Legislature(2017 - 2018)ADAMS ROOM 519

04/18/2018 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to a Call of the Chair --
+ HB 383 TOURISM MARKETING:BOARD;ASSESSMENT;FUND TELECONFERENCED
<Bill Hearing Canceled>
-- Public Testimony --
+ SB 102 INTERNET FOR SCHOOLS; FUNDING TELECONFERENCED
Heard & Held
-- Public Testimony --
+ SB 216 SCHOOL FUNDING FOR CONSOLIDATED SCHOOLS TELECONFERENCED
Heard & Held
-- Public Testimony --
+ SB 104 EDUCATION CURRICULUM REQUIREMENTS TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                      April 18, 2018                                                                                            
                         9:38 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:38:44 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Foster  called the House Finance  Committee meeting                                                                    
to order at 9:38 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Neal Foster, Co-Chair                                                                                            
Representative Paul Seaton, Co-Chair                                                                                            
Representative Les Gara, Vice-Chair                                                                                             
Representative Jason Grenn                                                                                                      
Representative David Guttenberg                                                                                                 
Representative Scott Kawasaki                                                                                                   
Representative Dan Ortiz                                                                                                        
Representative Lance Pruitt                                                                                                     
Representative Steve Thompson                                                                                                   
Representative Cathy Tilton                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Senator Natasha  von Imhof,  Sponsor; Jonathan  King, Staff,                                                                    
Senator  von Imhof;  Dr.  Lisa  Parady, Executive  Director,                                                                    
Alaska  Council  of  School Administrators;  Heidi  Teshner,                                                                    
Director  of School  Finance,  Department  of Education  and                                                                    
Early Development; Senator  Anna McKinnon, Sponsor; Brittany                                                                    
Hartmann,  Staff, Senator  Anna  McKinnon; Michael  Johnson,                                                                    
Commissioner,    Department   of    Education   and    Early                                                                    
Development; Representative Harriet Drummond.                                                                                   
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Dr.  Deena  Bishop,  Anchorage School  District,  Anchorage;                                                                    
Andrew  Leavitt,  Lower   Yukon  School  District,  Mountain                                                                    
Village;  Representative  Harriett  Drummond,  Chair,  House                                                                    
Education Committee; Jim  Anderson, Chief Financial Officer,                                                                    
Anchorage  School  District,   Anchorage;  Damon  Hargraves,                                                                    
Kodiak   Island  Borough   School  District,   Kodiak;  Luke                                                                    
Meinert,  Yukon-Koyukuk  School District,  Fairbanks;  David                                                                    
Neese,  Self,  Anchorage;  Bill  Burr,  Delta/Greely  School                                                                    
District  and Alaska  Society  of  Technology in  Education,                                                                    
Delta Junction.                                                                                                                 
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 102    INTERNET FOR SCHOOLS; FUNDING                                                                                         
                                                                                                                                
          SB 102 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
CSSB 104 (2d FIN)                                                                                                               
          EDUCATION CURRICULUM REQUIREMENTS                                                                                     
                                                                                                                                
          CSSB 104 (2d FIN) was HEARD and HELD in committee                                                                     
          for further consideration.                                                                                            
                                                                                                                                
CSSB 216 (FIN)                                                                                                                  
          SCHOOL FUNDING FOR CONSOLIDATED SCHOOLS                                                                               
                                                                                                                                
          CSSB 216 (FIN) was HEARD and HELD in committee                                                                        
          for further consideration.                                                                                            
                                                                                                                                
Co-Chair Foster reviewed the agenda for the day.                                                                                
                                                                                                                                
CS FOR SENATE BILL NO. 216(FIN)                                                                                                 
                                                                                                                                
"An  Act  relating  to  the calculation  of  state  aid  for                                                                    
schools that  consolidate; relating to the  determination of                                                                    
the number  of schools in  a district; and providing  for an                                                                    
effective date."                                                                                                                
                                                                                                                                
9:39:42 AM                                                                                                                    
                                                                                                                                
SENATOR  NATASHA VON  IMHOF,  SPONSOR,  thanked members  for                                                                    
hearing the  bill and the House  for working on HB  406, the                                                                    
companion bill.  She indicated that the  request was brought                                                                    
forward to  the legislature  by several  of the  large urban                                                                    
school districts in Alaska who  were facing the challenge of                                                                    
student  migration out  of their  districts, leaving  under-                                                                    
utilized  school  buildings  with excess  capacity.  Current                                                                    
state  law inadvertently  discouraged school  consolidation.                                                                    
Analysis   showed  that   districts  that   might  want   to                                                                    
consolidate  schools  found  that  any  savings  experienced                                                                    
through   reduced    labor   and   operating    costs   were                                                                    
detrimentally offset through the  reduced income received by                                                                    
the  district  when students  were  absorbed  into a  larger                                                                    
school.                                                                                                                         
                                                                                                                                
Senator von  Imhof explained that currently  the school size                                                                    
cost  factor contained  in AS  14.17.450  was an  adjustment                                                                    
factor applied  to the base  student allocation  (BSA) which                                                                    
gave  smaller  schools more  money  per  student and  larger                                                                    
schools less money  per student under the  theory that small                                                                    
schools were less efficient with  higher operating costs per                                                                    
student.  For  districts  that  might  like  to  consolidate                                                                    
schools, the  fact that they  were effectively  punished via                                                                    
the  state funding  formula for  school consolidation  meant                                                                    
that many were  unwilling to even have  a conversation about                                                                    
consolidation.  Senate Bill  216  addressed  the issue.  The                                                                    
bill  provided   a  4-year  consolidation   transition  that                                                                    
allowed  a  school district  to  gradually  move from  their                                                                    
current state aid  amount to a lower state  aid amount after                                                                    
the consolidation  of schools.  It was voluntary  and simply                                                                    
another  tool for  districts to  use if  they chose  to. The                                                                    
purpose  of  the  bill  was  to  encourage  and  incentivize                                                                    
districts  to   look  for   excess  capacity   within  their                                                                    
districts  through  potentially   consolidating  schools  by                                                                    
holding  harmless the  state revenue  received  for 2  years                                                                    
followed by a step  down in revenue in years 3  and 4 so the                                                                    
district had  time to repurpose  the asset and  reabsorb the                                                                    
associated operating  costs. She had relayed  the essence of                                                                    
the  bill and  indicated her  staff would  continue with  an                                                                    
explanation and a review of the PowerPoint.                                                                                     
                                                                                                                                
9:42:44 AM                                                                                                                    
                                                                                                                                
JONATHAN  KING, STAFF,  SENATOR  VON  IMHOF, introduced  the                                                                    
PowerPoint  presentation:  "SB   216:  School  Consolidation                                                                    
Transition."  He  was also  available  to  walk through  the                                                                    
sectional analysis after the presentation if needed.                                                                            
                                                                                                                                
Mr.  King began  with the  school size  adjustment chart  on                                                                    
slide  2:   "Alaska's  School  Size  Factor   Adjustment  AS                                                                    
14.17.450(a)." He indicated that  the figure showed Alaska's                                                                    
school  size factor  adjustment in  AS 14.17.450(a).  It was                                                                    
part of the  school funding formula used  to provide smaller                                                                    
schools with slightly more money  than the state provided to                                                                    
larger  schools.  He  explained  that  for  each  individual                                                                    
school  the  state  counted  the  number  of  students,  the                                                                    
unadjusted   average  daily   membership   (ADM).  For   the                                                                    
individual school  the state located  where they sat  on the                                                                    
curve.  The curve  provided the  multiplier used  inside the                                                                    
school  funding adjusted.  He noted  that the  shape of  the                                                                    
curve went  up on the  left-hand side  and went down  on the                                                                    
right-hand side.  In terms of  funding, in a  smaller school                                                                    
kids counted for more than kids in larger schools.                                                                              
                                                                                                                                
9:44:06 AM                                                                                                                    
                                                                                                                                
Mr.  King moved  to the  graph on  slide 3:  "Effect of  the                                                                    
School  Size  Factor  on   Consolidation:  Example  1."  The                                                                    
problem  the bill  tried to  address  could be  seen on  the                                                                    
slide.  The curve  followed exactly  the same  curve on  the                                                                    
prior slide. However, it showed  the distribution of schools                                                                    
inside  the  Anchorage  School District.  The  district  was                                                                    
large enough  to provide  a large range  of schools  and the                                                                    
same  shaped curve  as before.  He highlighted  the 2  green                                                                    
dots  on   the  page.  He   presumed  that  the   2  schools                                                                    
represented  by the  green dots  wanted  to consolidate  and                                                                    
that the space  in one of the existing  facilities was large                                                                    
enough  to  bring  the  kids from  the  other  school  over.                                                                    
Currently, there were  2 schools; one with  755 students and                                                                    
one with 798 students.  Their school size factor adjustment,                                                                    
according  to statute,  was equal  to  1.06 and  1.05 -  the                                                                    
multipliers  that their  ADM received  in the  state funding                                                                    
formula  prior  to  consolidation.   In  combining  the  two                                                                    
schools, they  became the  red dot further  to the  right of                                                                    
the curve  marked by the  numbers 0.95 (the  new multiplier)                                                                    
and   1553   (the   new    number   of   students).   Before                                                                    
consolidation,  the  2  schools would  have  received  $11.8                                                                    
million  in state  aid. After  consolidation  with the  drop                                                                    
down to the curve to  the right, they received $10.6 million                                                                    
in state  aid. There  was a difference  of $1.2  million. At                                                                    
the same  time, they ended up  with a drop in  local funding                                                                    
because  the  maximum  amount  of  funding  a  school  could                                                                    
receive was a  function of the total  basic need calculation                                                                    
for the  state. The schools  lost an additional  $250,000 in                                                                    
local  funding.  The  hurdle for  the  school  district  was                                                                    
whether it  would save more  than $1.5 million.  The funding                                                                    
the school  would receive  from state  and local  sources by                                                                    
combining the 2  schools was $1.5 million.  The question was                                                                    
whether the  school would save  $1.5 million. If  not, there                                                                    
would be  a net  loss to the  school district.  He suggested                                                                    
that when school districts did  the calculations, they found                                                                    
that their drop in funding  was greater than their estimated                                                                    
savings, at least in the short run.                                                                                             
                                                                                                                                
9:47:03 AM                                                                                                                    
                                                                                                                                
Mr. King continued to slide  4: "What the Bill Does: Section                                                                    
1." He  relayed that Section  1 removed the  disincentive by                                                                    
providing  a  4-year  transition  period  for  consolidating                                                                    
schools. In  years 1  and 2, the  school would  preserve 100                                                                    
percent  of the  pre-consolidation per  student funding.  In                                                                    
the prior example  where the two schools  were combined, for                                                                    
the  first 2  years  after consolidation  their school  size                                                                    
adjustment factor would  be held stable at 1.06  and 1.05 on                                                                    
the prior slide.  In year 3, the  consolidated schools would                                                                    
start  transitioning   to  the   post-consolidation  funding                                                                    
amount.  They would  receive the  post consolidation  amount                                                                    
plus  66 percent  of  the difference  between  pre and  post                                                                    
consolidation. In  year 4 they  would receive 33  percent of                                                                    
the  difference  plus the  base  amount.  After year  4  the                                                                    
school would receive standard funding  as provided for in AS                                                                    
14.17.410.                                                                                                                      
                                                                                                                                
Mr.  King reviewed  slide 5:  "What  the Bill  Does Not  Do:                                                                    
Section 1." The bill did  not change the school size funding                                                                    
formula in  AS 14.17.450.  The curve  would not  be affected                                                                    
and would  not change  anything for  those schools  that did                                                                    
not   consolidate.  For   example,   if   Fairbanks  had   a                                                                    
consolidation and Mat-Su did not,  there would be no funding                                                                    
effect  to  Mat-Su. It  would  only  affect Fairbanks.  Even                                                                    
within  Fairbanks,  it  would only  affect  the  portion  of                                                                    
funding  that was  associated with  the schools  involved in                                                                    
the consolidation. The  calculations associated with schools                                                                    
that  were  untouched  by consolidation  and  did  not  have                                                                    
boundary issues  would not be included.  The legislation did                                                                    
not  encourage  districts  to  build  new  schools  for  the                                                                    
purposes of  consolidating existing schools. He  noted there                                                                    
was a  prohibition within SB 216  to use a new  facility. An                                                                    
existing facility had  to be used. It did  not allow schools                                                                    
to reopen  or reconsolidate  in order to  take inappropriate                                                                    
advantage of  the consolidation transition. In  other words,                                                                    
there were limits  on going back and forth.  One thing heard                                                                    
in public  testimony was  that there was  no better  way for                                                                    
the school  districts to get  more money than by  staying at                                                                    
the status quo.  Under the status quo,  school districts had                                                                    
the incentive to have the  smallest schools possible because                                                                    
they received  the most funding  associated with  the curve.                                                                    
The goal  was to move away  from the status quo,  change the                                                                    
thinking  about  the  status  quo,  and  make  consolidation                                                                    
potentially  more  attractive.  The tool  was  available  to                                                                    
school districts who wanted to use it.                                                                                          
                                                                                                                                
Senator von Imhof  added that in Section 1 the  bill was not                                                                    
costing  the  state  any  additional  funds.  In  fact,  she                                                                    
pointed out that there should be  savings in year 3 and year                                                                    
4  when   the  state   began  to   drop  down   the  revenue                                                                    
calculation.  In year  5, the  state would  be paying  a new                                                                    
revenue calculation  which would  be much  less that  it was                                                                    
currently. She emphasized  that consolidation was voluntary.                                                                    
The goal  was for schools  to have 4  years to figure  out a                                                                    
way to  repurpose the school.  The bill did not  address how                                                                    
to repurpose the school. It  was entirely up to the district                                                                    
and the  board to determine  each specific property  and how                                                                    
they wanted to handle it. She  had found, that for a typical                                                                    
elementary  school  in  the Anchorage  School  District  the                                                                    
savings would  eventually be  about $600,000.  She suggested                                                                    
that  if a  high school  were to  theoretically close  or be                                                                    
consolidated,  the savings  would  be about  $1 million  per                                                                    
school in  the Anchorage  School District.  The goal  was to                                                                    
use  existing infrastructure  more  efficiently rather  than                                                                    
constructing new buildings.                                                                                                     
                                                                                                                                
Mr. King noted that the  savings numbers were per school per                                                                    
year rather than in total.                                                                                                      
                                                                                                                                
