilson understood that  the CS allowed school                                                                    
districts  to  lease  buildings   to  charter  schools.  She                                                                    
wondered if a charter school  leasing from a school district                                                                    
would qualify for the 10 percent increase.                                                                                      
                                                                                                                                
Representative Gara asked for further details.                                                                                  
                                                                                                                                
Representative Wilson  replied that a charter  school in her                                                                    
district  rented a  building from  the school  district. The                                                                    
school  district maintained  the building,  so she  wondered                                                                    
whether  the   school  was  eligible  for   the  10  percent                                                                    
increase.                                                                                                                       
                                                                                                                                
Representative Gara  replied that  the increase  proposed in                                                                    
the  amendment   would  apply  to  the   charter  school  in                                                                    
question. He  pointed out that  a traditional  public school                                                                    
did not  utilize a portion of  their BSA to cover  the lease                                                                    
payment. The  10 percent BSA  increase would cover  the cost                                                                    
of the lease  for a charter school regardless  of the rental                                                                    
arrangement.                                                                                                                    
                                                                                                                                
Representative Wilson asked how  many students were enrolled                                                                    
in charter schools.                                                                                                             
                                                                                                                                
6:43:44 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze  stated that he  worked on a  similar issue                                                                    
with  the  Mat-Su Valley  Delegation  as  a fan  of  charter                                                                    
schools. He  recognized that charter schools  had bipartisan                                                                    
support  with many  leaders seeking  solutions to  the lease                                                                    
issue. He stated  that he would vote  against the amendment,                                                                    
while continuing to seek a lasting solution.                                                                                    
                                                                                                                                
6:47:04 PM                                                                                                                    
                                                                                                                                
Representative Holmes  discussed a  charter school  that was                                                                    
relocated from  her district.  She felt  that the  issue was                                                                    
important. She expressed  concern about amendment's language                                                                    
and would vote against the amendment.                                                                                           
                                                                                                                                
6:48:13 PM                                                                                                                    
                                                                                                                                
Representative  Gara  appreciated  that  the  committee  had                                                                    
similar goals. He acknowledged that  the 10 percent increase                                                                    
might be too much.                                                                                                              
                                                                                                                                
6:49:02 PM                                                                                                                    
                                                                                                                                
Representative Gara  MOVED to AMEND  Amendment 8 on  page 1,                                                                    
line 7,  with a change from  10 percent to 4  percent of the                                                                    
BSA.                                                                                                                            
                                                                                                                                
Co-Chair  Stoltze  OBJECTED  and  shared  a  story  about  a                                                                    
charter  school  seeking  a   greenhouse.  He  WITHDREW  his                                                                    
OBJECTION.  There being  NO OBJECTION,  it  was so  ordered.                                                                    
Amendment 8 as amended was before the committee.                                                                                
                                                                                                                                
Representative Gara  stated that  a charter school  with 200                                                                    
students  with  the 4  percent  BSA  increase would  receive                                                                    
approximately  $4500 to  lease their  space. He  pointed out                                                                    
that  the lease  cost for  his restaurant  was approximately                                                                    
$10  thousand per  month.  He argued  that  $4500 would  not                                                                    
compromise  an Alaskan  charter  school.  He understood  the                                                                    
caution,  because with  a 10  percent increase  some charter                                                                    
schools might have been tempted to overspend.                                                                                   
                                                                                                                                
Co-Chair Stoltze  could not  verify the  number, but  the 10                                                                    
percent increase created a $2.9 million fiscal note.                                                                            
                                                                                                                                
Representative Gara explained  his calculations and stressed                                                                    
that overspending  would not be encouraged  by the increase.                                                                    
He expressed  his commitment to  reduce the lease  costs for                                                                    
charter schools in the state.                                                                                                   
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gara, Guttenberg                                                                                                      
OPPOSED: Munoz, Neuman,  Thompson, Wilson, Costello, Edgmon,                                                                    
Holmes, Stoltze                                                                                                                 
                                                                                                                                
