Legislature(2013 - 2014)BELTZ 105 (TSBldg)

03/17/2014 08:00 AM EDUCATION

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved SB 195 Out of Committee
Moved SJR 23 Out of Committee
Moved CSSSSB 100(EDC) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
**Streamed live on AKL.TV**
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE EDUCATION STANDING COMMITTEE                                                                             
                         March 17, 2014                                                                                         
                           8:00 a.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Gary Stevens, Chair                                                                                                     
Senator Mike Dunleavy, Vice Chair                                                                                               
Senator Bert Stedman                                                                                                            
Senator Charlie Huggins                                                                                                         
Senator Berta Gardner                                                                                                           
MEMBERS ABSENT                                                                                                                
All members present                                                                                                             
COMMITTEE CALENDAR                                                                                                            
SENATE JOINT RESOLUTION NO. 23                                                                                                  
Proposing  an  amendment to  the  Constitution  of the  State  of                                                               
Alaska  relating  to  contracting state  debt  for  postsecondary                                                               
student loans.                                                                                                                  
     - MOVED SJR 23 OUT OF COMMITTEE                                                                                            
SENATE BILL NO. 195                                                                                                             
"An Act  relating to the  membership and authority of  the Alaska                                                               
Commission  on Postsecondary  Education; relating  to the  Alaska                                                               
Student Loan  Corporation; relating  to teacher  education loans;                                                               
relating  to  interest  on  and  consolidation  of  postsecondary                                                               
education  loans;  relating   to  Alaska  supplemental  education                                                               
loans; relating to AlaskAdvantage  grants; relating to the Alaska                                                               
family   education  loan   program;  relating   to  postsecondary                                                               
educational institutions; and providing for an effective date."                                                                 
     - MOVED SB 195 OUT OF COMMITTEE                                                                                            
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 100                                                                                      
"An Act  establishing a grant  program to be administered  by the                                                               
Association of Alaska  School Boards for the  purchase of student                                                               
equipment and  technology services; establishing a  grant program                                                               
for    innovative   approaches    to   learning;    relating   to                                                               
correspondence  study   programs  and  student   allotments;  and                                                               
providing for an effective date."                                                                                               
     - MOVED CSSSSB 100(EDC) OUT OF COMMITTEE                                                                                   
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB 195                                                                                                                  
SHORT TITLE: POSTSECONDARY EDUCATION LOANS/GRANTS                                                                               
SPONSOR(s): SENATOR(s) FAIRCLOUGH                                                                                               
02/24/14       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/24/14       (S)       EDC, FIN                                                                                               
03/10/14       (S)       EDC AT 8:00 AM BELTZ 105 (TSBldg)                                                                      
03/10/14       (S)       Heard & Held                                                                                           
03/10/14       (S)       MINUTE(EDC)                                                                                            
03/17/14       (S)       EDC AT 8:00 AM BELTZ 105 (TSBldg)                                                                      
BILL: SJR 23                                                                                                                  
SHORT TITLE: CONST. AM: STUDENT LOAN DEBT                                                                                       
SPONSOR(s): SENATOR(s) FAIRCLOUGH                                                                                               
02/14/14       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/14/14       (S)       STA, EDC                                                                                               
03/06/14       (S)       STA AT 9:00 AM BUTROVICH 205                                                                           
03/06/14       (S)       Moved SJR 23 Out of Committee                                                                          
03/06/14       (S)       MINUTE(STA)                                                                                            
03/07/14       (S)       STA RPT  2DP 2NR                                                                                       
03/07/14       (S)       DP: COGHILL, GIESSEL                                                                                   
03/07/14       (S)       NR: DYSON, WIELECHOWSKI                                                                                
03/07/14       (S)       FIN REFERRAL ADDED AFTER EDC                                                                           
03/10/14       (S)       EDC AT 8:00 AM BELTZ 105 (TSBldg)                                                                      
03/10/14       (S)       Heard & Held                                                                                           
03/10/14       (S)       MINUTE(EDC)                                                                                            
03/17/14       (S)       EDC AT 8:00 AM BELTZ 105 (TSBldg)                                                                      
BILL: SB 100                                                                                                                  