9:52:24 AM                                                                                                                    
                                                                                                                                
Mr. King advanced  to slide 6: "What the  Bill Does: Section                                                                    
2."  He  reported  that Section  2  provided  single  school                                                                    
communities to  fully utilize the  capacity of  the existing                                                                    
K-12  buildings that  they  had. There  was  a provision  in                                                                    
AS 14.17.905  that stated  that in  communities where  there                                                                    
was  a single  K-12  school, they  would  lose funding  when                                                                    
their  ADM  exceeded  425   students.  Currently,  under  AS                                                                    
14.17.905, the funding formula for  a rural community with 1                                                                    
K-12 school  with 1 to  425 students stated that  they would                                                                    
be treated as  if there were 2 schools. In  other words, the                                                                    
number of  students, 425, would be  divided in 2 to  equal 2                                                                    
schools  of about  212 students  each. The  result would  be                                                                    
that  the schools  moved up  the  curve from  slide 2  which                                                                    
provided more funding.  When going from 425  students to 426                                                                    
the school would  be treated as 1 school.  He suggested that                                                                    
the movement  down the curve from  212 to 426 was  a loss of                                                                    
hundreds of  thousands of dollars  to that  school district,                                                                    
an  unintended consequence  of hard  coding the  425 number.                                                                    
Section 2 changed it so  that when the schools reached above                                                                    
425 ADM they  would continue to be treated as  2 schools. He                                                                    
wondered why the  state would want to do  that. He suggested                                                                    
that  under the  current situation,  when the  student count                                                                    
went from 425 to 426, all  of a sudden, maintaining the K-12                                                                    
school  became   less  desirable.  It  also   increased  the                                                                    
incentive to  build a new  school in  order to have  2 brick                                                                    
and mortar  schools to maximize  funding under  the existing                                                                    
state statute. It  was much less expensive for  the state to                                                                    
remove  the  artificial  barrier  of  425  students  keeping                                                                    
districts in schools with capacity  greater than 25, than it                                                                    
was to build a new school for tens of millions of dollars.                                                                      
                                                                                                                                
Senator von  Imhof explained that  the provision  came about                                                                    
when exploring the legislation  for larger school districts.                                                                    
The particular  issue was brought  to her attention  and was                                                                    
the  reason  for  Section  2.  She noted  that  it  was  for                                                                    
communities with  a single K-12  school. It was  specific to                                                                    
the  type of  school  as  well as  a  specific  size of  the                                                                    
community. The  definition of "Community"  was in  the bill.                                                                    
It was  for communities  that meet the  criteria. Currently,                                                                    
only one community qualified. She  did not want the state to                                                                    
pay  for another  new  school costing  tens  of millions  of                                                                    
dollars when  an existing building  had excess  capacity and                                                                    
was working fine for the community.                                                                                             
                                                                                                                                
Mr. King indicated there was  another example, but it was up                                                                    
to the  will of  the committee  if members  wanted to  see a                                                                    
more  detailed example.  Co-Chair  Foster  thought that  the                                                                    
committee was okay without the more detailed example.                                                                           
                                                                                                                                
Mr.  King offered  to walk  through the  sectional analysis.                                                                    
Co-Chair Foster encouraged him to do so.                                                                                        
                                                                                                                                
9:57:21 AM                                                                                                                    
                                                                                                                                
Mr. King read the sectional analysis for SB 216:                                                                                
                                                                                                                                
     Section 1: AS 14.17.410(b)                                                                                                 
     Adds new  language to AS  14.17.410(b)(1) to  provide a                                                                    
     "consolidation   transition"  that   allows  a   school                                                                    
     district  to gradually  move from  their current  state                                                                    
     aid  amount   to  a  lower   state  aid   amount  after                                                                    
     consolidation  of schools  and describes  how and  when                                                                    
     the consolidation transition can be used.                                                                                  
                                                                                                                                
          (H) Specifies how state aide during the                                                                               
          transition period will be calculated. The "pre-                                                                       
          consolidation"  and  "post-consolidation"  formula                                                                    
          remains the  same; the bill  will only  change how                                                                    
          quickly   the  "post   consolidation"  amount   is                                                                    
          instituted:                                                                                                           
                                                                                                                                
          (H)(i)                                                                                                                
          Consolidation  Years  1  & 2:  The  district  will                                                                    
          receive the  same funding  as if  the consolidated                                                                    
          school was still separate schools.                                                                                    
                                                                                                                                
          (H)(ii)                                                                                                               
          Consolidation  Year 3:  The district  will receive                                                                    
          66% of  the difference  between funding  from pre-                                                                    
          consolidation and post-consolidation.                                                                                 
                                                                                                                                
          (H)(iii)                                                                                                              
          Consolidation  Year 4:  The district  will receive                                                                    
          33% of  the difference  between funding  from pre-                                                                    
          consolidation and post-consolidation.                                                                                 
                                                                                                                                
          Sections (I)    (L)  specify conditions  where the                                                                    
          "consolidation transition" may not be used.                                                                           
                                                                                                                                
          (I)  When  the  "transitional"  state  aid  amount                                                                    
          would  result  in  lower funding  than  under  the                                                                    
          traditional funding formula.                                                                                          
                                                                                                                                
          (J) When  a school  district is  already receiving                                                                    
          additional  state aid  due  to  the Hold  Harmless                                                                    
          Clause in AS 14.17.410(b)(1)(E).                                                                                      
          (K) If a new facility  was constructed in order to                                                                    
          consolidate schools.                                                                                                  
                                                                                                                                
          (L) If the school  was reopened and reconsolidated                                                                    
          within the past seven years.                                                                                          
                                                                                                                                
          (M)   Requires  the   district   to  provide   the                                                                    
          necessary  information  and calculations  for  the                                                                    
          Department of Education  and Early Development for                                                                    
          verification, including a  student count by school                                                                    
          for the schools involved in the consolidation.                                                                        
          Section 2: AS 14.17.905                                                                                               
          Adds a  new subsection  that allows a  school that                                                                    
          services grades K-12 in a  single building and has                                                                    
          an  average daily  membership  (ADM) greater  than                                                                    
          425  to be  considered  two  separate schools  for                                                                    
          calculating state aid.                                                                                                
                                                                                                                                
     Section 3: AS 14.17.410(b)                                                                                                 
     Makes this Act applicable to schools which consolidate                                                                     
     on or after the effective date of this bill.                                                                               
                                                                                                                                
     Section 4: Effective Date                                                                                                  
     Provides for an immediate effective date.                                                                                  
                                                                                                                                
Mr. King was available for questions.                                                                                           
                                                                                                                                
Co-Chair Foster reviewed the list of available testifiers.                                                                      
                                                                                                                                
10:01:18 AM                                                                                                                   
                                                                                                                                
Co-Chair  Seaton referred  to Section  L regarding  a school                                                                    
being  reopened and  reconsolidated  within  the past  seven                                                                    
years.  He  asked  if  the language  meant  just  under  the                                                                    
proposed  program. Mr.  King responded  only  if the  school                                                                    
received the funding transition under the proposed program.                                                                     
                                                                                                                                
Co-Chair Seaton  presented a hypothetical scenario  in which                                                                    
a school  was currently closed  and was reopened.  He though                                                                    
the school could qualify for  the change for reconsolidation                                                                    
for  the  following  year.  Mr. King  replied  that  he  was                                                                    
correct. If  there was a  school that was  currently closed,                                                                    
reopened,  reconsolidated,   and  closed  again,   it  could                                                                    
qualify under  the section. He  had heard from  the district                                                                    
that it  took about 2 years  to reopen a school  and 2 years                                                                    
to close  a school. It  was a painful process  for districts                                                                    
and  for families  involved. Families  got very  attached to                                                                    
schools, particularly with schools  that had been opened for                                                                    
a while. Although the bill  was creating an additional tool,                                                                    
it did not  mean that consolidation was a done  deal. It was                                                                    
something  for  districts  to  consider,  but  there  was  a                                                                    
political process  to go  through to do  so. There  would be                                                                    
significant  costs associated  with reopening  a school.  He                                                                    
thought it was important to consider the pragmatic hurdles.                                                                     
                                                                                                                                
10:04:13 AM                                                                                                                   
                                                                                                                                
Co-Chair Seaton  asked for a  breakdown of cost  savings. He                                                                    
asked for information about the  savings associated with the                                                                    
closing of a school and repurposing it.                                                                                         
                                                                                                                                
Mr. King referred  to slide 8 which presented  an example of                                                                    
5  schools shrinking  down  to  4. The  example  was of  the                                                                    
Anchorage  School  District.  He  noted  the  district  cost                                                                    
factor in the yellow box of  1.00. In the very lower box, if                                                                    
the  Anchorage  School District  was  to  take 5  elementary                                                                    
schools  and  consolidate them  down  to  4, their  loss  in                                                                    
funding would  be about $800,000. He  thought Representative                                                                    
Seaton  was  asking  what  the   savings  would  be  to  the                                                                    
districts. He had  the information in his  office. It showed                                                                    
that a district would lose  a principle, operating costs for                                                                    
the building, and custodial support  staff. The cost savings                                                                    
would be about  $500,000 to $600,000. The  district would be                                                                    
in  the  hole  $200,000  even  accounting  for  closing.  He                                                                    
highlighted  the issue  of transportation  costs. There  had                                                                    
been  questions  in  other  committees  about  having  fewer                                                                    
schools and larger boundary areas  resulting in more time on                                                                    
the bus for students. There  was a question about elementary                                                                    
students spending  40 minutes per  day each way on  the bus.                                                                    
The  Anchorage School  District  had testified  that it  was                                                                    
committed  to making  sure kindergarteners  were on  the bus                                                                    
for an  age appropriate amount  of time, which  meant adding                                                                    
additional   transportation   costs.  In   this   particular                                                                    
example, based on  what was provided to  Senator von Imhof's                                                                    
office,  the   additional  transportation  costs   would  be                                                                    
$400,000. He conveyed that the  school district would be out                                                                    
at  total  of $500,000  to  $600,000.  The Anchorage  School                                                                    
District had  been very willing  to show its modeling  as to                                                                    
its decision-making process.                                                                                                    
                                                                                                                                
Co-Chair Seaton asked Mr. King to provide the information.                                                                      
                                                                                                                                
Co-Chair Foster asked, "That was who again?"                                                                                    
                                                                                                                                
Mr.  King  responded  that  it   was  the  Anchorage  School                                                                    
District. Dr.  Bishop, who was  online, and her  staff would                                                                    
be able to testify on the issue when they testified.                                                                            
                                                                                                                                
10:08:40 AM                                                                                                                   
                                                                                                                                
DR. DEENA BISHOP, ANCHORAGE  SCHOOL DISTRICT, ANCHORAGE (via                                                                    
teleconference), was happy to answer  any questions. She had                                                                    
sent in  her written testimony.  She indicated that  the key                                                                    
was the  operational side. She  spoke of  Anchorage recently                                                                    
passing a bond initiative. She  was aware that the bond debt                                                                    
reimbursement  program  at the  state  was  on hiatus  until                                                                    
2020. She suggested  that while the bill  was addressing the                                                                    
operational costs of a school  and the movement to close it,                                                                    
Anchorage had a number of  facilities that were built in the                                                                    
1950s, 1960s,  and 1970s. She  reported that about 44  to 45                                                                    
percent  of the  district's facilities  were built  prior to                                                                    
the  1970s. The  district  was finding  buildings that  were                                                                    
used for life  and had to put money into  them. The district                                                                    
was  happy  to  put  money into  them  which  the  community                                                                    
supported. However,  the district wanted to  be responsible.                                                                    
If and when  the state bond debt reimbursement  came on, the                                                                    
district  would ask  the  state for  support  in making  its                                                                    
public schools more efficient.                                                                                                  
                                                                                                                                
Dr.  Bishop continued  with her  testimony relaying  some of                                                                    
the  questions the  district  received  in prior  testimony.                                                                    
Many  questions were  about how  to gain  in the  system and                                                                    
whether  school districts  would participate.  She felt  the                                                                    
district was  taking the hard  road to be responsive  to the                                                                    
community. People loved their schools.  She was aware of how                                                                    
the  city had  grown in  different areas  and where  the new                                                                    
buildout would be.  There might be new  investment needed in                                                                    
other areas  and some reduction  in other  parts. Presently,                                                                    
there was  a report  about the district  being able  to find                                                                    
efficiencies in a  couple of schools. The  bill would assist                                                                    
the school district in the  type of transition that would be                                                                    
a 2-year  process. The  district wanted kids  to be  able to                                                                    
matriculate out, while at the  same time having high quality                                                                    
education. The district would never  receive more money that                                                                    
it received presently. In the  end, it would always be less.                                                                    
She reported that  it was difficult to  convince a community                                                                    
to do it to itself. She  reported that the district had been                                                                    
modeling the issue out to  many schools within the district.                                                                    
The models  found the district  with less money in  the end.                                                                    
In    terms   of    the   district's    accountability   and                                                                    
responsibility to  the state about capital,  she thought the                                                                    
district   needed   to   start   thinking   bigger.   Having                                                                    
acknowledgement through  legislation would help to  make the                                                                    
transitions  good places  to be  for teachers,  parents, and                                                                    
students.                                                                                                                       
                                                                                                                                
10:12:20 AM                                                                                                                   
                                                                                                                                
Representative   Guttenberg  asked   Dr.   Bishop  how   she                                                                    
responded  to the  criticism that  the  school district  had                                                                    
decided to  move to  smaller schools  because of  more money                                                                    
coming in per  student. He indicated she had  taken a gamble                                                                    
that failed. He had heard it was a bail out.                                                                                    
                                                                                                                                
Ms. Bishop responded  that she could continue  to keep small                                                                    
schools.  She   testified  that  Anchorage's   schools  were                                                                    
neighborhood schools. The  district had grown substantially.                                                                    
The district  was putting  up schools  because in  the 1970s                                                                    
and 1980s it  was growing so much. Anchorage  was larger and                                                                    
more spread out,  but there was not a gamble  to build small                                                                    
schools. They  were schools with  400 kids. They  were large                                                                    
schools, as  Anchorage was an  urban district.  The argument                                                                    
was  about  making  good decisions  because  enrollment  was                                                                    
declining.  She could  keep schools  at 50  percent capacity                                                                    
and  the funding  would  continue to  come  from the  state.                                                                    
However, she did  not feel it was right. She  was willing to                                                                    
stand  up and  say the  district believed  in education  and                                                                    
wanted education for the  twenty-first century. The district                                                                    
did not  want to ask tax  payers to put revenue  into taking                                                                    
care of a building the  district did not need. She suggested                                                                    
that  the  district was  looking  at  sharing resources  and                                                                    
pulling staff together to bring  more opportunities to kids.                                                                    
She was  looking at the  situation as  a cup half  full. She                                                                    
would  love  to  speak  to  anyone that  thought  it  was  a                                                                    
failure.  She argued  that  if things  were  left alone  the                                                                    
state would  not be  keeping account  of its  own resources.                                                                    
She  relayed  that in  Anchorage  the  state was  paying  60                                                                    
percent of the district's bill.                                                                                                 
                                                                                                                                