The MOTION FAILED (2/8).                                                                                                        
                                                                                                                                
6:53:06 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg  MOVED to  ADOPT Amendment  9, 28-                                                                    
GH2716\G.16,  Mischel,  4/1/14  by Representative  Gara  and                                                                    
Representative Guttenberg (copy on file):                                                                                       
                                                                                                                                
     Page 7, following line 23:                                                                                                 
     Insert a new bill section to read:                                                                                         
        "*  Sec. 9.  AS 14.03  is  amended by  adding a  new                                                                    
     section to read:                                                                                                           
     Sec.  14.03.263. Charter  school grant  program. (a)  A                                                                    
     charter  school that  is established  on  or after  the                                                                    
     effective date  of this section may  receive a one-time                                                                    
     grant from the  department equal to the  amount of $500                                                                    
     for each  student enrolled in  the school on  October 1                                                                    
     of the first  year in which the school  applies for the                                                                    
     grant. The  charter school shall  use a  grant received                                                                    
     under this section to  provide educational services. In                                                                    
     this   subsection,   "educational  services"   includes                                                                    
     curriculum   development,   program  development,   and                                                                    
     special education services.                                                                                                
     (b)    The  department shall  establish  by  regulation                                                                    
     procedures for  the application for and  expenditure of                                                                    
     grant funds under (a) of this section.                                                                                     
     (c)   If the amount  appropriated in a fiscal  year for                                                                    
     the  charter school  grant program  is insufficient  to                                                                    
     meet the amounts authorized under  (a) of this section,                                                                    
     the  department shall  reduce pro  rata  the per  pupil                                                                    
     grant amount by the  necessary percentage as determined                                                                    
     by  the  department.  If  a  charter  school  grant  is                                                                    
     reduced under  this subsection, the charter  school may                                                                    
     apply  to the  department in  a subsequent  fiscal year                                                                    
     for the balance of the grant amount."                                                                                      
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 14, line 23:                                                                                                          
     Delete "sec. 18"                                                                                                           
     Insert "sec. 19"                                                                                                           
                                                                                                                                
     Page 14, line 26:                                                                                                          
     Delete "secs. 18 and 19"                                                                                                   
     Insert "secs. 19 and 20"                                                                                                   
                                                                                                                                
     Page 33, line 29:                                                                                                          
     Delete "Sections 22 - 24"                                                                                                  
     Insert "Sections 23 - 25"                                                                                                  
                                                                                                                                
     Page 33, lines 30 - 31:                                                                                                    
     Delete "secs. 22 - 24"                                                                                                     
     Insert "secs. 23 - 25"                                                                                                     
                                                                                                                                
     Page 34, line 18:                                                                                                          
     Delete "Sections 22 - 24, 28, 50, and 52"                                                                                  
     Insert "Sections 23 - 25, 29, 51, and 53"                                                                                  
                                                                                                                                
     Page 34, line 20:                                                                                                          
     Delete "Sections 16, 25, 27, and 33 - 35"                                                                                  
     Insert "Sections 17, 26, 28, and 34 - 36"                                                                                  
                                                                                                                                
     Page 34, line 21:                                                                                                          
     Delete "19, and 29 - 31"                                                                                                   
     Insert "20, and 30 - 32"                                                                                                   
                                                                                                                                
     Page 34, line 22:                                                                                                          
     Delete "Section 20"                                                                                                        
     Insert "Section 21"                                                                                                        
                                                                                                                                
     Page 34, line 23:                                                                                                          
     Delete "Sections 37, 40, 43, and 46"                                                                                       
     Insert "Sections 38, 41, 44, and 47"                                                                                       
                                                                                                                                
     Page 34, line 24:                                                                                                          
     Delete "secs. 54 - 58"                                                                                                     
     Insert "secs. 55 - 59"                                                                                                     
                                                                                                                                
Vice-Chair Neuman OBJECTED for discussion.                                                                                      
                                                                                                                                