SHORT TITLE: EDUCATION GRANTS; CORRS STUDY; ALLOTMENTS                                                                          
SPONSOR(s): SENATOR(s) DUNLEAVY                                                                                                 
04/06/13       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/06/13       (S)       EDC                                                                                                    
04/10/13       (S)       EDC AT 8:00 AM BELTZ 105 (TSBldg)                                                                      
04/10/13       (S)       Heard & Held                                                                                           
04/10/13       (S)       MINUTE(EDC)                                                                                            
02/07/14       (S)       SPONSOR SUBSTITUTE INTRODUCED-REFERRALS                                                                
02/07/14       (S)       EDC, FIN                                                                                               
03/03/14       (S)       EDC AT 8:00 AM BELTZ 105 (TSBldg)                                                                      
03/03/14       (S)       Heard & Held                                                                                           
03/03/14       (S)       MINUTE(EDC)                                                                                            
03/14/14       (S)       EDC AT 8:00 AM BELTZ 105 (TSBldg)                                                                      
03/14/14       (S)       <Bill Hearing Postponed to 3:00 pm>                                                                    
03/14/14       (S)       EDC AT 3:00 PM BELTZ 105 (TSBldg)                                                                      
03/14/14       (S)       Heard & Held                                                                                           
03/14/14       (S)       MINUTE(EDC)                                                                                            
03/17/14       (S)       EDC AT 8:00 AM BELTZ 105 (TSBldg)                                                                      
WITNESS REGISTER                                                                                                              
SENATOR ANNA FAIRCLOUGH                                                                                                         
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Sponsor of SJR 23 and SB 195.                                                                             
DIANE BARRANS, Executive Director                                                                                               
Postsecondary Education Commission                                                                                              
Department of Education and Early Development (DEED)                                                                            
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered questions regarding SB 195.                                                                      
SHEILA PETERSON, Staff                                                                                                          
Senator Mike Dunleavy                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Reviewed the changes in version G of SB 100                                                               
on behalf of the sponsor.                                                                                                       
SUSAN MCCAULEY, Ph.D., Director                                                                                                 
Teaching and Learning Support                                                                                                   
Department of Education and Early Development (DEED)                                                                            
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered questions related to SB 195.                                                                     
PETE LEWIS, Superintendent                                                                                                      
Fairbanks North Star Borough School District                                                                                    
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of SB 100.                                                                           
ACTION NARRATIVE                                                                                                              
8:00:47 AM                                                                                                                    
CHAIR  GARY   STEVENS  called   the  Senate   Education  Standing                                                             
Committee meeting  to order at 8:00  a.m. Present at the  call to                                                               
order  were Senators  Stedman, Dunleavy,  and  Chair Stevens.  He                                                               
noted three bills on the docket: SB 195, SJR 23, and SB 100.                                                                    
              SJR 23-CONST. AM: STUDENT LOAN DEBT                                                                           
8:01:33 AM                                                                                                                    
CHAIR STEVENS announced the consideration of SJR 23, version U.                                                                 
SENATOR  ANNA  FAIRCLOUGH,   Alaska  State  Legislature,  Juneau,                                                               
Alaska, sponsor  of SJR 23,  explained that the bill  proposes to                                                               
ask  voters if  the  state can  refinance post-secondary  student                                                               
loans.  It would  allow  the  state to  use  its  good credit  to                                                               
provide students  in the  past and future  with a  lower interest                                                               
CHAIR STEVENS opened and closed public testimony.                                                                               
8:03:02 AM                                                                                                                    
SENATOR STEDMAN  asked why a  constitutional amendment  is needed                                                               
instead of going through an appropriations process.                                                                             
CHAIR STEVENS announced the arrival of Senator Huggins.                                                                         
SENATOR  FAIRCLOUGH  explained  that Alaska's  constitution  only                                                               
allows bonding, with the full faith  and credit of the state, for                                                               
housing loans for veterans and for capital improvement projects.                                                                
SENATOR  STEDMAN   restated  the  question  and   asked  why  the                                                               
treasury's ability  to restructure  notes is  not used,  or other                                                               
loan programs, instead of changing the constitution.                                                                            
SENATOR FAIRCLOUGH  said it certainly  is up  to the will  of the                                                               