Co-Chair   Foster  recognized   Representative  Tilton   and                                                                    
Representative  Thompson  at  the table  and  Representative                                                                    
Harriet Drummond in the audience.                                                                                               
                                                                                                                                
10:15:25 AM                                                                                                                   
                                                                                                                                
Vice-Chair Gara  thanked Dr.  Bishop for  being so  vocal on                                                                    
behalf of Alaska's students. He  thought the bill made sense                                                                    
for the reasons  that were stated. However,  he wondered how                                                                    
the  legislature  could pass  a  bill  which benefited  some                                                                    
school districts but not others.  His district would benefit                                                                    
but, for  example, Lake and Peninsula  School District would                                                                    
not. It was not  the fault of the bill, as  it was trying to                                                                    
create a problem in the  foundation formula. He asked if Dr.                                                                    
Bishop  preferred to  have the  bill  content be  part of  a                                                                    
package  that  perhaps  included  an increase  to  the  base                                                                    
student   allocation   or   an    upgrade   to   the   pupil                                                                    
transportation formula.  He wondered  about the best  way to                                                                    
provide equity  to schools  across the  state and  a quality                                                                    
education. He wondered  if it would be better to  have it as                                                                    
part of a package with other things included as well.                                                                           
                                                                                                                                
Ms. Bishop responded that school  districts around the state                                                                    
would benefit  from an education omnibus  bill that included                                                                    
smart thinking  about investment in education  whether it be                                                                    
transportation  or the  BSA. The  Anchorage School  District                                                                    
subsidized  transportation  in  the  amount  of  about  $2.5                                                                    
million  per   year  to  provide   the  bussing   system  in                                                                    
Anchorage. In  addition, looking  at investing  in education                                                                    
overall with  an increase in the  BSA and a full  package of                                                                    
education would  be favored. She advocated  for a curriculum                                                                    
bill as  well. She did  not think the  bill did any  harm to                                                                    
districts such  as the Lake  and Peninsula  School District.                                                                    
She was aware  that the Lower Yukon  School District favored                                                                    
the  bill.  She  was  happy to  have  a  conversation  about                                                                    
supporting school districts in many different ways.                                                                             
                                                                                                                                
Vice-Chair Gara thought  the points in the  bill made sense.                                                                    
However,  even  with  the  bill,  unless  there  were  other                                                                    
changes, Anchorage faced about  100 additional staff losses.                                                                    
He asked if he was correct.                                                                                                     
                                                                                                                                
Ms. Bishop  responded that the  school district had  over 90                                                                    
reductions in  the current year.  She elaborated that  50 of                                                                    
the  reductions were  certified  staff including  principle,                                                                    
teachers,  and  counselors. She  opined  that  it took  more                                                                    
money  to do  business  in Alaska.  She  believed the  state                                                                    
should invest  in education,  as it  was the  cornerstone of                                                                    
democracy. She  could not speak  enough about  investment in                                                                    
education.  The operations  and the  BSA were  key paramount                                                                    
programs.                                                                                                                       
                                                                                                                                
Vice-Chair Gara agreed  that the legislation was  a piece of                                                                    
the puzzle  and understood  the inequity the  bill attempted                                                                    
to correct. He appreciated Ms. Bishop's testimony.                                                                              
                                                                                                                                
10:20:29 AM                                                                                                                   
                                                                                                                                
Representative Pruitt  thought the bill was  very important.                                                                    
He  asked Ms.  Bishop if  she  expected a  savings of  about                                                                    
$647,000 with the reduction of one school.                                                                                      
                                                                                                                                
Ms.  Bishop  responded,   "Absolutely."  She  indicated  the                                                                    
district  had   done  some  scaling   out  of   numbers  and                                                                    
elementary was about a $600  savings in the long run looking                                                                    
out 5 years.  Middle schools ranged between  $800 and $1000.                                                                    
She indicated that  the savings was a  moving target because                                                                    
of  the ADM  and  the  formula. She  suggested  that if  the                                                                    
school district was to look  at bringing a building offline,                                                                    
there would be an initial input  of funds to be able to move                                                                    
furniture  or repurpose  another  area.  The district  would                                                                    
have  to upgrade  a  space to  an  acceptable condition  for                                                                    
classroom use.  She also  mentioned not  wanting to  give up                                                                    
long-term maintenance  for a school  not in use,  because it                                                                    
was  still   responsible  for  maintaining  the   space.  In                                                                    
Anchorage, the school buildings were  owned by the city. She                                                                    
suggested  that future  bonds might  help  with re-use.  The                                                                    
school  district was  also considering  moving  some of  the                                                                    
charter  schools that  were  renting  facilities into  other                                                                    
school facilities not  in use. She thought  another piece of                                                                    
legislation  offered first  use  of a  facility for  another                                                                    
purpose.  The school  district was  exploring using  some of                                                                    
the facilities  for other purposes  such as  preschools. The                                                                    
district  was  looking  at  how  to  utilize  facilities  to                                                                    
support education in the entire  city. She concluded that as                                                                    
part of  a long-term plan, it  would be best not  to have to                                                                    
immediately  put  revenue  into   a  building  for  capital.                                                                    
Instead, the  district could work out  the operational costs                                                                    
over time. She  thought the district would try  to provide a                                                                    
2-year   buffer  to   matriculate  kids   out  of   primary,                                                                    
secondary,  and middle  school. The  district would  want to                                                                    
work with the  city, parents, teachers, and  students on the                                                                    
issue. She believed  the district could find  savings in the                                                                    
long-term. The  school district's model  was built off  of a                                                                    
long-term plan.                                                                                                                 
                                                                                                                                
Co-Chair  Foster indicated  that floor  session would  begin                                                                    
momentarily. The  committee would  resume later in  the day.                                                                    
He recessed the meeting to a call of the chair.                                                                                 
                                                                                                                                
10:25:10 AM                                                                                                                   
RECESSED                                                                                                                        
                                                                                                                                
1:36:37 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Representative  Grenn  stated  there   had  been  spurts  of                                                                    
building elementary  schools. He  asked when the  last batch                                                                    
had  been built.  Ms. Bishop  answered it  had been  over 10                                                                    
years.                                                                                                                          
                                                                                                                                
Co-Chair Foster OPENED public testimony.                                                                                        
                                                                                                                                
DR.  LISA  PARADY,  EXECUTIVE DIRECTOR,  ALASKA  COUNCIL  OF                                                                    
SCHOOL  ADMINISTRATORS, spoke  in support  of the  bill. She                                                                    
relayed  that  although  the  bill  impacted  the  Anchorage                                                                    
School District  and the Lower Yukon  School District, there                                                                    
were potentially  other school districts that  would use the                                                                    
legislation  as  a  tool and  had  indicated  interest.  The                                                                    
reason  her entity  supported the  bill was  because it  was                                                                    
voluntary. She appreciated Dr. Bishop  and Dr. Picou looking                                                                    
at efficiencies in their districts  and what they need to be                                                                    
doing  to support  their local  communities.  She hoped  the                                                                    
committee  would consider  the bill  as another  flexibility                                                                    
tool  to provide  for  school districts  if  they deemed  it                                                                    
necessary for their communities.                                                                                                
                                                                                                                                
Vice-Chair  Gara   thanked  Dr.  Parady  for   her  work  in                                                                    
education.  Since she  represented many  different officials                                                                    
across the  state and because  she was testifying  on behalf                                                                    
of the bill,  he assumed that the officials  from areas that                                                                    
would not  benefit from the  bill believed in  lifting other                                                                    
boats up. He asked if he was correct.                                                                                           
                                                                                                                                
Ms.  Parady  replied  that  across  the  state  the  council                                                                    
recognized that  each district  was doing  whatever possible                                                                    
to look at their efficiencies and  what they needed to do in                                                                    
support of  their students.  There was  a general  amount of                                                                    
support  for   school  districts   across  the   state.  The                                                                    
districts were supportive  of doing what was  best for their                                                                    
local communities.  The recognition of local  control, which                                                                    
was held dearly,  was true with the  current legislation. If                                                                    
the  bill  was mandatory  she  would  feel differently.  She                                                                    
continued  that  the  fact  that   the  bill  benefited  the                                                                    
Anchorage  School District  and potentially  other districts                                                                    
and did  not cause  harm to  other districts,  the districts                                                                    
supported each other. She added  that the bill had been well                                                                    
thought out by the districts seeking the bill.                                                                                  
                                                                                                                                
1:42:29 PM                                                                                                                    
                                                                                                                                
Representative   Guttenberg  asked   about  what   a  school                                                                    
district could do in a  situation where inefficiency existed                                                                    
for   a  long   time   and  where   reorganization  into   a                                                                    
consolidation program should be  applied. He did not believe                                                                    
the state  had any tools  to address a situation  where even                                                                    
though  a school  fell below  a certain  level or  a certain                                                                    
attendance  record,  it was  still  more  cost effective  to                                                                    
remain  as-is, even  with inefficiencies.  Ms. Parady  would                                                                    
have to  think about the  response; she was not  prepared to                                                                    
make a recommendation presently.                                                                                                
                                                                                                                                
Co-Chair Seaton was  concerned about unintended consequences                                                                    
or uses.  He had mentioned  subsection l under Section  1 of                                                                    
the  bill. The  section  indicated that  if  the school  was                                                                    
reopened  and reconsolidated  in  the previous  7 years,  it                                                                    
would not be  able to use the tool. He  wondered if any flex                                                                    
schools  or   magnet  schools  had  closed,   reopened,  and                                                                    
reconsolidated.  He asked  if Ms.  Parady was  aware of  any                                                                    
circumstances where his example would  be the case. The last                                                                    
thing  he  wanted to  do  was  create legislation  in  which                                                                    
people could take advantage of  a system for something other                                                                    
than what it was intended.                                                                                                      
                                                                                                                                
Ms.   Parady  thanked   Co-Chair   Seaton  for   considering                                                                    
unintended   consequences.  She   was  not   aware  of   any                                                                    
unintended consequences with SB  216. She believed Mr. King,                                                                    
in  his   work  with  the  districts,   had  considered  the                                                                    
different  consequences. She  reiterated that  the safeguard                                                                    
was that  the bill was  voluntary. She added  that regarding                                                                    
subsection L,  she was not  aware of any  specific situation                                                                    
that currently applied. She offered to follow-up.                                                                               
                                                                                                                                
Co-Chair Seaton appreciated Ms.  Parady following-up with an                                                                    
answer to his question. He wanted  the intent of the bill to                                                                    
be  clearly  stated. He  was  not  opposed to  tweaking  the                                                                    
language  of  the  bill  to  ensure  it  was  as  clean  and                                                                    
effective as possible.                                                                                                          
                                                                                                                                
1:47:27 PM                                                                                                                    
                                                                                                                                
Representative  Ortiz  asked  if  there  was  any  potential                                                                    
impact  particularly  in  rural areas  where  school  choice                                                                    
issues were a concern. He asked  if the bill had been vetted                                                                    
by  members   of  the  association  and   whether  they  had                                                                    
expressed any concerns. Ms. Parady  replied that she was not                                                                    
sure there  would be the capacity  to use the bill  in rural                                                                    
areas. She was  unaware of any situations  that would impact                                                                    
the rural areas. In  meetings with superintendents recently,                                                                    
she reviewed the  bills that were moving  in the legislative                                                                    
session and  did not hear  any concerns expressed  about the                                                                    
bill. She  reiterated that Dr. Bishop  had done considerable                                                                    
work and had a very  good understanding of her district. She                                                                    
had advocated  that for the  Anchorage School  District, the                                                                    
legislation  was  appropriate.  There were  other  districts                                                                    
that saw the  legislation as a potential tool  but would not                                                                    
be mandated. Currently,  the bill would support  a couple of                                                                    
the school districts represented  by the council. There were                                                                    
also other  districts that thought  the bill provided  a new                                                                    
tool. She did  not see any negative impact  to rural Alaska.                                                                    
The bill  was a flexible  tool. The school  districts needed                                                                    
many tools.                                                                                                                     
                                                                                                                                
Representative  Kawasaki spoke  about  a  decline in  school                                                                    
enrollment in  Fairbanks in recent  years. The city  was now                                                                    
expecting a  ramp up  in enrollment. He  asked if  there had                                                                    
been  consideration of  the cyclical  nature of  enrollment.                                                                    
Ms.  Parady   deferred  to   Dr.  Karen   Gaborik  regarding                                                                    
Representative  Kawasaki's  question   about  Fairbanks  and                                                                    
rolling  enrollment.  She  also  deferred  to  Mr.  King  on                                                                    
specifics.                                                                                                                      
                                                                                                                                
Mr.  King  replied  that  the school  districts  had  to  be                                                                    
looking  forward.  In  the  case  of  the  Anchorage  School                                                                    
District  and the  Mat-Su  School  District, they  conducted                                                                    
forward-looking  projections of  their expected  enrollment.                                                                    
Kids did  not show up  instantaneously. They had to  be born                                                                    
first. The state had birth  records and records of Permanent                                                                    
Fund Dividend  (PFD) enrollments.  The state could  see what                                                                    
was  coming. He  noted  that twice  per  year the  Anchorage                                                                    
School District  looked ahead 6  years. He relayed  that the                                                                    
professionals  managing  the  systems   were  aware  of  the                                                                    
issues. He reiterated that it took  2 years to open a school                                                                    
and  2  years to  close  a  school. He  believed  long-range                                                                    
thinking was  required and  reminded members  that districts                                                                    
had to go  through a public process. He thought  it wise for                                                                    
a school district to consult  with its citizens. The process                                                                    
lent  itself  to  long-range thinking.  The  bill  contained                                                                    
provisions  that  did  not  allow a  school  to  reopen  and                                                                    
reconsolidate  a school  earlier  than 7  years. However,  a                                                                    
significant  portion  of the  timeframe  was  just what  was                                                                    
needed  to  start  the  planning.   He  did  not  think  the                                                                    
districts  would be  switching  schools on  and  off like  a                                                                    
light because of the tool provided in the bill.                                                                                 
                                                                                                                                
1:53:50 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg  provided   an  example,  Rampart                                                                    
School.  Rampart, Alaska  was forced  to close  their school                                                                    
because   of  going   below  the   student  minimum.   Young                                                                    
leadership came  in and brought  people back.  They reopened                                                                    
the school and the community  was vibrant again. He wondered                                                                    
if  there were  traditional dollars  available for  shutting                                                                    
down and then  reopening again. He asked how it  worked in a                                                                    
case such as his example.                                                                                                       
                                                                                                                                