Representative Guttenberg  explained the  amendment's intent                                                                    
to  aid   charter  schools   with  start-up   expenses.  The                                                                    
amendment  would allow  a $500  allocation for  each charter                                                                    
school's education services at  the inception of the school.                                                                    
The money  would provide a  mechanism to assist  the charter                                                                    
schools in their success.                                                                                                       
                                                                                                                                
Representative  Munoz supported  the  amendment. She  stated                                                                    
that she  was one  founder of  the Juneau  Community Charter                                                                    
School. She  recalled reception of a  one-time federal grant                                                                    
for the school's set-up costs.                                                                                                  
                                                                                                                                
Representative Guttenberg  concurred that the  federal grant                                                                    
program served a similar need from 1996-2007.                                                                                   
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Thompson, Edgmon, Gara, Guttenberg, Holmes, Munoz                                                                     
OPPOSED: Wilson, Costello, Neuman, Stoltze                                                                                      
                                                                                                                                
The MOTION PASSED (6/4).                                                                                                        
                                                                                                                                
6:58:29 PM                                                                                                                    
                                                                                                                                
Representative  Gara  MOVED  to   ADOPT  Amendment  11,  28-                                                                    
GH2716\G.14, Nauman/Mischel,  4/1/14 by  Representative Gara                                                                    
and Representative Guttenberg, (copy on file):                                                                                  
                                                                                                                                
     Page 14, line 21, following "$5,865":                                                                                      
     Insert "plus, in a school district where the student-                                                                      
     to-teacher ratio has increased by more than half a                                                                         
     student between the academic year ending in 2012 and                                                                       
     the academic year ending in 2014, $50"                                                                                     
                                                                                                                                
     Page 14, line 25, following "[$5,865]":                                                                                    
     Insert "plus, in a school district where the student-                                                                      
     to-teacher ratio has increased by more than half a                                                                         
     student between the academic year ending in 2012 and                                                                       
     the academic year ending in 2014, $50"                                                                                     
                                                                                                                                
     Page 14, line 28, following "[$5,923]":                                                                                    
     Insert "plus, in a school district where the student-                                                                      
     to-teacher ratio has increased by more than half a                                                                         
     student between the academic year ending in 2012 and                                                                       
     the academic year ending in 2014, $50"                                                                                     
                                                                                                                                
Vice-Chair Neuman OBJECTED for discussion.                                                                                      
                                                                                                                                
Representative Gara  discussed the amendment.  The amendment                                                                    
granted  an  additional $50  BSA  increase  to schools  with                                                                    
increasing  class sizes  for the  following three  years. He                                                                    
mentioned that  many state districts  experienced increasing                                                                    
teacher/student  ratios.  He  stated that  the  cost  factor                                                                    
would allow the mentioned  schools to recuperate losses from                                                                    
the last three years.                                                                                                           
                                                                                                                                
6:59:56 PM                                                                                                                    
                                                                                                                                
Representative  Wilson  requested further  information.  She                                                                    
stated that  she did  not support  the amendment  as another                                                                    
creative method of raising the BSA.                                                                                             
                                                                                                                                
7:01:38 PM                                                                                                                    
                                                                                                                                
Representative  Gara clarified  that the  funding would  not                                                                    
apply  to  every school  district.  He  mentioned that  some                                                                    
school  districts had  cut back  on  curriculum, while  some                                                                    
district continued unscathed.                                                                                                   
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gara, Guttenberg                                                                                                      
OPPOSED: Holmes, Munoz,  Neuman, Thompson, Wilson, Costello,                                                                    
Edgmon, Stoltze                                                                                                                 
                                                                                                                                
The MOTION FAILED (2/8).                                                                                                        
                                                                                                                                
7:03:49 PM                                                                                                                    
                                                                                                                                
Representative Gara MOVED to  RESCIND the committee's action                                                                    
in adopting  Amendment 6. There  being NO OBJECTION,  it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
Representative Wilson MOVED to ADOPT Amendment 6.                                                                               
                                                                                                                                