body  if they  want  to use  general fund  dollars,  but that  is                                                               
something  that has  not been  done  in the  past. She  explained                                                               
that, currently, the  loans are issued against  the revenues that                                                               
the students will pay, a higher percentage than the bond market.                                                                
SENATOR STEDMAN asked  if there is no other  mechanism to achieve                                                               
the goal, short of changing the constitution.                                                                                   
SENATOR  FAIRCLOUGH said  the legislature  could  fully fund  the                                                               
program if  they opted to.  There would  be an issue  of fairness                                                               
due to the number of loans still due.                                                                                           
She related that before this could  happen, it would go to a vote                                                               
of the  people in the  2014 election. Next, the  commission would                                                               
have  to  seek approval  by  the  legislature.  In 2016,  at  the                                                               
earliest,  voters  would  have   to  approve  the  constitutional                                                               
amendment.  The earliest  a student  could  receive the  benefits                                                               
would be in 2017.                                                                                                               
8:06:25 AM                                                                                                                    
CHAIR  STEVENS said  the  actual  vote would  take  place in  the                                                               
general election of 2014.                                                                                                       
SENATOR FAIRCLOUGH said yes.                                                                                                    
SENATOR  DUNLEAVY moved  to  report SJR  23  from committee  with                                                               
individual  recommendations  and  attached  fiscal  notes.  There                                                               
being  no  objection,  SJR  23   was  reported  from  the  Senate                                                               
Education Standing Committee.                                                                                                   
8:07:05 AM                                                                                                                    
At ease                                                                                                                         
          SB 195-POSTSECONDARY EDUCATION LOANS/GRANTS                                                                       
8:08:23 AM                                                                                                                    
CHAIR STEVENS announced the consideration of SB 195.                                                                            
SENATOR  ANNA  FAIRCLOUGH,   Alaska  State  Legislature,  Juneau,                                                               
Alaska,  reviewed SB  195. She  said bill  makes substantive  and                                                               
housekeeping changes  to the Alaska State  Statutes regarding the                                                               
Alaska  Commission on  Post-secondary  Education  and the  Alaska                                                               
Student  Loan Corporation.  These  changes  include allowing  the                                                               
commission to set favorable terms  for borrowers and increase the                                                               
total loan  limit a  student may  borrow. Currently,  loan limits                                                               
have  not been  changed in  almost 20  years. The  cost of  post-                                                               
secondary  education  has  almost   doubled  since  1995.  Alaska                                                               
students and  their financial aid officers  report that borrowers                                                               
with a  high unmet cost  of attendance are  increasingly choosing                                                               
loans  with  higher loan  limits,  even  those that  have  higher                                                               
interest rates.                                                                                                                 
She explained that  this bill defines what an  on-time student is                                                               
so that they  can reach and accomplish their goals.  It enables a                                                               
student  to  enter the  workforce  earlier  and enter  repayments                                                               
sooner so  that they  have less  debt to  carry. There  is strong                                                               
evidence that shows the correlation  between the intensity of the                                                               
enrollment of a student and their completion rates.                                                                             
CHAIR STEVENS asked who the bill  would affect and how many years                                                               
the loan can be used.                                                                                                           
SENATOR FAIRCLOUGH deferred to Diane  Barrans to answer. She said                                                               
on page 13, lines 12-14, it  takes the loan limit from $42,500 to                                                               
$56,000  and  from  $60,000 to  $87,000  for  undergraduates  and                                                               
graduate   students   respectively.    The   bill   also   allows                                                               
consolidation of loans.                                                                                                         
CHAIR STEVENS  asked how many  years the  loan is available  to a                                                               
DIANE  BARRANS,   Executive  Director,   Postsecondary  Education                                                               
Commission,  Department   of  Education  and   Early  Development                                                               
(DEED), Juneau, Alaska, answered  questions regarding SB 195. She                                                               
explained that  there is  not a  limit on the  number of  years a                                                               
student can access the loan; there is a total dollar amount.                                                                    
CHAIR STEVENS inquired if part-time students can receive a loan.                                                                