HEIDI  TESHNER, DIRECTOR  OF SCHOOL  FINANCE, DEPARTMENT  OF                                                                    
EDUCATION AND  EARLY DEVELOPMENT,  reiterated Representative                                                                    
Guttenberg's question  that if  Rampart was closed  and then                                                                    
reopened because  they had enough students,  would they come                                                                    
to the  department requesting permission to  reopen and have                                                                    
it counted on  the attendance list in October.  A minimum of                                                                    
10 students would be required to open the school.                                                                               
                                                                                                                                
Representative Guttenberg asked  if transitional support was                                                                    
available after  shutting down a  school then  reopening it.                                                                    
He  relayed a  number  of  things were  needed  to reopen  a                                                                    
school.  He  asked  if  transitional  funds  were  available                                                                    
following a forced shutdown in  order to reopen. Ms. Teshner                                                                    
replied that typically the school  district would go through                                                                    
a process  of determining whether  to reopen a  school. They                                                                    
would go through  the process of finding  funding and hiring                                                                    
teachers.  The state  did not  have anything  in the  way of                                                                    
statutes  or the  transitional funding.  They would  have to                                                                    
find money through revenues.                                                                                                    
                                                                                                                                
Representative  Guttenberg   surmised  that  there   was  no                                                                    
support.  One day  they  were  open and  one  day they  were                                                                    
closed. Ms. Teshner answered in the affirmative.                                                                                
                                                                                                                                
Co-Chair  Seaton acknowledged  Representative Gary  Knopp in                                                                    
the audience.                                                                                                                   
                                                                                                                                
Vice-Chair Gara stated  there was a four-year  step down. If                                                                    
a district consolidated a school,  it might suffer a penalty                                                                    
by receiving  less funding under the  foundation formula. He                                                                    
understood the committee  was trying to resolve  the loss of                                                                    
funds for some  of the school districts, He  did not believe                                                                    
the 4-year  step down magically  indicated the  school would                                                                    
find the  exact amount  of efficiencies to  make up  for the                                                                    
loss. He thought that at worst,  it was a way for schools to                                                                    
figure  out how  to adjust  their finances  over the  4-year                                                                    
timeframe. It was unclear how  much efficiency would be made                                                                    
up in 4 years. At worst, it  was a way for schools to figure                                                                    
out how to  adjust their finances: At best,  they would find                                                                    
efficiencies. He was not sure  the district would be able to                                                                    
find  the exact  amount of  efficiencies in  4 years  with a                                                                    
step down.  He asked  if he  understood correctly.  Mr. King                                                                    
replied in the affirmative. There  was nothing to say that 4                                                                    
years was the perfect number.  He had not heard any negative                                                                    
testimony about a 4-year period.  It seemed like 4 years was                                                                    
a reasonable  number. It was  another tool in the  tool box.                                                                    
The bill  was voluntary  and gave districts  the opportunity                                                                    
to go through  the process as they saw  fit. Vice-Chair Gara                                                                    
thought it would  be impossible to hold  someone to modeling                                                                    
more precisely.                                                                                                                 
                                                                                                                                
1:59:09 PM                                                                                                                    
                                                                                                                                
ANDREW LEAVITT, LOWER YUKON SCHOOL DISTRICT, MOUNTAIN                                                                           
VILLAGE (via teleconference), read a letter from the school                                                                     
superintendent:                                                                                                                 
                                                                                                                                
     Dear Senate Education Committee Members,                                                                                   
                                                                                                                                
     I   have   been  a   teacher,   a   principal,  and   a                                                                    
     superintendent in  both rural and urban  Alaska for the                                                                    
     past  twenty years.  On behalf  of the  Regional School                                                                    
     Board,  the   families  of   the  Lower   Yukon  School                                                                    
     District,  and  the staff  of  the  Lower Yukon  School                                                                    
     District, this  testimony is in support  of Senate Bill                                                                    
     216: SCHOOL FUNDING FOR CONSOLIDATED SCHOOLS.                                                                              
                                                                                                                                
     We are in support of  Senate Bill 216 for the following                                                                    
     reasons:                                                                                                                   
                                                                                                                                
                                                                                                                                
        1. Hooper Bay is a growing community with a                                                                           
          population of  1275. The Hooper Bay  School is the                                                                    
          largest school in LYSD.  The current enrollment is                                                                    
          at  449,  well  beyond  the 425  specified  in  AS                                                                    
          14.17.905.                                                                                                            
                                                                                                                                
        2. Every school in Alaska is funded proportionately                                                                   
          according  to its  ADM during  a twenty-day  count                                                                    
          period. According  to the  current language  of AS                                                                    
          14.17.905, Hooper  Bay School  is the  only school                                                                    
          in  Alaska that  actually  gets  penalized for  an                                                                    
          increase in student enrollment.                                                                                       
                                                                                                                                
        3. In current form, the provision in AS14.17.905                                                                      
          that calculates  funding for a school  with an ADM                                                                    
          over  425 as  one  school instead  of two  schools                                                                    
          would equate to a reduction  in revenue of $1 M. A                                                                    
          reduction  in school  funding of  this size  would                                                                    
          have a very detrimental  impact on children in the                                                                    
          Lower Yukon School District.                                                                                          
                                                                                                                                
        4. The Senate Bill 216 provision correction of AS                                                                     
          14.17.905  in Sec  2 would  hold  the children  of                                                                    
          LYSD harmless from  the unintended consequences of                                                                    
          legislation  that  was  written in  2001.  In  the                                                                    
          original   language   of    AS   14.17.905,   this                                                                    
          unintended   consequence   was  anticipated,   and                                                                    
          Hooper   Bay   was   specifically   mentioned   in                                                                    
          deliberation.                                                                                                         
                                                                                                                                
     For these reasons and many  more the Lower Yukon School                                                                    
     District supports  Senate Bill  216 and thanks  you for                                                                    
     elevating the  unintended consequences of  AS 14.17.905                                                                    
     that would have the delirious  impact on the quality of                                                                    
     education offered  to the children  of the  Lower Yukon                                                                    
     School District.                                                                                                           
                                                                                                                                
     Sincerely,                                                                                                                 
                                                                                                                                
     Dr. Rob Picou                                                                                                              
                                                                                                                                
Co-Chair Foster asked Mr. Leavitt  to pass on regards to Dr.                                                                    
Picou. He  was aware the  doctor had been online  earlier in                                                                    
the day.                                                                                                                        
                                                                                                                                
2:01:49 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:02:04 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
REPRESENTATIVE  HARRIETT  DRUMMOND, CHAIR,  HOUSE  EDUCATION                                                                    
COMMITTEE  (via  teleconference),  relayed  that  the  House                                                                    
Education Committee  passed the House companion  bill HB 406                                                                    
sometime  previously.  She  thought some  of  the  questions                                                                    
posed in the  meeting had been interesting.  She spoke about                                                                    
her past  experience as a  school board member.  She relayed                                                                    
that in  the nine-year  period she served  on the  board the                                                                    
Anchorage  School  District's  population grew  from  40,000                                                                    
students to  about 50,000 students.  In that  9-year period,                                                                    
the  Anchorage School  District  built  nearly $500  million                                                                    
worth of  school buildings  including new  school buildings,                                                                    
expansions, renovations, and additions.                                                                                         
                                                                                                                                
Representative Drummond reported that  she participated as a                                                                    
school  Board Member  in 2  district-wide boundary  changes;                                                                    
the middle schools and the high  schools. It had been one of                                                                    
the  most  tumultuous  periods   for  the  Anchorage  School                                                                    
District. The  district built 2  new middle  schools, Mirror                                                                    
Lake  Middle School  and Goldenview  Middle  School, with  a                                                                    
bond  issue that  passed in  1994. The  boundary change  for                                                                    
middle  schools was  not as  difficult because  some of  the                                                                    
middle  schoolers had  new schools  to go  to. However,  the                                                                    
high school  boundaries had to  change because many  of them                                                                    
were overcrowded  and some had  space. The district  had not                                                                    
built new  high schools  in the  9-year period.  The process                                                                    
was terrible because the district  was moving kids around to                                                                    
even  out  the  population between  schools.  She  expressed                                                                    
sympathy  for   Dr.  Bishop  in   having  to   make  similar                                                                    
transitions like the proposed  consolidation of 5 elementary                                                                    
schools  to 4.  Often parents  purchased their  homes to  be                                                                    
close  to a  particular  school. It  was  difficult for  the                                                                    
district to have to tell those  parents that it was going to                                                                    
close that school and their children  would have to get on a                                                                    
bus  to go  to school  a couple  of neighborhoods  away. She                                                                    
opined  that   it  was  disconcerting   and  a   problem  in                                                                    
communities. She  understood Dr.  Bishop's wish to  take the                                                                    
transition slowly.                                                                                                              
                                                                                                                                
Representative   Drummond   continued  to   elaborate   that                                                                    
teachers   traveled  with   their  students.   The  school's                                                                    
administration  positions  went  away  once  the  transition                                                                    
process of a consolidation was  complete. She noted that the                                                                    
Anchorage School District had  the largest square footage of                                                                    
real estate  in the state  of any single  institution. There                                                                    
were  over 90  schools and  several facilities  and support.                                                                    
She advised  proceeding very carefully with  seeking to make                                                                    
large changes.                                                                                                                  
                                                                                                                                
JIM  ANDERSON,  CHIEF  FINANCIAL OFFICER,  ANCHORAGE  SCHOOL                                                                    
DISTRICT,  ANCHORAGE (via  teleconference), clarified  areas                                                                    
of concern that  had been expressed. There  was a perception                                                                    
that Anchorage had  done some poor planning in  the past and                                                                    
was  the reason  the district  was looking  at consolidating                                                                    
schools.  However,   it  had  more   to  do   with  changing                                                                    
demographics and  a declining student  population. Anchorage                                                                    
had  lost  more  than  2,200   students.  The  schools  were                                                                    
originally built based on the  population needs at the time.                                                                    
The district  had not opened  up a new elementary  school in                                                                    
about 20  years or a new  high school in about  10 years. He                                                                    
also noted the  topic of whether Anchorage  would attempt to                                                                    
close a  school, open it back  up in 2 years,  close it, and                                                                    
reopen it in  2 years. He conveyed that the  amount of time,                                                                    
effort,  and energy  to  get  ready to  close  a school  was                                                                    
incredibly time  consuming. He could not  imagine a scenario                                                                    
where it would occur.                                                                                                           
                                                                                                                                
2:07:42 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster CLOSED public testimony.                                                                                        
                                                                                                                                
CSSB 216(FIN)  was HEARD and  HELD in committee  for further                                                                    
consideration.                                                                                                                  
                                                                                                                                
SENATE BILL NO. 102                                                                                                           
                                                                                                                                
     "An Act relating to funding for Internet services for                                                                      
     school districts; and relating to the Alaska higher                                                                        
     education investment fund."                                                                                                
                                                                                                                                
2:08:18 PM                                                                                                                    
                                                                                                                                
SENATOR ANNA MCKINNON, SPONSOR, explained  that SB 102 was a                                                                    
mirror image  of a bill  that was  passed in 2014  to create                                                                    
better  equity  among school  districts  and  being able  to                                                                    
provide and  communicate over an  internet system.  In 2004,                                                                    
the  legislature  created  the  Broadband  Assistance  Grant                                                                    
(BAG) program and  chose a speed of 10  megabits per second.                                                                    
The  bill  before the  committee  moved  the speed  from  10                                                                    
megabits to  25 megabits. She  chose the number  because she                                                                    
had been  told that school  districts around Alaska  had the                                                                    
infrastructure,  the hard  units, available.  The nationally                                                                    
and federally  recommended speed  was 100 megabits.  She was                                                                    
shooting  for that  number  but  was a  long  ways off.  She                                                                    
relayed  that  SB 102  was  written  to provide  educational                                                                    
equity to rural schools. She  wanted to provide rural access                                                                    
with   similar    abilities   to   virtual    education   or                                                                    
communication  as urban  schools currently  had. She  argued                                                                    
that  the best  thing the  bill did  presently was  that for                                                                    
every  dollar the  state contributed,  it leveraged  $8 from                                                                    
the  federal  government  to  try  to  create  equal  access                                                                    
opportunities for Americans.                                                                                                    
                                                                                                                                
Senator MacKinnon  surmised that the most  contentious issue                                                                    
relating to  SB 102 was  the funding source from  the Alaska                                                                    
Higher Education  Fund. There was concern  that, because the                                                                    
legislature had  reduced the interest rate,  the risk level,                                                                    
and  the return  plans for  the Higher  Education Fund,  the                                                                    
bill would somehow  erode the value of  the Higher Education                                                                    
Fund specifically as  it paid out to  the Alaska Performance                                                                    
Scholarship. There  was another bill  that sat in  the House                                                                    
Education Committee  that she did  not think would  move. It                                                                    
tried to  streamline the fund  so that  it only paid  out to                                                                    
the top tier. The committee  chairman, who had the bill, was                                                                    
a  huge advocate  of  education. The  Senate  had offered  a                                                                    
suite of bills,  and SB 102 was  a part of that.  It was the                                                                    
Senate's  belief  that  the Alaska  Performance  Scholarship                                                                    
needed  retooling. She  reported that  the Higher  Education                                                                    
Fund was earning  interest that would meet  the current call                                                                    
on cash  that was  anticipated. For  the following  10 years                                                                    
there  should not  be  a problem  in  providing access.  She                                                                    
referenced  the  Kivalina  School  as an  example.  She  had                                                                    
blamed adults about fighting over  the location or structure                                                                    
of  the building  while students  were sitting  with buckets                                                                    
and water  dripping through their  ceilings. As  adults were                                                                    
arguing  about  such  things,  students  were  put  in  very                                                                    
different  positions.   She  relayed  that  the   state  had                                                                    
designated  general funds  that  had been  spent to  improve                                                                    
education that were  sitting in the Higher  Education Fund -                                                                    
the reason the Senate  Finance Committee recommended the use                                                                    
of those dollars for the project  in SB 102. It leveraged $1                                                                    
to  $8 for  the state's  students at  a time  they currently                                                                    
needed it.                                                                                                                      
                                                                                                                                