Vice-Chair Neuman OBJECTED for discussion.                                                                                      
                                                                                                                                
7:04:43 PM                                                                                                                    
                                                                                                                                
Representative Gara  noted that the state's  own educational                                                                    
standards  were  based  on   the  Common  Core  Initiative's                                                                    
standards.  He  understood  that the  amendment  discouraged                                                                    
Alaskan  school standards  that  were based  on Common  Core                                                                    
Initiative standards.  The amendment would  likely eliminate                                                                    
the state's  educational standards. He pointed  out the lack                                                                    
of  definition of  Common Core  Initiative standards  in the                                                                    
amendment.  He  believed  that the  amendment  incurred  the                                                                    
potential risk of losing the state's educational standards.                                                                     
                                                                                                                                
Representative Wilson  assumed that Representative  Gara was                                                                    
speaking  about lines  16-18. She  disagreed that  the state                                                                    
would not be  able to implement the  Alaska state standards.                                                                    
She understood  that Alaska did  not incur  additional costs                                                                    
as a result of the state standards.                                                                                             
                                                                                                                                
Co-Chair  Stoltze  announced that  he  was  a co-sponsor  of                                                                    
Amendment 6.                                                                                                                    
                                                                                                                                
Representative Gara  agreed with subsection (d),  lines 8-12                                                                    
of the  amendment. He  expressed concern  with lines  17 and                                                                    
18, which stated that the  Department of Education and Early                                                                    
Development could not reconstruct  the state's own standards                                                                    
because of  the expense involved. He  encouraged the sponsor                                                                    
to  discuss  the matter  with  the  commissioner before  the                                                                    
House Floor session addressing the legislation.                                                                                 
                                                                                                                                
Vice-Chair  Neuman WITHDREW  his OBJECTION.  There being  NO                                                                    
OBJECTION, it was so ordered. Amendment 6 was ADOPTED.                                                                          
                                                                                                                                
7:10:32 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
7:17:20 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative  Costello  discussed   the  13  fiscal  notes                                                                    
accompanying  the bill.  The first  from  the Department  of                                                                    
Education  and Early  Development showed  no fiscal  impact.                                                                    
The second fiscal note from  Fund Transfers showing a fiscal                                                                    
impact of  $281,447,000 for  FY 15  and $240,188,000  for FY                                                                    
16,  $245,059,000   for  FY  17,  $250,170,00   for  FY  18,                                                                    
$255,539,00 for FY 19 and $261,027,000 for FY 20.                                                                               
                                                                                                                                
Co-Chair  Stoltze  appreciated  the audible  impact  of  the                                                                    
fiscal note  in contrast to  the figures debated  during BSA                                                                    
discussions.                                                                                                                    
                                                                                                                                
7:19:01 PM                                                                                                                    
                                                                                                                                
Representative  Costello  continued  with the  third  fiscal                                                                    
note from the Department  of Education and Early Development                                                                    
with a fiscal  impact of $80 thousand in FY  15, which would                                                                    
be amended  to include $500  thousand. The remainder  of the                                                                    
fiscal note would also be amended.                                                                                              
                                                                                                                                
Co-Chair Stoltze suggested a motion.                                                                                            
                                                                                                                                
Representative  Costello MOVED  to  AMEND fiscal  note 3  to                                                                    
reflect the passage of Amendment 9.                                                                                             
                                                                                                                                
Representative   Thompson  opined   that   the  figure   was                                                                    
excessive. He  suspected that  an indeterminate  fiscal note                                                                    
would  be  more applicable,  since  the  number of  aspiring                                                                    
charter schools was unknown.                                                                                                    
                                                                                                                                
Representative  Costello MOVED  to  AMEND fiscal  note 3  to                                                                    
reflect the true  cost. There being NO OBJECTION,  it was so                                                                    
ordered.                                                                                                                        
                                                                                                                                