MS. BARRANS said they can be  part-time students and they have to                                                               
be matriculated into a degree or certificated program.                                                                          
CHAIR STEVENS noted the presence of Senator Gardner.                                                                            
SENATOR  GARDNER   understood  that  currently  a   student  with                                                               
multiple loans is  required to pay the oldest one  first, not the                                                               
one with the highest interest  rate. She asked about the interest                                                               
rate and  impact of  consolidated loans, as  provided for  in the                                                               
8:12:53 AM                                                                                                                    
MS.  BARRANS clarified  that Senator  Gardner's understanding  is                                                               
not correct. As  long as the student's other loans  are paid to a                                                               
current status, they can prepay  any loan they select. Paying the                                                               
highest rate  loan first  would be to  their benefit.  She stated                                                               
that consolidation is  done at the prevailing rate,  which is 7.3                                                               
percent  now. Currently,  the only  education loans  eligible for                                                               
consolidation  are Alaska  state loans;  SB 195  would allow  for                                                               
other loans.                                                                                                                    
CHAIR STEVENS asked if the provisions  in the bill would apply to                                                               
parent loans.                                                                                                                   
MS. BARRANS said they would.                                                                                                    
SENATOR STEDMAN  asked for  additional information  regarding the                                                               
7.3  percent  interest  rate  and why  there  is  no  forgiveness                                                               
8:14:31 AM                                                                                                                    
MS.  BARRANS replied,  with  respect to  the  interest rate,  the                                                               
market  environment  post-2008  has  substantially  changed.  The                                                               
rates have  risen substantially.  Currently, the loan  volume has                                                               
dropped  to the  extent that  the corporation  can use  available                                                               
cash  to fund  loans.  The previous  legislation,  SJR 23,  would                                                               
allow the  corporation to leverage  the AAA rating of  the state,                                                               
even though  the bonds would be  paid down with revenue  from the                                                               
She addressed the forgiveness program  question. She related that                                                               
the loan forgiveness  program was a very  generous program funded                                                               
through 1987.  As a  result of the  fluctuation of  oil revenues,                                                               
that program  was eliminated. The corporation  was established in                                                               
1987  for the  purpose of  allowing  student loans  to become  an                                                               
enterprise operation of the state.  She added that the only thing                                                               
keeping the  corporation from  instituting a  forgiveness program                                                               
would be making funding available to pay the costs.                                                                             
SENATOR STEDMAN asked if the borrower  would be better off with a                                                               
forgiveness program or with a 7.3 percent interest rate.                                                                        
MS. BARRANS  replied that very  few students enjoyed  any benefit                                                               
from the  forgiveness program.  When looking  at the  almost $500                                                               
million of loans that the state  funded, fewer than 30 percent of                                                               
the  students  enjoyed any  benefit.  Only  21 percent  of  those                                                               
received  the full  50 percent  forgiveness and  the cost  to the                                                               
loan program was  larger in loan write-offs  from individuals who                                                               
failed  to repay  the  debt  than the  cost  of loan  forgiveness                                                               
itself. About $74  million in loans were forgiven.  She noted she                                                               
was one of  those who benefitted from loan  forgiveness. She said                                                               
it  would depend  on  which of  those students  you  were, as  to                                                               
whether  or  not  it  would  be  more  beneficial  to  have  loan                                                               
forgiveness. The mind set of  borrowers during that time was that                                                               
it wasn't really a loan.                                                                                                        
CHAIR  STEVENS  said  he  also   received  loan  forgiveness.  He                                                               
remarked that if  people spend five years working  in Alaska they                                                               
will probably  stay. Legislators  have always  liked the  idea of                                                               
loan forgiveness.                                                                                                               
8:19:05 AM                                                                                                                    
SENATOR STEDMAN  said he also  had a forgiveness loan.  He opined                                                               
that a person  who signed a note  in the 80's was  under the same                                                               
payback obligation as  someone today. He said he has  a hard time                                                               
drawing a conclusion  that there was a different  attitude in the                                                               
past.  He  suggested  that  underwriting  requirements  could  be                                                               