Senator  MacKinnon reported  that she  could not  ask for  a                                                                    
general  fund  spend.  She  relayed that  if  the  bill  was                                                                    
changed to reflect  a fund source of general  funds, she was                                                                    
doubtful  there   would  be  enough  support   for  it.  She                                                                    
clarified that  her comment was  not meant as a  threat, but                                                                    
rather as a statement of fact.  The state had some money set                                                                    
aside for  education, and the  Senate chose the  fund source                                                                    
from the Higher  Education Fund because the  BAG was already                                                                    
coming from  that fund.  The state  did not  have additional                                                                    
general fund  dollars to spend on  increased internet speed.                                                                    
She deferred to the committee.                                                                                                  
                                                                                                                                
2:13:32 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster listed individuals available for questions.                                                                     
                                                                                                                                
Representative  Wilson asked,  aside from  the 191  schools,                                                                    
who paid for the internet for the other schools.                                                                                
                                                                                                                                
BRITTANY  HARTMANN,  STAFF,  SENATOR  ANNA  MCKINNON,  asked                                                                    
Representative Wilson to restate her question.                                                                                  
                                                                                                                                
Representative   Wilson   indicated   that  the   bill   was                                                                    
addressing  191 schools.  The  Senator  had mentioned  other                                                                    
school districts making it equal.  She asked about the other                                                                    
schools that  had a  higher megabit  speed. She  wondered if                                                                    
the schools with the higher speeds  paid out of their BSA or                                                                    
other grants.  Ms. Hartmann answered  that their  funds came                                                                    
from  the  federal  E-rate   program,  the  State  Broadband                                                                    
Assistance grant,  and from the  funding formula.  She noted                                                                    
that  the  federal E-rate  program  paid  70 percent  to  90                                                                    
percent of the internet bill.                                                                                                   
                                                                                                                                
Representative  Wilson wondered  if the  difference was  the                                                                    
matching funds. She  wondered if the matching  funds paid by                                                                    
the other schools outside of  the 191 schools were paying it                                                                    
out of their formula monies.  The 191 schools would be given                                                                    
additional funding outside  of the BSA to  make the increase                                                                    
to 25 megabits.                                                                                                                 
                                                                                                                                
Representative Grenn  asked for verification there  were 209                                                                    
schools  needing the  upgrade.  Ms.  Hartmann replied  that,                                                                    
from research  she had done with  the Federal Communications                                                                    
Commission, 197 schools would be upgraded.                                                                                      
                                                                                                                                
Representative  Grenn  asked  about an  expected  turnaround                                                                    
time to get all of  the schools upgraded. Ms. Hartmann would                                                                    
have  to  direct  his question  to  the  telecom  companies.                                                                    
However, if  the money was  provided, the upgrades  would be                                                                    
purchased immediately or in the following year.                                                                                 
                                                                                                                                
2:16:40 PM                                                                                                                    
                                                                                                                                
Senator  MacKinnon noted  that each  school would  handle it                                                                    
differently.  The   money  was   for  the  speed,   not  for                                                                    
construction, hardwire, softwire, or  building out a system.                                                                    
That  was what  providers did  on their  own. The  providers                                                                    
could access  other grants at  the federal level to  be able                                                                    
to provide sources. The bill  was about purchasing speed for                                                                    
a school  district. Currently,  school districts  were using                                                                    
BSA money to  provide whatever speed they  deployed to their                                                                    
students. She  reported that  buffering was  occurring while                                                                    
live streaming videos and other  things. The bill provided a                                                                    
way,  if  the legislature  looked  at  virtual education  or                                                                    
classroom-to-classroom  peers  around  the  world,  Alaska's                                                                    
rural  communities would  have the  needed speed  to have  a                                                                    
conversation without latency and delay.                                                                                         
                                                                                                                                
Representative Guttenberg  asked if Department  of Education                                                                    
and  Early Development  could  bring  a spreadsheet  showing                                                                    
what the state was currently  paying for what speeds, the E-                                                                    
rate,  the  local  contribution,   and  the  amount  of  the                                                                    
broadband  Access Grant  (BAG). Ms.  Hartmann answered  that                                                                    
she had  the information  containing the current  E-rate and                                                                    
BAG per school  district, and the total cost  to each school                                                                    
district. She  would provide  the information  following the                                                                    
meeting.                                                                                                                        
                                                                                                                                
Senator MacKinnon  noted there  was information  provided by                                                                    
Co-Chair Hoffman  in member  packets titled  "Alaska Schools                                                                    
Under  25MBPS  -  Federal Communication  Commission,  Public                                                                    
Reports,  2016"  (copy  on file)  that  showed  the  schools                                                                    
listed  with under  25 megabits  under the  federal program.                                                                    
She  could provide  a copy  if  he did  not have  it in  his                                                                    
packet.                                                                                                                         
                                                                                                                                
Representative Guttenberg noted that  in statute speed would                                                                    
increase  to  25  megabits,  which was  not  a  standard  by                                                                    
itself. He  conveyed that upload speed,  download speed, and                                                                    
latency were almost  as critical as the  download speeds. He                                                                    
thought  she had  reported that  the additional  funds would                                                                    
not  be used  to pay  for upgrades.  If they  could pay  for                                                                    
upgrades  currently,  he wondered  why  they  were not.  The                                                                    
state would  not be  paying for fiber  or new  equipment. He                                                                    
wondered why they were not at a certain level.                                                                                  
                                                                                                                                
2:19:57 PM                                                                                                                    
                                                                                                                                
Senator MacKinnon answered that  all communities had to make                                                                    
choices about where they deployed  their assets. Some of the                                                                    
assets  were   being  deployed  in  classrooms   to  support                                                                    
teachers.  They were  making individual  financial decisions                                                                    
Some  schools had  1000 megabits  because the  community had                                                                    
taxing  ability  to  raise revenues.  She  deferred  to  her                                                                    
staff.                                                                                                                          
                                                                                                                                
Representative Guttenberg  asked why  the ISP  providers did                                                                    
not  offer  the  1000  megabits presently.  He  stated  that                                                                    
everybody  on fiber  was capable  of  getting 1000  megabits                                                                    
including  Kenny  Lake. He  asked  what  was preventing  the                                                                    
providers  from  offering  higher  speeds  since  they  were                                                                    
available  without  needing  any  facility  change  outs  or                                                                    
additional capital projects.                                                                                                    
                                                                                                                                
Senator  MacKinnon answered  it was  a business.  Businesses                                                                    
offered  a suite  and  a  package for  a  certain amount  of                                                                    
money.  There   was  a  contract  established   between  the                                                                    
district and  the provider based  on the cost to  deploy the                                                                    
resource at a  particular location. There was  fiber in some                                                                    
areas, satellite  in other areas, and  microwave stations in                                                                    
other  areas. Each  area  had  its own  costs.  There was  a                                                                    
relationship  with someone  selling  something, internet  at                                                                    
various speeds.  She felt personally  that she  overpaid for                                                                    
her service,  but it was  an individual choice for  her. One                                                                    
of  her  family members  had  elected  to discontinue  cable                                                                    
service due to  the cost. It was up to  the school districts                                                                    
what they were willing to pay.                                                                                                  
                                                                                                                                
Senator  MacKinnon furthered  that there  might not  be 1000                                                                    
megabits  available  at all  of  the  schools. She  believed                                                                    
there was up  to 25 megabits based on  microwave, fiber, and                                                                    
satellite  systems that  the state  could  raise the  lowest                                                                    
level  to  a  group  of  districts  and  provide  additional                                                                    
funding to pay for the  additional speed. She found that the                                                                    
costs would go down because the  fixed cost for a company to                                                                    
try to recover  the rate they were charging  was spread over                                                                    
more megabits.  The costs would  go down. She  reported that                                                                    
in 2014,  multi-million dollars were  fronted by  the state.                                                                    
Once  the fixed  costs were  covered over  time, the  actual                                                                    
speed  rate dropped,  and school  districts' bills  dropped.                                                                    
She deferred to her aide.                                                                                                       
                                                                                                                                
2:23:33 PM                                                                                                                    
                                                                                                                                
Ms. Hartmann  replied that  she had  information from  FY 15                                                                    
through FY  18 regarding BAG  statistics. In FY 15  the cost                                                                    
was $3.6 million, in  FY 16 the cost was $2.6,  in FY 17 the                                                                    
cost  was $2.3  million,  and in  FY 18  the  cost was  $2.2                                                                    
million. She reported  that there was a  decrease every year                                                                    
of the BAG program.                                                                                                             
                                                                                                                                
Representative   Ortiz  applauded   Senator  MacKinnon   for                                                                    
bringing the  bill forward.  He spoke  to the  importance of                                                                    
broadband. He  was concerned about  where the  funding would                                                                    
come from.  He pointed to appropriation  language in Section                                                                    
3 of  the bill. He  asked about  the current balance  of the                                                                    
Higher  Education  Fund.   Senator  MacKinnon  replied  $336                                                                    
million.                                                                                                                        
                                                                                                                                
Representative  Ortiz   asked  if  it  had   initially  been                                                                    
capitalized at $400 million. He  queried if she had concerns                                                                    
about the solvency  of the fund and the  continuation of the                                                                    
Alaska Performance Scholarship Program.                                                                                         
                                                                                                                                
Senator  MacKinnon answered,  not for  10 years.  She stated                                                                    
that Alaska  needed to  get its fiscal  house in  order. The                                                                    
bill  was a  way to  create equity  over time.  The interest                                                                    
currently  being earned  on the  Higher  Education Fund  out                                                                    
into  the  future  looked  like it  would  cover  the  cost,                                                                    
especially  if  the  legislature deployed  the  resource  to                                                                    
receive matching  funds and raised  the megabits from  10 to                                                                    
25.  Past  experience  showed   that  when  the  legislature                                                                    
invested  money  at  the  10  megabits,  the  state  paid  a                                                                    
significant  amount  up front.  Over  the  years it  started                                                                    
sliding down and the school  districts were getting the same                                                                    
speeds. She  believed the  state would  see a  similar drop.                                                                    
Senator MacKinnon noted that Senator  Olson carried the bill                                                                    
on the  Senate Floor but was  not able to address  the issue                                                                    
in House Finance  because of the timing of  the meeting. The                                                                    
Senate saw  the idea  as emeritus. She  copied his  bill and                                                                    
added the  15 megabit  speed up to  25 megabits  because she                                                                    
saw the  merit of the  bill passed  in 2014. She  hoped that                                                                    
the expenses would reduce over  time and that the fund would                                                                    
be whole. She emphasized that  the finance committee had not                                                                    
chosen  to   use  the  Higher   Education  Funds   on  other                                                                    
proposals. However, the other  BAG programs were funded from                                                                    
the Higher  Education Fund, which  was the reason  she chose                                                                    
it as the source for her proposal.                                                                                              
                                                                                                                                
2:27:39 PM                                                                                                                    
                                                                                                                                
Representative Wilson referred to  a handout that showed the                                                                    
annual call for  the internet, the E-rate,  the BAG portion,                                                                    
and the school  portion. She noted that it was  only for the                                                                    
197 schools. She  wondered if there was  any information for                                                                    
the  other districts  outside of  those that  serve the  197                                                                    
schools. Ms. Hartmann answered she  would follow up with the                                                                    
information.                                                                                                                    
                                                                                                                                
Representative Wilson wondered why the  bill did not use the                                                                    
Power Cost Equalization (PCE) Fund  as opposed to the Higher                                                                    
Education Fund. She  suggested that the nature  of the issue                                                                    
had to do  with a utility. The Power  Cost Equalization fund                                                                    
balance  equaled  $1 billion.  She  opined  that the  Higher                                                                    
Education Fund had  been robbed for several  things. She was                                                                    
concerned  the  state would  have  more  problems within  10                                                                    
years.                                                                                                                          
                                                                                                                                
Senator  MacKinnon  answered  that  the PCE  Fund  had  been                                                                    
modified  the  preceding  year to  prioritize  spending  and                                                                    
reduced  interest  earnings  on   it.  It  provided  heating                                                                    
assistance and  applied to  other items  to reduce  costs in                                                                    
rural Alaska.  In addition, the  fund was being  shared with                                                                    
all  communities  including Fairbanks,  Wrangel,  Anchorage,                                                                    
and  other  communities.   All  communities  qualifying  for                                                                    
community revenue sharing were  receiving funds from the PCE                                                                    
Fund.  A bill  had  been structured  through Senate  Finance                                                                    
with her support  in advancing it to provide  energy use and                                                                    
community assistance.                                                                                                           
                                                                                                                                
Representative Wilson stated that  the Higher Education Fund                                                                    
had  not made  enough interest  to pay  for the  scholarship                                                                    
program  and  the  needs-based program.  She  was  concerned                                                                    
about taking  more out of  the fund. She relayed  a personal                                                                    
scenario about her internet service  at home. She also spoke                                                                    
about   her  son's   internet  service.   She  agreed   with                                                                    
Representative Guttenberg about the  speed of service. Speed                                                                    
was necessary. She  thought the amount could go  down, but a                                                                    
commitment  of more  than $10  million was  being discussed.                                                                    
She was  very concerned  about fairness. She  continued that                                                                    
districts  all over  Alaska were  paying for  whatever speed                                                                    
they had.  She spoke about  fairness. She was  concerned the                                                                    
bill  only  pertained  to  197  schools.  There  were  other                                                                    
schools trying  to do the right  thing. She did not  want to                                                                    
jeopardize   an   important   program.   She   thought   the                                                                    
scholarship  programs were  equally  important for  B and  C                                                                    
students. She did not want to negatively impact them.                                                                           
                                                                                                                                
2:31:35 PM                                                                                                                    
                                                                                                                                
Senator MacKinnon  spoke about a conversation  pertaining to                                                                    
equity  for  rural  states and  about  equity  in  education                                                                    
opportunities.  She reported  that 100  megabits per  second                                                                    
(mbps)  was the  national  recommendation. However,  because                                                                    
Alaska's  smaller communities  in more  rural locations  did                                                                    
not  have the  same advantage  of fiber  that could  provide                                                                    
lower  cost   service,  the  bill  was   only  providing  an                                                                    
opportunity of  25 percent  of the  national recommendation.                                                                    
She  agreed  there  was  consternation  around  the  funding                                                                    
source.  The  funds were  set  aside  for higher  education.                                                                    
Should the legislature solve  the state's fiscal challenges,                                                                    
there was an  opportunity to place more money  back into the                                                                    
fund  to  continue  to  provide  resources  for  the  Alaska                                                                    
Performance  Scholarship, the  needs-based Alaska  Education                                                                    
Grant, and the BAG program.  She understood there might be a                                                                    
negative draw on  the fund and that it might  eat the corpus                                                                    
of the money  placed in the account. However,  she felt that                                                                    
providing equity for those presently  in the system would be                                                                    
helpful.                                                                                                                        
                                                                                                                                