Representative Gara requested  further information about the                                                                    
first fiscal note.                                                                                                              
                                                                                                                                
Representative  Costello   discussed  fiscal  note   4  from                                                                    
Department  of  Labor  and Workforce  Development  with  the                                                                    
fiscal impact  in FY 15  of zero and $5,533,100  included in                                                                    
the governor's  request. The proposed  fiscal impact  for FY                                                                    
16 and  FY 17  was $5,533,100,  concluding with  zero fiscal                                                                    
impact in  FY 18, FY  19 and FY 20.  Fiscal note 5  from the                                                                    
University of  Alaska showed a  fiscal impact  of $8,381,300                                                                    
for  FY  15  with  $5,431,800  included  in  the  governor's                                                                    
request.   Fiscal   years    16   through   20   anticipated                                                                    
$13,813,100.                                                                                                                    
                                                                                                                                
7:22:45 PM                                                                                                                    
                                                                                                                                
Representative  Costello  continued  with   FN  6  from  the                                                                    
Department  of Revenue  showed  zero  fiscal impact.  Fiscal                                                                    
note  7 from  the  Department of  Revenue  showed no  fiscal                                                                    
impact. Fiscal note  8 from the Department  of Education and                                                                    
Early Development  showed a fiscal impact  of $1,301,000 for                                                                    
FY 15 through FY 20.                                                                                                            
                                                                                                                                
7:23:51 PM                                                                                                                    
                                                                                                                                
Representative Costello  discussed FN 9 from  the Department                                                                    
of Education  and Early Development  and the impact  of $177                                                                    
thousand for FY 15 through FY 20.                                                                                               
                                                                                                                                
Representative Costello discussed FN  10 from the Department                                                                    
of Labor  and Workforce Development showing  a fiscal impact                                                                    
of $156 thousand in FY 15 through FY 20.                                                                                        
                                                                                                                                
Representative   Costello   discussed   FN   11   from   the                                                                    
delineation Fund Transfers with a  fiscal impact in FY 15 of                                                                    
$100 million.                                                                                                                   
                                                                                                                                
7:25:16 PM                                                                                                                    
                                                                                                                                
Representative  Costello  discussed  FN 12  from  the  State                                                                    
Assistant to Retirement showing a  fiscal impact in FY 15 of                                                                    
$1.4 billion.                                                                                                                   
                                                                                                                                
Representative  Costello  discussed  the final  fiscal  note                                                                    
from  the  Department  of Administration  showing  a  fiscal                                                                    
impact of  $610,600 for  FY 15, a  fiscal impact  of $94,500                                                                    
for FY 16 and zero fiscal impact in FY 17 through FY 20.                                                                        
                                                                                                                                
7:26:10 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Neuman asked  about  the analysis  of  FN 4.  He                                                                    
disagreed  that  5  full-time  positions  were  required  to                                                                    
manage 11 schools. He suspected  that one full-time position                                                                    
could  manage the  schools. He  was assured  by Commissioner                                                                    
Blumer that  the reporting  requirements would  not increase                                                                    
costs.                                                                                                                          
                                                                                                                                
Co-Chair Stoltze requested an amendment.                                                                                        
                                                                                                                                
7:30:34 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Neuman MOVED  a conceptual  AMENDMENT to  fiscal                                                                    
note 4.  He suggested that  the FY 15  appropriation request                                                                    
reflect  a negative  $400 thousand,  which  would allow  one                                                                    
full-time   personnel   to    administer   11   grants   for                                                                    
approximately $11 million.                                                                                                      
                                                                                                                                
Representative Holmes asked for the years impacted.                                                                             
                                                                                                                                
Vice-Chair Neuman  replied that the change  would include FY                                                                    
15 through FY 17.                                                                                                               
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
Representative Gara pointed to page 2  of fiscal note 1.  He                                                                    
noted that  the fiscal cost  in column 3 was  $59.8 million.                                                                    
He noted that  the total fiscal cost  would be approximately                                                                    
$34 to $36 million after removal of the $25 million.                                                                            
                                                                                                                                