rectified.  He  said the  state  has  some tools  available  that                                                               
should be  considered for the future.  He noted that a  7 percent                                                               
interest rate  is a whole  lot different than  50/50 forgiveness.                                                               
As far  as a policy call,  the state has tools  available to use.                                                               
The resources in the treasury are  owned by everyone, and he said                                                               
he is  more inclined  to come  up with  a mechanism  to encourage                                                               
students to return to the state.                                                                                                
8:21:54 AM                                                                                                                    
MS. BARRANS  said it is  up to the  will of the  legislature. She                                                               
encouraged loan  repayment programs, which are  programs that are                                                               
not entitlements but would pre-fund  an account and could be used                                                               
to pay  down loans  for individuals  who complete  credentials in                                                               
areas that have  economic interest to the  state. The legislature                                                               
created such a program two years  ago that focused on health care                                                               
professions; however,  the budget for  that program has  been cut                                                               
in half.  Individuals were  recruited into  health care  jobs and                                                               
are now  at risk  for not receiving  that benefit.  She concluded                                                               
that SB 195  is more sustainable without  relying on year-to-year                                                               
8:23:35 AM                                                                                                                    
CHAIR STEVENS said more work is needed on this issue.                                                                           
SENATOR FAIRCLOUGH  hoped the committee  would move the  bill out                                                               
of committee. She  said she and Ms. Barrans have  been working on                                                               
SB  195  for  over  a  year  in  order  to  provide  a  tool  the                                                               
legislature can use at its discretion to help assist students.                                                                  
CHAIR STEVENS asked Ms. Barrans if she had any further comments.                                                                
MS.  BARRANS  requested  support  of the  bill  and  thanked  the                                                               
sponsor. She summarized  that the key provisions in  the bill are                                                               
the ones that incent on-time  enrollment and expedite the time it                                                               
takes to  get a degree. A  large portion of students  attend part                                                               
time and complete their credentials in very low numbers.                                                                        
SENATOR STEDMAN if  there was an increase in the  number of staff                                                               
needed to manage today's student loan programs.                                                                                 
MS. BARRANS  explained that the  current loan portfolio  is about                                                               
$500 million  and the staffing  has not substantially  changed in                                                               
numbers. The last significant increase  in staff was in the early                                                               
90's.  Some staff  have been  reallocated  through creating  more                                                               
efficient loan  serving systems.  Staff now provide  outreach and                                                               
early awareness  out of the  Anchorage office, and the  number of                                                               
staff on loan servicing has been reduced.                                                                                       
CHAIR STEVENS asked how much the loan portfolio was in the past.                                                                
MS. BARRANS explained  that when the corporation  was making both                                                               
federally guaranteed  and state loans,  it was issuing  in excess                                                               
of $80  million a  year in  loans. The program  was ended  by the                                                               
current administration  in Washington, D.C. in  2008. Since then,                                                               
there  has  been a  rapid  decline  in  the  loan volume  due  to                                                               
Congress's seeking  to protect consumers against  lenders who are                                                               
not  federal  education  loan   lenders.  That  created  barriers                                                               
because  they failed  to make  a distinction  between state-based                                                               
programs and other lenders. The  state can no longer partner with                                                               
schools to recommend  a state loan. The other factor  is that the                                                               
state previously  promoted the federally guaranteed  loan. At the                                                               
same time,  in order to issue  bonds the state had  to change the                                                               
underwriting  criteria so  that students  now have  to be  credit                                                               
worthy or have a credit-worthy  cosigner. She concluded that this                                                               
has  resulted  in  a  decline   rate  for  about  40  percent  of                                                               
8:29:37 AM                                                                                                                    
SENATOR  HUGGINS asked  if  any schools  are  precluded, such  as                                                               
religious schools.                                                                                                              
MS.  BARRANS  said   the  requirement  is  that   the  school  be                                                               
accredited or  approved by the  commission to participate  in the                                                               
loan program.                                                                                                                   