Representative  Pruitt spoke  about the  funding source.  He                                                                    
mentioned  a Legislative  Finance Division  analysis of  the                                                                    
impact  of  SB 102  on  the  fund.  By 2023,  the  estimated                                                                    
investment  earnings would  be just  over $15  million while                                                                    
the total  appropriations would be $35  million, $20 million                                                                    
being drawn down. He reported the  total value at the end of                                                                    
2023  would  be $245  million.  He  had concerns  about  the                                                                    
impact on the  ability to earn with less in  the account and                                                                    
the  residual  effects  of being  able  to  provide  various                                                                    
services.  He thought  Senator McKinnon  had  said that  the                                                                    
earnings  could be  covered by  what was  being asked  to be                                                                    
drawn down. He  thought it looked like in  the estimate that                                                                    
what was provided  in the bill could fit  within the amount.                                                                    
However, there were  other items still being  drawn from the                                                                    
fund including the Alaska  Performance Scholarship (APS). He                                                                    
asked how  he could say  it was fiscally responsible  if the                                                                    
goal  was to  be able  to provide  scholarships in  the long                                                                    
term.                                                                                                                           
                                                                                                                                
2:35:03 PM                                                                                                                    
                                                                                                                                
Senator MacKinnon  answered that if students  were not ready                                                                    
to go to college, they had  to take remedial courses. In the                                                                    
Anchorage  area  there  had been  a  newspaper  report  that                                                                    
showed  that  reading  and  math  were  below  the  national                                                                    
average. The  bill provided an opportunity  to help increase                                                                    
the  chances that  those that  were ready  to go  to college                                                                    
would be  prepared and  not have  to take  remedial classes.                                                                    
She believed the fund had been  used as a funding source for                                                                    
two years  for items  that were  not education  related. The                                                                    
items had dwindled  the fund and the fund had  been used for                                                                    
those items  in response  to Alaska  not solving  its fiscal                                                                    
challenges. She  reported that the state  had better numbers                                                                    
at the beginning  of the year. But the fund  had changed its                                                                    
earnings  estimation.  She  explained   that  when  she  had                                                                    
originally  started with  the  bill,  the interest  earnings                                                                    
were  meeting  everything  in  the  fund.  The  numbers  had                                                                    
dropped, and  she had  received them  the previous  day. She                                                                    
was looking  for equity  for all  Alaskans, mostly  those in                                                                    
small communities.  She relayed that all  of Alaska's school                                                                    
districts  could   qualify  for  the  E-rate.   It  was  the                                                                    
committee's  decision whether  it  was  the correct  funding                                                                    
source. The  Senate chose to  use the Higher  Education Fund                                                                    
as  the funding  source inside  of a  comprehensive look  at                                                                    
education with a suite of  bills. The other legislation that                                                                    
would affect  this fund  was not  before the  committee. She                                                                    
admitted  it  was  a  bit  out of  sequence  with  what  the                                                                    
Senate's ideas were around the issues.                                                                                          
                                                                                                                                
2:37:18 PM                                                                                                                    
                                                                                                                                
Representative Pruitt  mentioned remedial classes  needed by                                                                    
University of Alaska students. In  Anchorage a large portion                                                                    
of students likely came from  the Anchorage and Mat-Su areas                                                                    
with access  to broadband. He  thought it spoke to  a larger                                                                    
issue than whether  there was access to  broadband. He noted                                                                    
a   policy  call   about  whether   to  continue   with  the                                                                    
scholarship  fund. He  asked  if  Senator MacKinnon  thought                                                                    
going forward  with the bill  without another  component was                                                                    
appropriate. He reported having  objected to using the fund.                                                                    
He questioned  whether the committee should  go forward with                                                                    
only one piece of a larger package.                                                                                             
                                                                                                                                
Senator MacKinnon commented that each  bill stood on its own                                                                    
merits. She deferred  to the deliberation of  the House. She                                                                    
thought she  had made  a fair  case for  smaller communities                                                                    
that  were  paying  high  costs  for  providing  educational                                                                    
services. They  received the same  BSA as  other communities                                                                    
that  had taxing  authority  to add  to  their schools.  She                                                                    
noted that all  schools in Alaska qualified  for E-rate. The                                                                    
cost for  internet speed in  larger communities was  less or                                                                    
might be less  than in rural Alaska. She  indicated that she                                                                    
was  trying  to benefit  all  students.  The goal  from  the                                                                    
Senate Finance Committee was to  try to do what was possible                                                                    
to support  education. She  would explain  to people  in her                                                                    
district  that equal  was equal  and being  able to  provide                                                                    
broadband access  without latency  and buffering  meant that                                                                    
the  state could  deploy a  state  of the  art teacher  into                                                                    
classrooms  that  might  or might  not  currently  have  the                                                                    
option.                                                                                                                         
                                                                                                                                
2:41:03 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Gara  appreciated  the  rural  equity  goal  the                                                                    
senator was trying to achieve.  He wondered if 25 mbps would                                                                    
be  enough  to allow  for  a  large classroom  setting.  Ms.                                                                    
Hartmann thought  the question would be  better addressed to                                                                    
the telecom  companies or  DEED. She had  been told  that it                                                                    
took 4  mbps to have  a face-to-face interactive  video. The                                                                    
bill would help increase the ability to livestream.                                                                             
                                                                                                                                
Vice-Chair Gara reported having spent  a fair amount of time                                                                    
in  rural  Alaska  and  watched the  little  circle  on  his                                                                    
computer  go around  and  around.  He asked  if  all of  the                                                                    
school  districts listed  with  less than  25 mbps worth  of                                                                    
broadband  had   enough  infrastructure  from   the  telecom                                                                    
companies to  provide the 25  mbps. He wondered  if internet                                                                    
access would slow down. He  asked if the broadband available                                                                    
to others would  slow down or be eaten up.  He also wondered                                                                    
if  the telecom  infrastructure would  have to  be upgraded.                                                                    
Ms.  Hartmann  responded  that  she  had  recently  uploaded                                                                    
letters from  the telecom companies that  currently provided                                                                    
services to the 197 schools that  they were capable to go up                                                                    
to  25 mbps  with  current infrastructure.  She  also had  a                                                                    
letter from  the Alaska  Telecom Association  confirming the                                                                    
same thing. Regarding Vice-Chair  Gara's other question, she                                                                    
would have to research or  defer the question to the telecom                                                                    
companies. Vice-Chair Gara  did not know the  answer and did                                                                    
not expect her to either.                                                                                                       
                                                                                                                                
2:44:24 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg asserted  that providing broadband                                                                    
across Alaska was likely the  most important thing the state                                                                    
could  do for  its students.  He reported  paying more  than                                                                    
$110  for 4  megabytes. He  indicated that  the GCI  map was                                                                    
inaccurate.  He  mentioned  that  3  years  prior,  the  FCC                                                                    
adopted the  industry written Alaska  plan. Over  the course                                                                    
of  10 years  GCI  would receive  $1.350  billion. He  spoke                                                                    
about the  telecom companies building  infrastructure, which                                                                    
was supposed  to increase coverage  in remote  locations. He                                                                    
noted living  5 miles from  the university and  reported not                                                                    
having access  to service. He  was interested in  seeing the                                                                    
cost associated with the schools.                                                                                               
                                                                                                                                
Representative  Guttenberg  wondered   if  the  Senator  had                                                                    
queried the  telecom companies about where  they intended to                                                                    
build  out in  communities. The  Alaska plan  was looked  at                                                                    
critically by  some. He  indicated there  would be  a 5-year                                                                    
look back  in about  2 years. He  thought $1.350  billion in                                                                    
subsidies with a minimal amount  of build out was way beyond                                                                    
what  was being  considered  in the  bill  ($15 million  per                                                                    
year).  He  asked  if  the senator  had  asked  the  telecom                                                                    
companies  about   where  the   build  outs   would  enhance                                                                    
communities without additional costs.                                                                                           
                                                                                                                                
Senator   MacKinnon   thought   the  providers   that   were                                                                    
participating in  the Alaska plan  should be  consulted. The                                                                    
telecom companies participating in  the Alaska Plan received                                                                    
a  benefit  from the  federal  government,  which came  with                                                                    
strings attached. She noted that  for people concerned about                                                                    
the price of internet service going  up, the FCC who ran the                                                                    
federal E-rate program,  showed all of its  data online. The                                                                    
prices reflected the cost continuing to go down.                                                                                
                                                                                                                                
Senator MacKinnon  reported that the  FCC had a  rule called                                                                    
the "Lowest  Corresponding Price  Rule (LCP).  She explained                                                                    
that the LCP was defined as  the lowest price that a service                                                                    
provider  charged  to  non-residential  customers  who  were                                                                    
similarly  situated  to   a  particular  applicant,  school,                                                                    
library, or  consortium for similar services.  The rule also                                                                    
stated that service providers could  not charge applicants a                                                                    
price  above  the  LCP  for  E-rate  program  services.  She                                                                    
indicated that the state could  not force people to build in                                                                    
all  rural  communities  in the  state.  There  were  active                                                                    
choices  occurring  with  how many  individuals  were  in  a                                                                    
location  to receive  service.  The  federal government  was                                                                    
trying to  extend the  stretch and  trying to  regulate that                                                                    
the  lowest  cost  structure was  still  provided  to  those                                                                    
receiving  the services.  She offered  to reach  out to  the                                                                    
providers  on behalf  of the  House  Finance Committee.  She                                                                    
thought their  plan had  investment in  infrastructure costs                                                                    
every  year.  However,  the  state   did  not  direct  where                                                                    
providers built out.                                                                                                            
                                                                                                                                
2:48:16 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg   relayed  that  the   state  was                                                                    
providing $1.3 billion  in subsidies which did  not cover E-                                                                    
rate, rural  clinics, or FirstNet.  He thought there  was an                                                                    
intangible public  purpose for  the legislature to  see that                                                                    
an  infrastructure  build-out  happened. He  frequently  had                                                                    
discussions  with  industry people  in  which  he posed  the                                                                    
question  about  when  infrastructure  would  be  built.  He                                                                    
reported  that  there was  no  square  answer from  industry                                                                    
folks. He reiterated the  need for additional infrastructure                                                                    
with the amount of money  going into Alaska in subsidies. He                                                                    
indicated that the  chairman of the FCC  criticized the lack                                                                    
of  infrastructure build-out  in Alaska.  He thought  it was                                                                    
untenable that, at the end  of a 10-year period, there would                                                                    
be no  substantial infrastructure  in place. He  felt policy                                                                    
makers would  be faced with  continued escalating  costs. He                                                                    
agreed  with  the  bill  sponsor   that  Alaska's  kids  and                                                                    
businesses  were owed  an infrastructure  to  allow them  to                                                                    
function  at  their highest  level.  He  reiterated that  he                                                                    
lived  in sight  of  the University  and  the mappings  were                                                                    
inaccurate.   He   continued   to  criticize   the   telecom                                                                    
companies. He appreciated the senator's efforts.                                                                                
                                                                                                                                
Senator  MacKinnon   clarified  she  was   not  representing                                                                    
telecom companies. The bill  represented students and school                                                                    
districts in  Alaska. She believed that  the legislature had                                                                    
reached  out to  telecom  companies to  understand how  they                                                                    
were providing service  and some of their  challenges. In no                                                                    
way was  she trying  to direct a  single dollar  towards any                                                                    
individual  private sector  person. However,  private sector                                                                    
companies were  providing the services. She  emphasized that                                                                    
she  was not  in communication  with telecom  providers with                                                                    
the exception of asking questions.                                                                                              
                                                                                                                                
Representative  Guttenberg clarified  that he  had not  been                                                                    
inferring anything.                                                                                                             
                                                                                                                                
Representative   Wilson  wanted   to   understand  how   the                                                                    
calculation had been  made for the figure  of $13.4 million.                                                                    
She suggested that $2.5 million  applied to the 197 schools.                                                                    
She  had hoped  to  have a  discussion  about other  options                                                                    
after  seeing  how  the  calculation  was  applied.  Senator                                                                    
MacKinnon  answered  that  the department  was  prepared  to                                                                    
address the fiscal note.                                                                                                        
                                                                                                                                
2:52:43 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster OPENED public testimony.                                                                                        
                                                                                                                                
DAMON  HARGRAVES,  KODIAK  ISLAND BOROUGH  SCHOOL  DISTRICT,                                                                    
KODIAK  (via teleconference),  testified in  support of  the                                                                    
bill. He  relayed that in  Kodiak bandwidth  offered options                                                                    
for  its students.  Many of  the district's  sights had  one                                                                    
high  school teacher  available locally.  Bandwidth provided                                                                    
access  to high  quality teachers  and provided  students in                                                                    
the smaller  schools with access  to as  many as a  dozen or                                                                    
more  teachers. He  continued  that  live video  connections                                                                    
between students  and teachers  for each distance  class was                                                                    
crucial. The  Kodiak School  District was  currently limited                                                                    
to  2  simultaneous  video connections  at  most  sites.  An                                                                    
increase to 25 mbps would help  the district to deliver 4 or                                                                    
more  simultaneous connections  to  each of  its sites.  The                                                                    
district, with  increased bandwidth,  would also be  able to                                                                    
offer more classes including welding.  The course was taught                                                                    
and facilitated by  a teacher in Kodiak at  the high school.                                                                    
He continued he was able  to offer a better experience. [The                                                                    
testifier's call dropped off].                                                                                                  
                                                                                                                                
2:54:45 PM                                                                                                                    
                                                                                                                                
LUKE MEINERT, YUKON-KOYUKUK  SCHOOL DISTRICT, FAIRBANKS (via                                                                    
teleconference),  spoke in  favor  of the  bill. He  thanked                                                                    
members  for supporting  the bandwidth  assistance grant  in                                                                    
the  past.  The grant  provided  a  positive impact  on  the                                                                    
educational   opportunities   the  district   provided   its                                                                    
students. Because  of this impact, he  encouraged members to                                                                    
support  SB 102.  The Yukon-Koyukuk  School District  had 10                                                                    
rural schools in  the interior of Alaska. 98  percent of the                                                                    
students in  the villages  were Athabaskan and  8 of  the 10                                                                    
villages  were  only reachable  via  air  service, with  all                                                                    
school internet being delivered  by satellite or a microwave                                                                    
connection.  Very  few  homes   in  the  area  had  internet                                                                    
connections  and there  was no  cell service.  Each school's                                                                    
internet  costs for  a 10-megabit  circuit  was $16,000  per                                                                    
location or $160,000  for each of the  district's 10 schools                                                                    
prior to  E-rate and the  BAG contribution. The  internet at                                                                    
the school  was a  lifeline for their  communities. Securing                                                                    
more bandwidth for the district's  students was not possible                                                                    
without assistance, given  the district's challenging budget                                                                    
constraints.  He relayed  the estimated  costs of  expanding                                                                    
the bandwidth without assistance.  The district was more and                                                                    
more reliant on internet service  for education. He spoke to                                                                    
the  equitability   of  educating  rural   students  through                                                                    
distance  learning  with  additional  bandwidth  being  made                                                                    
accessible.  He  indicated  that   to  continue  to  improve                                                                    
student  outcomes  additional  bandwidth was  necessary.  He                                                                    
asked that  members consider supporting  an increase  to the                                                                    
bandwidth from  10 megabits to  25 megabits. He  thanked the                                                                    
committee.                                                                                                                      
                                                                                                                                