Co-Chair Stoltze stated  that Representative Gara's comments                                                                    
would be noted on the record.                                                                                                   
                                                                                                                                
Co-Chair  Stoltze  remarked  that  the  fiscal  notes  would                                                                    
continue to be adjusted throughout the process.                                                                                 
                                                                                                                                
Vice-Chair  Neuman  MOVED to  REPORT  CSHB  278(FIN) out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes.                                                                                                      
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
7:34:20 PM                                                                                                                    
                                                                                                                                
Representative  Gara  stated  that if  Co-Chair  Austerman's                                                                    
version of the  distribution of $25 million  through the BSA                                                                    
came to  pass, the bill would  not meet the deficits  of the                                                                    
schools in  the first year  of the bill. He  understood that                                                                    
everyone worked very hard, but he expressed his concerns.                                                                       
                                                                                                                                
Co-Chair  Stoltze  thanked  all  of the  members  for  their                                                                    
patience during the process.                                                                                                    
                                                                                                                                
Co-Chair  Stoltze WITHDREW  his  OBJECTION.  There being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSHB  278  (FIN)  was  REPORTED out  of  committee  with  no                                                                    
recommendation and  with one new  zero fiscal note  from the                                                                    
Department  of  Education  and Early  Development,  two  new                                                                    
fiscal  notes  from the  House  Finance  Committee for  Fund                                                                    
Transfers,  three new  fiscal notes  from the  Department of                                                                    
Education and  Early Development, two new  fiscal notes from                                                                    
the Department  of Labor and Workforce  Development, one new                                                                    
fiscal  note  from  the University,  one  new  indeterminate                                                                    
fiscal note  from the  Department of  Revenue, one  new zero                                                                    
fiscal note from the Department  of Revenue,  one new fiscal                                                                    
note  from the  Department  of Administration,  and one  new                                                                    
fiscal  note  from the  House  Finance  Committee for  State                                                                    
Assistance to Retirement Funds.                                                                                                 
                                                                                                                                
Co-Chair Stoltze  thanked Representative Munoz  for forgoing                                                                    
an important  event celebrating  a youth  hockey development                                                                    
clinic.  He  noted  that he  and  Representative  Munoz  co-                                                                    
sponsored the clinic.                                                                                                           
                                                                                                                                
Representative   Munoz   shared    that   approximately   70                                                                    
participants enrolled in the successful clinic.                                                                                 
                                                                                                                                
Co-Chair Stoltze noted  that it had been a treat  for him to                                                                    
help bring hockey to Juneau.                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
7:37:10 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 7:37 p.m.                                                                                          

Document Name Date/Time Subjects
HB 278 CS Amendments.pdf HFIN 4/2/2014 1:30:00 PM
HB 278
HB 278 CS FIN Amendment 18 Gara.pdf HFIN 4/2/2014 1:30:00 PM
HB 278
HB 278 CS FIN G Fiscal Note Packet 4-2-14.pdf HFIN 4/2/2014 1:30:00 PM
HB 278
HB 278 CS FIN G Amendment 19 Holmes.pdf HFIN 4/2/2014 1:30:00 PM
HB 278
HB 278 CS FIN G Amendment Holmes 20.pdf HFIN 4/2/2014 1:30:00 PM
HB 278
HB 278 CS FIN G Amendment 21 Edgmon.pdf HFIN 4/2/2014 1:30:00 PM
HB 278
HB 278 CS FIN G Amendments with Actions.pdf HFIN 4/2/2014 1:30:00 PM
HB 278
HB 278 CS FIN Final Fiscal Note Packet.pdf HFIN 4/2/2014 1:30:00 PM
HB 278
HB 278 Letter G. Miller.pdf HFIN 4/2/2014 1:30:00 PM
HB 278
HB 278 Testimony Hutchison.pdf HFIN 4/2/2014 1:30:00 PM
HB 278