SENATOR  GARDNER  asked if  the  average  18-year-old requires  a                                                               
MS. BARRANS said yes.                                                                                                           
CHAIR STEVENS opened and closed public testimony.                                                                               
SENATOR  DUNLEAVY moved  to  report SB  195  from committee  with                                                               
individual recommendations and attached  fiscal note. There being                                                               
no objection, the motion carried.                                                                                               
8:31:39 AM                                                                                                                    
At ease                                                                                                                         
        SB 100-EDUCATION GRANTS; CORRS STUDY; ALLOTMENTS                                                                    
8:33:22 AM                                                                                                                    
CHAIR STEVENS announced the consideration of SB 100, version G.                                                                 
SHEILA  PETERSON,  Staff,  Senator Mike  Dunleavy,  Alaska  State                                                               
Legislature, Juneau,  Alaska, reviewed  the changes in  version G                                                               
of SB  100 on behalf of  the sponsor. She related  that version G                                                               
ensures that the individual learning  plan (ILP) would be created                                                               
with the assistance and approval  of a certified teacher, parent,                                                               
and child. Added in version  G are the following provisions: that                                                               
the progress  of the  student would be  monitored by  the teacher                                                               
and  the vendors  would be  non-sectarian -  public, private,  or                                                               
religious organizations; textbook selection  would have to follow                                                               
the same  criteria that public  schools use; once a  student left                                                               
the  correspondence  program,  any  unexpended  allotment  monies                                                               
would return to the district; and  a family member who is helping                                                               
with instruction could not be reimbursed by the allotment fund.                                                                 
8:35:45 AM                                                                                                                    
CHAIR STEVENS asked for the definition of "family members."                                                                     
MS.  PETERSON  said family  members  are  "the student's  spouse,                                                               
guardian,    parent,    step-parent,    sibling,    step-sibling,                                                               
grandparent, step-grandparent, child, uncle, or aunt."                                                                          
CHAIR  STEVENS  asked  if there  are  any  constitutional  issues                                                               
regarding  SB  100.  He  asked   about  allowing  vendors  to  be                                                               
religious institutions.                                                                                                         
SENATOR DUNLEAVY  said many home schools  employ vendors approved                                                               
by the  school district  for the purpose  of supporting  a public                                                               
ILP. Vendors can be private  individuals, such as those that have                                                               
business licenses or are tutors.  The important point is that the                                                               
coursework is being purchased for the support of a public ILP.                                                                  
He  maintained  that  constitutionality is  difficult  to  define                                                               
because one  must almost have  a court action to  determine that.                                                               
He  provided an  example in  the  bill previously  passed by  the                                                               
committee. He understood that if the  purchasing of a course or a                                                               
service supports  a public IEP,  it should  not be a  problem. He                                                               
opined that people can  sue for any reason at any  time to test a                                                               
8:38:55 AM                                                                                                                    
SENATOR GARDNER agreed  that one never knows  until someone takes                                                               
it  to  court.  She  stated,  however,  that  her  office  has  a                                                               
constitutional  opinion   that  SB  100  does   not  violate  the                                                               
SENATOR STEDMAN asked who has that opinion.                                                                                     
SENATOR GARDNER said her office.                                                                                                
CHAIR  STEVENS  asked  the  Department  of  Education  and  Early                                                               
Development (DEED) to respond.                                                                                                  
8:40:06 AM                                                                                                                    
SUSAN MCCAULEY,  Ph.D., Director, Teaching and  Learning Support,                                                               
Department  of Education  and Early  Development (DEED),  Juneau,                                                               
Alaska,  answered questions  related  to SB  195.  She said  that                                                               
quite a few of the provisions  in SB 100 mirror elements that are                                                               
currently  in regulation  regarding  correspondence study  school                                                               
programs.  The   additions  in  version  G   track  closely  with                                                               
regulations,  particularly on  page 4,  line 24,  with regard  to                                                               
textbooks,  services, and  other curriculum  materials. She  said                                                               
the   changes   reflect   on-going  conversations   between   the                                                               
department and the sponsor.                                                                                                     