Representative Guttenberg asked  who provided the district's                                                                    
bandwidth. Mr.  Meinert answered,  "DRS Technologies  is our                                                                    
carrier."                                                                                                                       
                                                                                                                                
2:57:47 PM                                                                                                                    
                                                                                                                                
DAVID NEESE, SELF,  ANCHORAGE (via teleconference), believed                                                                    
increasing  bandwidth was  a  good  idea. However,  internet                                                                    
service was provided by 2  companies in Alaska, GCI and DRS.                                                                    
He relayed that DRS had the  ability to increase it but cost                                                                    
much   more.   None  of   the   letters   included  in   the                                                                    
documentation showed what the amount  would be to go from 10                                                                    
to 25 megabits. He reported  that 4 megabits per device were                                                                    
necessary  to  have  video.  If   a  school  had  5  devices                                                                    
streaming could occur on 4  of them. Other activities on the                                                                    
internet  such  as  accounting would  likely  drop  off.  He                                                                    
referred to  the last  section of the  bill that  noted "any                                                                    
amount" from  the fund.  He believed  those words  should be                                                                    
removed  or a  cap should  be included.  He argued  that the                                                                    
legislature  would be  funding  internet at  the school  for                                                                    
elementary kids  and taking  it away  from college  kids. He                                                                    
reported that  at Dot  Lake School, the  cost per  child was                                                                    
$30,000 for  internet at  10 megabits.  He argued  that "any                                                                    
cost"  would  be  difficult. He  encouraged  legislators  to                                                                    
consider  that   the  state  was  helping   to  subsidize  a                                                                    
monopoly, GCI in most of  the villages, instead of promoting                                                                    
competition. He  relayed that ACS  had sent a letter  to the                                                                    
FCC complaining  that GCI  had a  monopoly in  rural Alaska.                                                                    
The  bill did  nothing  to  break the  monopoly  up. He  was                                                                    
worried about the  fund source to solve the  problem. He did                                                                    
not support  the bill  in its  current from  and recommended                                                                    
looking at another funding source.                                                                                              
                                                                                                                                
3:01:05 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:01:44 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Mr.  Hargraves continued  his earlier  testimony. He  shared                                                                    
that  the  Kodiak  Island Borough  School  District  offered                                                                    
Career Technical  Education (CTE) courses  including classes                                                                    
in welding  through distance, which were  heavily reliant on                                                                    
connectivity. The school was the  best location for reliable                                                                    
internet. He shared  that many home school  students came in                                                                    
to use  the internet.  He noted a  decline in  enrollment in                                                                    
rural schools. He attributed it  partial to limited options.                                                                    
Increased     bandwidth    would     increase    educational                                                                    
opportunities for students.  He also mentioned opportunities                                                                    
for professional  development was impacted  by connectivity.                                                                    
Kodiak had  cut down on travel  for professional development                                                                    
and  was now  focused  on  videoconferencing capability  for                                                                    
training. He  relayed that the  bill would impact  8 schools                                                                    
within his  district. He anticipated that  the Kodiak Island                                                                    
School District would see a  benefit of about $400,000. Upon                                                                    
the passage of the bill,  the school district would be ready                                                                    
to  implement   immediately;  it  had  the   personnel,  the                                                                    
expertise,  and  the  local  hardware  in  place.  He  asked                                                                    
members to support the bill.                                                                                                    
                                                                                                                                
Representative  Guttenberg  asked   what  the  district  was                                                                    
paying  for 10  megabits  currently. Mr.  Hargraves did  not                                                                    
have the numbers on hand.                                                                                                       
                                                                                                                                
3:04:59 PM                                                                                                                    
                                                                                                                                
BILL BURR,  DELTA/GREELY SCHOOL DISTRICT AND  ALASKA SOCIETY                                                                    
OF   TECHNOLOGY   IN    EDUCATION,   DELTA   JUNCTION   (via                                                                    
teleconference), testified in support  of the bill. He spoke                                                                    
to the  technical side of  delivering broadband,  going from                                                                    
10 to  25 mmbps. The  cost of increasing bandwidth  in rural                                                                    
areas  was high.  Flat  funding did  not  afford the  school                                                                    
district  to put  money towards  increased internet  service                                                                    
when other  costs were higher.  He pointed out the  ratio of                                                                    
5:8:1  federal dollars  through  the  E-rate program.  Every                                                                    
dollar set  aside to increase  the bandwidth came  with more                                                                    
money from the federal government.  He believed the bill was                                                                    
an  opportunity that  should  not be  passed  up. He  talked                                                                    
about  the incredible  opportunities  that  would come  with                                                                    
additional bandwidth. He needed  bandwidth in order to reach                                                                    
out and  participate in  the modern  world. He  stressed the                                                                    
importance of  the funding. He shared  that the Delta/Greely                                                                    
School  District was  not one  of the  BAG communities.  The                                                                    
district was in  full support of rural  communities that did                                                                    
not have schools at 25 megabits.                                                                                                
                                                                                                                                
Vice-Chair  Gara  indicated  that   his  interest  was  that                                                                    
students would be  able to participate live  in a classroom.                                                                    
He thought  Mr. Burr had  stated that his district  had this                                                                    
level  of internet.  He  asked  if it  worked  well for  the                                                                    
district to  provide live classroom participation.  Mr. Burr                                                                    
replied that the  school district had 250  megabits of data.                                                                    
It had the ability to do  desktop video inside the school as                                                                    
well  as  with  other   communities  and  other  states  and                                                                    
countries. The district's level  was higher than 25 megabits                                                                    
and  was  very functional.  Vice-Chair  Gara  would wait  to                                                                    
speak with a  district that had 25 megabits.  He thanked the                                                                    
testifier.                                                                                                                      
                                                                                                                                
3:09:40 PM                                                                                                                    
                                                                                                                                
DR.  LISA  PARADY,  EXECUTIVE DIRECTOR,  ALASKA  COUNCIL  OF                                                                    
SCHOOL ADMINISTRATORS,  spoke in strong support  of the bill                                                                    
to increase  the floor of megabit  speed from 10 to  25. She                                                                    
shared that  she had  previously worked for  6 years  on the                                                                    
North  Slope  bringing  the  original  Broadband  Assistance                                                                    
Grant forward. At the time,  there were villages with only 1                                                                    
to 3 megabits  which made it unrealistic  to deliver certain                                                                    
content. It  was decided that  10 megabits would  become the                                                                    
new floor for  rural Alaska. She thought  it was appropriate                                                                    
to  continue to  incrementally  lift the  floor. She  agreed                                                                    
with Senator  MacKinnon that it  was an equity  issue. There                                                                    
had been  discussions about the shortage  and recruitment of                                                                    
teachers  and educators.  She thought  that in  rural Alaska                                                                    
broadband  played a  role.  She argued  that  Alaska had  to                                                                    
continue  to deliver  quality education  to all  of Alaska's                                                                    
students. Teaching  and learning through  distance learning,                                                                    
using  video  conferencing  over  broadband,  was  a  viable                                                                    
option  to provide  equity  to students.  She  spoke to  the                                                                    
enhancement  of  many  of the  education  applications  that                                                                    
needed  broadband.  She  noted   a  number  of  applications                                                                    
available to students that would  be enhanced by lifting the                                                                    
megabit floor.  She emphasized  that the  state's investment                                                                    
in  its broadband  infrastructure with  a federal  match was                                                                    
8:1.  The bill  would  expand access  for  students to  take                                                                    
University classes. She urged  members to consider the bill.                                                                    
She  shared that  members had  expressed  concern about  the                                                                    
funding mechanism.                                                                                                              
                                                                                                                                
3:14:31 PM                                                                                                                    
                                                                                                                                
Representative Guttenberg  stated there  were other  ways to                                                                    
get less expensive  internet. He invited her to  come to his                                                                    
office  to  review  those options.  He  continued  that  the                                                                    
charges   for  internet   service  in   rural  Alaska   were                                                                    
exorbitant. Dr.  Parady replied that she  would never engage                                                                    
in a  conversation about telecom  companies or prices  as it                                                                    
was  not her  area  of expertise.  She  relayed that  having                                                                    
tried  to provide  quality  professional development  across                                                                    
89,000 square miles, she might  be the only person in Alaska                                                                    
who  had  a  call  from   a  provider  saying  that  because                                                                    
satellites were colliding  she would not be  able to provide                                                                    
a  district-wide  professional  development class.  She  had                                                                    
lived the  issue. She had  talked to teachers  that reported                                                                    
they could not  upload or download due  to latency problems.                                                                    
She would not consider speaking  to the costs, but she could                                                                    
definitely speak to  the needs. It was a  desperate time for                                                                    
the  districts  to  figure  out  how  to  best  serve  their                                                                    
students going  forward. She  believed the  technology piece                                                                    
in the bill had to be part of the answer.                                                                                       
                                                                                                                                
Representative  Guttenberg noted  that  if someone  compared                                                                    
the charges with  anything else anywhere in  the world, they                                                                    
would be dumbfounded.                                                                                                           
                                                                                                                                
Representative  Ortiz noted  that Ms.  Parady had  mentioned                                                                    
her  concern about  the funding  source  at the  end of  her                                                                    
testimony.  He  agreed  that the  state  needed  to  upgrade                                                                    
broadband,  especially  in  his   district,  as  there  were                                                                    
several rural  areas that would  be positively  impacted. He                                                                    
asked that  if the question  boiled down to having  to leave                                                                    
the  funding source  as is  in order  for the  bill to  move                                                                    
forward,  or not  having the  program, did  she support  the                                                                    
funding source  remaining. Dr. Parady answered  that she saw                                                                    
the megabit increase as a very high priority to education.                                                                      
                                                                                                                                
Representative Pruitt  spoke about  fiscal costs  for items.                                                                    
He  asked  if  Ms.  Parady's  members  would  be  okay  with                                                                    
removing  other things  that were  drawing  from the  Higher                                                                    
Education Fund in order to  keep the fund stable. Ms. Parady                                                                    
responded  that  she  could not  answer  his  question.  She                                                                    
thought  that   there  were  many  worthwhile   supports  to                                                                    
education.  They  had  varying   degrees  of  impact  across                                                                    
different  school districts.  She  was  unclear whether  the                                                                    
answer  to  his  question  would  be  uniform  and  was  not                                                                    
prepared  to answer  it. From  a  fiscal perspective,  using                                                                    
federal  dollars appeared  to be  a wise  investment. School                                                                    
districts were  being called upon  to come up  with creative                                                                    
and  innovative ways  to  serve  students. Connectivity  was                                                                    
necessary to  do so. She did  not see the bill  as a luxury,                                                                    
but rather a necessity.                                                                                                         
                                                                                                                                
Representative   Pruitt  added   that  often   times  people                                                                    
requested  certain   things  that   had  fiscal   costs.  He                                                                    
disagreed that  it was up  to the legislature to  decide how                                                                    
the  state  paid for  things.  He  inherently disagreed  and                                                                    
argued   that  people   had  to   recognize  and   determine                                                                    
priorities.   He  agreed   that   better  connectivity   was                                                                    
necessary  in order  to provide  better  education in  Rural                                                                    
communities. He thought  it was good to  discuss other areas                                                                    
of  savings.  Dr. Parady  thought  it  would cost  about  $2                                                                    
billion  to  wire  the  school   districts.  From  a  fiscal                                                                    
perspective,  incrementally raising  the  megabit floor  and                                                                    
leveraging federal dollars seemed to be a wise investment.                                                                      
                                                                                                                                
3:22:31 PM                                                                                                                    
                                                                                                                                
Representative  Guttenberg clarified  that the  estimate for                                                                    
wiring the entire state was  between $1.2 billion and higher                                                                    
based  on  the  2008 Broadband  Taskforce  calculations.  He                                                                    
compared it  to buying  a house: A  total cash  layout would                                                                    
not  be required.  The  investment would  be  paid off  over                                                                    
time. The  cost for not  doing things for  Alaska's children                                                                    
was higher than making the investment.                                                                                          
                                                                                                                                
Co-Chair  Foster   CLOSED  public   testimony.  He   set  an                                                                    
amendment deadline  for 5:00 PM  Friday, April 20,  2018. He                                                                    
appreciated the sponsor's work on the bill.                                                                                     
                                                                                                                                
SB  102  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
CS FOR SENATE BILL NO. 104(2d FIN)                                                                                            
                                                                                                                                
     "An Act  relating to  the duties  of the  Department of                                                                    
     Education  and  Early   Development;  relating  to  the                                                                    
     duties  of  the  state  Board of  Education  and  Early                                                                    
     Development;   relating   to  school   curricula;   and                                                                    
     relating to  a system for managing  student information                                                                    
     and   records  related   to  individualized   education                                                                    
     programs for children with disabilities."                                                                                  
                                                                                                                                
3:24:13 PM                                                                                                                    
                                                                                                                                
MICHAEL JOHNSON,  COMMISSIONER, DEPARTMENT OF  EDUCATION AND                                                                    
EARLY DEVELOPMENT,  spoke in support  of the bill.  The bill                                                                    
benefited  school  districts.  Some school  districts  would                                                                    
benefit  financially from  the  legislation. The  department                                                                    
was  appreciative because  it benefited  all schools  in the                                                                    
state  by providing  educators additional  information about                                                                    
what was working and being  used at other schools around the                                                                    
state.  It provided  the department  the ability  to collect                                                                    
information and publish it on the department's website.                                                                         
                                                                                                                                
Commissioner  Johnson  continued  that  the  department  was                                                                    
particularly appreciative  of the  bill for  the information                                                                    
it  provided parents  and policy  makers.  It reported  what                                                                    
curriculum was being  used and invited parents to  be a part                                                                    
of  the process  in understanding  what was  being used  for                                                                    
their  students  and  schools. Mostly,  the  department  was                                                                    
appreciative  that   the  bill   did  something   great  for                                                                    
students. He  suggested that by  providing all of  the other                                                                    
people  in   the  system  the  resources   and  information,                                                                    
decisions  would   be  made  to  benefit   students  in  the                                                                    
classroom. The  department was appreciative of  the bill and                                                                    
the conversation that  took place around it.  He was hopeful                                                                    
that  the department  would  be  able to  apply  it for  the                                                                    
benefit of students in the state.                                                                                               
                                                                                                                                