SENATOR  GARDNER   read  on  page   4,  line  10,   section  (b),                                                               
"Notwithstanding  another provision  of law,  the department  may                                                               
not impose  additional requirements, other than  the requirements                                                               
specified under (a) of this section  and under AS 14.03.320, on a                                                               
student who  is proficient or  advanced on  statewide assessments                                                               
required  under AS  14.03.123(f)."  She asked  whether there  are                                                               
additional requirements that might be imposed.                                                                                  
DR.  MCCAULEY explained  that currently  in regulation  there are                                                               
some restrictions regarding  the use of allotment  funds, such as                                                               
for gym  membership and family travel.  In previous conversations                                                               
there were questions whether or  not the language just referenced                                                               
would restrict  the department from monitoring  whether a student                                                               
used  an allotment  to  pay  for services  provided  by a  family                                                               
member. That language  has now been added to the  bill. Those are                                                               
two  examples   that  would   fall  under   "imposing  additional                                                               
requirements" and would be at odds when a student is proficient.                                                                
SENATOR GARDNER understood  that a student enrolled  in a program                                                               
under this bill  might be able to use allotment  funds for travel                                                               
and for a gym membership.                                                                                                       
DR.  MCCAULEY  said  yes.  She understood  that  those  would  be                                                               
permitted and  are not  restricted and would  fall under  a broad                                                               
category of "imposing additional  requirements" when a student is                                                               
8:44:00 AM                                                                                                                    
SENATOR GARDNER said yet services  and materials would have to be                                                               
a part of the ILP and from an approved vendor.                                                                                  
DR. MCCAULEY said  correct. There is language  that says services                                                               
must be  for an  instructional purpose and  connected to  an ILP.                                                               
There are  still safeguards  that ensure  allotment funds  are to                                                               
support instruction and have an approval process.                                                                               
CHAIR STEVENS asked where that language is found in the bill.                                                                   
DR.  MCCAULEY said  it is  on page  4, line  15, of  the original                                                               
SENATOR DUNLEAVY  opined that the  bill has more  safeguards than                                                               
current K - 12 schools have. It focuses on the ILP and outcomes.                                                                
8:46:24 AM                                                                                                                    
CHAIR  STEVENS   asked  where   it  says,   "must  be   used  for                                                               
instructional purposes."                                                                                                        
SENATOR DUNLEAVY replied that it is on page 4, lines 17 and 30.                                                                 
SENATOR GARDNER said on page 4, lines 14 and on.                                                                                
CHAIR STEVENS maintained that he  sees the wording "instructional                                                               
expenses", not "instructional purposes."                                                                                        
MS. PETERSON pointed to page 4, line  16, and page 4, line 30; it                                                               
must support a public purpose - the education of the child.                                                                     
CHAIR STEVENS opened public testimony.                                                                                          
8:49:30 AM                                                                                                                    
PETE LEWIS,  Superintendent, Fairbanks North Star  Borough School                                                               
District, Fairbanks, Alaska,  testified in support of  SB 100. He                                                               
said the 80/20 match, innovative  learning grants, and one-to-one                                                               
funding  will be  beneficial to  school  districts. He  mentioned                                                               
support for correspondence study  program funding. He requested a                                                               
phase-in approach to the 1 percent funding ratio.                                                                               
CHAIR STEVENS closed public testimony.                                                                                          
SENATOR DUNLEAVY moved  to report CSSSSB 100  from committee with                                                               
individual recommendations and attached  fiscal note. There being                                                               
no  objection, CSSSSB  100  (EDC) was  reported  from the  Senate                                                               
Education Standing Committee.                                                                                                   
8:52:11 AM                                                                                                                    
At ease                                                                                                                         
8:53:32 AM                                                                                                                    
There being nothing further to come before the committee, Chair                                                                 
Stevens adjourned the Senate Education Standing Committee at                                                                    
8:53 p.m.                                                                                                                       

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