Co-Chair Foster invited the bill sponsor to the table.                                                                          
                                                                                                                                
3:26:49 PM                                                                                                                    
                                                                                                                                
SENATOR  ANNA MCKINNON,  SPONSOR, introduced  the bill  that                                                                    
was  an   attempt  to   improve  educational   outcomes  for                                                                    
students.   It   was   not  mandatory   for   districts   to                                                                    
participate.   However,  it   allowed   the  Department   of                                                                    
Education and  Early Development to  see if they  were ready                                                                    
to move forward in a process.                                                                                                   
                                                                                                                                
Senator  MacKinnon  continued that  the  bill  would make  a                                                                    
pilot  program  available for  up  to  5 schools.  Hopefully                                                                    
those  schools   would  be  able  to   participate  in  each                                                                    
curriculum in the  effort to improve math  and language arts                                                                    
- basic skills that all  students needed to be successful in                                                                    
elementary school, middle school,  college, and life beyond.                                                                    
She  explained  that  the  3-year  pilot  program  would  be                                                                    
constructed  on the  ability to  be able  to go  forward and                                                                    
look at the  change. Through the first year  of the program,                                                                    
DEED would  work with districts  and teachers  proficient in                                                                    
these skills to  look around the world,  inside America, and                                                                    
inside  Alaska to  see if  the state  had best  practices in                                                                    
place   and   whether   students  could   achieve   outcomes                                                                    
consistent  with the  current standards.  She admitted  that                                                                    
the  standards  could  change  and that  the  bill  did  not                                                                    
address  the standards  in place.  The bill  stipulated that                                                                    
whatever curricula  moved forward  should meet  Alaska State                                                                    
standards.                                                                                                                      
                                                                                                                                
Senator  MacKinnon   continued  to  detail  the   bill.  The                                                                    
legislation  would require  school  districts  to put  their                                                                    
curriculum on DEED's  website so that parents  would have an                                                                    
opportunity  to   understand  and  engage  in   a  student's                                                                    
education  and  opportunities  to support  that  student  in                                                                    
individual  schools. She  emphasized  that it  was the  only                                                                    
mandate in the bill.                                                                                                            
                                                                                                                                
Senator  MacKinnon relayed  that the  bill also  updated and                                                                    
would support  schools that wanted to  improve communication                                                                    
for  individual  education  performance plans.  She  offered                                                                    
that she could go into  extensive detail about the paperwork                                                                    
required  to communicate  an individual  education plan.  As                                                                    
she recalled there  was a minimum of 27  pages and sometimes                                                                    
up to  3, 5, or  15 people that  needed to come  together to                                                                    
sign off on all of  the paperwork for an individual student.                                                                    
She would leave it up to her staff to explain further.                                                                          
                                                                                                                                
Senator MacKinnon offered  that the bill created  a new fund                                                                    
called  the "Curriculum  and Best  Practices  Fund." It  was                                                                    
charged with  $30 million. The  money would not  be extended                                                                    
in a  huge part in  year 1. It  was an  up to amount  of $10                                                                    
million in year  1, year 2, and year 3  of the pilot program                                                                    
as the  program went  forward. She indicated  that depending                                                                    
on the schools and their  readiness or willingness to engage                                                                    
in  the incentivized  curricula,  the fund  would offset  or                                                                    
help individual  schools, the number  would be  expended for                                                                    
the remaining 3 years in different segments.                                                                                    
                                                                                                                                
Senator  MacKinnon did  not anticipate  spending the  entire                                                                    
$30  million.  As  she   understood,  the  Anchorage  School                                                                    
District  recently reviewed  some of  its curricula.  It was                                                                    
her  estimation that  they would  not redo  their curricula.                                                                    
She highlighted another  change in the bill which  had to do                                                                    
with length of  time. Legislators had tried to  find ways to                                                                    
deploy  and streamline  processes for  educators. They  were                                                                    
working hard and  doing a good job in many  areas around the                                                                    
state. However,  some students  were struggling.  She argued                                                                    
that curricula  were the foundation  of trying to  provide a                                                                    
stepping stone to create consistency and support from DEED.                                                                     
                                                                                                                                
Senator  MacKinnon  continued   that  Alaska's  constitution                                                                    
guaranteed  local self-determination.  The reason  why there                                                                    
was a  pilot program  was to try  to bring  people together,                                                                    
specifically Alaska's  Board of  Education to agree  on what                                                                    
was best to  achieve something for students  that they could                                                                    
align with  and succeed  with in their  future. There  was a                                                                    
process  outlined in  the bill  where the  department worked                                                                    
with  school  districts  across the  state  in  forming  and                                                                    
finding  the  curricula that  might  be  available and  then                                                                    
incentivizing its use should districts  choose to do so on a                                                                    
voluntary basis.  As she  understood, specifically  in math,                                                                    
Alaska's  largest  districts  were circling  around  similar                                                                    
curricula. Sometimes  the same process was  not available to                                                                    
smaller  schools. She  elaborated that  depending on  school                                                                    
size, a school  might have different levels  of expertise in                                                                    
individual  subjects in  smaller school  districts. Although                                                                    
the curricula review was extended from  6 years to 10 in the                                                                    
bill, the  state school  board would  be required  to review                                                                    
curricula  for  math and  language  arts  every 5  years  to                                                                    
ensure that the  core portion of learning was  looked at all                                                                    
of the time. She was available for questions.                                                                                   
                                                                                                                                
3:32:50 PM                                                                                                                    
                                                                                                                                
BRITTANY  HUTCHINSON,  STAFF,  SENATOR  ANNA  MCKINNON,  was                                                                    
available to present  the sectional analysis, if  it was the                                                                    
will of the committee.                                                                                                          
                                                                                                                                
Co-Chair Foster did not think  the committee needed a review                                                                    
of the sectional  analysis. He reviewed a  list of available                                                                    
testifiers. He asked  the senator if she  wanted to continue                                                                    
or if she wanted to wait.                                                                                                       
                                                                                                                                
Senator MacKinnon  thought that the will  of the legislature                                                                    
was for  the co-chairmen  to meet  and to  try to  solve and                                                                    
find a  path forward on  the budget.  She was happy  to wait                                                                    
for questions  until after the  public hearing.  Ms. Hartman                                                                    
could stay  to answer questions.  She was aware of  the huge                                                                    
fiscal note  associated with the  bill. She  assured members                                                                    
that the  money was saved  rather than spent.  She explained                                                                    
the reason the number was so  high was because of the ADM at                                                                    
$150 per  student. Everyone had the  ability to participate.                                                                    
However, for the  pilot program only a maximum  of 5 schools                                                                    
would be allowed  to participate - 1 rural and  1 urban. She                                                                    
recollected that Anchorage had already done a rewrite.                                                                          
                                                                                                                                
Co-Chair  Foster indicated  the  committee  would bring  the                                                                    
bill up the following day, rather than being in a rush.                                                                         
                                                                                                                                
3:35:38 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:36:10 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Foster would pass the gavel to Vice-Chair Gara.                                                                        
                                                                                                                                
Vice-Chair Gara OPENED public testimony.                                                                                        
                                                                                                                                
3:37:10 PM                                                                                                                    
                                                                                                                                
DR. DEENA BISHOP, ANCHORAGE  SCHOOL DISTRICT, ANCHORAGE (via                                                                    
teleconference),  spoke in  support of  SB 104.  She relayed                                                                    
that  curriculum   was  a  foundational  piece   of  quality                                                                    
instruction.  She understood  education  took resources  and                                                                    
education made a difference. The  bill would provide a means                                                                    
for  all  districts  to access  and  guarantee  them  viable                                                                    
curriculum. State  approved curricula  was a  standard found                                                                    
in many states  allowing for the expertise  and resources to                                                                    
be  shared  by the  largest  and  smallest communities.  She                                                                    
thought  the  bill  was exactly  what  districts  should  be                                                                    
asking  from  the  state  in   support  of  its  schools  in                                                                    
partnership with  DEED. She  Reported that  Anchorage School                                                                    
District supported the bill.                                                                                                    
                                                                                                                                
Representative  Wilson  asked   when  the  Anchorage  school                                                                    
system  last updated  its English  and  math curricula.  Dr.                                                                    
Bishop responded  that the district  had its  first adoption                                                                    
of its K-12 literacy program.  The district had gone through                                                                    
a  process in  the  prior year  to  adopt an  evidence-based                                                                    
reading   curriculum.   The   district  updated   its   math                                                                    
curriculum  5 years  ago. The  district was  not looking  to                                                                    
change  curricula. The  school  district was  using data  to                                                                    
demonstrate the area for which it needed to find growth.                                                                        
                                                                                                                                
Representative Wilson  asked about the process  of reviewing                                                                    
the  district's curriculum.  Dr. Bishop  responded that  the                                                                    
district had  conducted the  process in  small units  due to                                                                    
budget constraints.  The district  had looked  at elementary                                                                    
K-2,   which   had    new   curriculum,   instruction,   and                                                                    
assessments.  In the  following year  the district  would be                                                                    
rolling   out   3-5.   She  elaborated   that   professional                                                                    
development  and preparation  were required  in the  rolling                                                                    
out of new curriculum.                                                                                                          
                                                                                                                                
Vice-Chair  Gara indicated  there were  no other  testifiers                                                                    
online.                                                                                                                         
                                                                                                                                
3:40:49 PM                                                                                                                    
                                                                                                                                
Representative   Ortiz  asked   Dr.  Bishop   about  science                                                                    
curriculum  being reviewed.  He wondered  if things  changed                                                                    
more rapidly than every 10  years. Dr. Bishop explained that                                                                    
the  school  district  used  its  data.  For  instance,  the                                                                    
district's  math  data  was  enough   to  be  reviewed.  The                                                                    
district  had reviewed  its  data and  found  that what  was                                                                    
happening in  its classrooms currently  was not  meeting its                                                                    
goals in some  areas. The district was  choosing to reinvest                                                                    
in  some  areas. In  other  areas,  in a  6-year  continuous                                                                    
cycle,  the  district  felt   confident.  The  district  was                                                                    
focusing its  energy on  where the  need existed.  She hoped                                                                    
that leadership  around the  state and  individual districts                                                                    
would  do the  same.  The legislation  would  allow for  the                                                                    
expertise  to be  statewide so  that  for smaller  districts                                                                    
that did  not have  the means could  engage in  the process.                                                                    
Anchorage  School  District's  science was  addressed  every                                                                    
year. The district was  working through science, technology,                                                                    
engineering,  and mathematics  (STEM). She  elaborated about                                                                    
curriculum  reviews and  looking  at the  impact in  student                                                                    
learning and whether outcomes were  where they were expected                                                                    
to be. If  they were not, the school district  would look at                                                                    
what  was  happening in  the  schools  from day-to-day.  The                                                                    
school  district  wanted  to   ensure  the  success  of  its                                                                    
students when they left the district.                                                                                           
                                                                                                                                
Vice-Chair Gara thanked Dr. Bishop for her testimony.                                                                           
                                                                                                                                
3:44:33 PM                                                                                                                    
                                                                                                                                
Vice-Chair Gara CLOSED public testimony.                                                                                        
                                                                                                                                
Vice-Chair  Gara  reported  that   amendments  were  due  by                                                                    
Friday,  April  20,  2018  at 5:00  p.m.  [The  meeting  was                                                                    
recessed to the call of the chair but never reconvened.]                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
3:45:36 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 3:45 p.m.                                                                                          

Document Name Date/Time Subjects
SB 102 - Higher Education Investment Fund excerpt from Treasury report 1-23-18.pdf HFIN 4/18/2018 9:00:00 AM
SB 102
SB 102 - Higher Education Fund Projection - 6.21% return woSB102.pdf HFIN 4/18/2018 9:00:00 AM
SB 102
SB 102 - Higher Ed Fund SB 102 - 6.21% return wSB102.pdf HFIN 4/18/2018 9:00:00 AM
SB 102
SB 102 Sectional Analysis ver A 04.16.2018.pdf HFIN 4/18/2018 9:00:00 AM
SB 102
SB 102 Sponsor Statement 4.16.18.pdf HFIN 4/18/2018 9:00:00 AM
SB 102
SB 104 Letter of Support ACSA 4.14.18.pdf HFIN 4/18/2018 9:00:00 AM
SB 104
CSSB 104 IEP Explanation SFIN Request 4.14.18.pdf HFIN 4/18/2018 9:00:00 AM
SB 104
CSSB 104 Sectional Analysis 4.16.18.pdf HFIN 4/18/2018 9:00:00 AM
SB 104
SB 104 Letter of Support Kenai Peninsula Borough School District 4.14.18.pdf HFIN 4/18/2018 9:00:00 AM
SB 104
SB 104 Letter of Support MSBSD 4.14.18.pdf HFIN 4/18/2018 9:00:00 AM
SB 104
SB 104 Sponsor Statement.pdf HFIN 4/18/2018 9:00:00 AM
SB 104
SB 216 School Consolidation Presentation-House Finance.pdf HFIN 4/18/2018 9:00:00 AM
SB 216
SB216 CS FIN Summary of Changes All Versions.pdf HFIN 4/18/2018 9:00:00 AM
SB 216
SB 216 Sectional Analysis Ver. T 04.13.18.pdf HFIN 4/18/2018 9:00:00 AM
SB 216
SB 216 Sponsor Statement 03.21.18.pdf HFIN 4/18/2018 9:00:00 AM
SB 216
SB 216 Basic Middle School Consolidation Example 041818.pdf HFIN 4/18/2018 9:00:00 AM
SB 216
SB 216 Basic Elementary School Consolidation Example 041818.pdf HFIN 4/18/2018 9:00:00 AM
SB 216
SB 102 TelAK letter 4.16.18.pdf HFIN 4/18/2018 9:00:00 AM
SB 102
SB 102 DRS Techonologies Letter 4.16.18.pdf HFIN 4/18/2018 9:00:00 AM
SB 102
SB 102 Adak Letter 4.16.18.pdf HFIN 4/18/2018 9:00:00 AM
SB 102
SB 102 Cordova Telephone Cooperative Letter 4.16.18.pdf HFIN 4/18/2018 9:00:00 AM
SB 102
SB 102 Alaska Communications Letter 4.16.18.pdf HFIN 4/18/2018 9:00:00 AM
SB 102
DEED HFSC Budget Overview LAM 1.31.18.pdf HFIN 4/18/2018 9:00:00 AM
SB 102