Legislature(2017 - 2018)BELTZ 105 (TSBldg)

03/23/2017 08:00 AM EDUCATION

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08:02:17 AM Start
08:02:49 AM SB96
08:33:34 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled TELECONFERENCED
= SB 96 EDUCATION:SCHOOLS/TEACHERS/FUNDING
Heard & Held
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE EDUCATION STANDING COMMITTEE                                                                             
                         March 23, 2017                                                                                         
                           8:02 a.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Shelley Hughes, Chair                                                                                                   
Senator Cathy Giessel                                                                                                           
Senator John Coghill                                                                                                            
Senator Tom Begich                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Gary Stevens                                                                                                            
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 96                                                                                                              
"An  Act relating  to education;  relating  to school  districts;                                                               
relating  to  course  credit  for  students;  relating  to  group                                                               
insurance,  self-insurance,  and other  cooperative  arrangements                                                               
between    school    districts    and    businesses,    nonprofit                                                               
organizations, and  government agencies; relating to  funding for                                                               
school districts;  relating to  school operating  funds; relating                                                               
to competency examinations for  teacher certificates; relating to                                                               
the Professional  Teaching Practices Commission; relating  to the                                                               
duties  and  powers of  the  Department  of Education  and  Early                                                               
Development  and   the  commissioner   of  education   and  early                                                               
development;   relating  to   a  virtual   education  consortium;                                                               
relating to  the minimum  wage for bus  drivers; relating  to the                                                               
investment,  appropriation,  and  administration  of  the  public                                                               
school trust fund; and providing for an effective date."                                                                        
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 96                                                                                                                   
SHORT TITLE: EDUCATION: SCHOOLS/TEACHERS/FUNDING                                                                                
SPONSOR(s): EDUCATION                                                                                                           
                                                                                                                                
03/20/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/20/17       (S)       EDC, FIN                                                                                               
03/22/17       (S)       EDC AT 8:00 AM BUTROVICH 205                                                                           
03/22/17       (S)       Heard & Held                                                                                           
03/22/17       (S)       MINUTE(EDC)                                                                                            
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JOSHUA BANKS, Staff                                                                                                             
Senator Shelley Hughes                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented changes made to SB 96.                                                                          
                                                                                                                                
DR. SUSAN MCCAULEY                                                                                                              
Education Policy Coordinator                                                                                                    
Department of Education and Early Development (DEED)                                                                            
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered questions on SB 96.                                                                              
                                                                                                                                
PAMELA LEARY, Director                                                                                                          
Treasury Division                                                                                                               
Department of Revenue                                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered questions on SB 96.                                                                              
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
8:02:17 AM                                                                                                                    
CHAIR  SHELLEY  HUGHES  called   the  Senate  Education  Standing                                                             
Committee meeting  to order at 8:02  a.m. Present at the  call to                                                               
order were  Senators Begich, Giessel, Coghill,  and Chair Hughes.                                                               
Senator Stevens was excused.                                                                                                    
                                                                                                                                
           SB 96-EDUCATION: SCHOOLS/TEACHERS/FUNDING                                                                        
                                                                                                                                
8:02:49 AM                                                                                                                    
CHAIR HUGHES announced the consideration of SB 96. This is the                                                                  
second hearing of the bill. She said the committee will focus on                                                                
the changes in the new CS and on several new issues.                                                                            
                                                                                                                                
8:03:35 AM                                                                                                                    
SENATOR COGHILL moved to adopt the CS for SB 96, labeled 30-                                                                    
LS0452\N, as the working document before the committee.                                                                         
                                                                                                                                
CHAIR HUGHES objected for discussion.                                                                                           
                                                                                                                                
8:04:11 AM                                                                                                                    
JOSHUA  BANKS,  Staff,  Senator   Shelley  Hughes,  Alaska  State                                                               
Legislature, presented changes made to SB  96. He began on page 3                                                               
in Section  5 where two  changes were made. On  lines 9 and  10 a                                                               
requirement  is added  that districts  post the  report on  their                                                               
website  or  on  a  community  website or  in  any  other  easily                                                               
accessible way.                                                                                                                 
                                                                                                                                
8:05:08 AM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
8:07:09 AM                                                                                                                    
CHAIR HUGHES note those available to answer questions.                                                                          
                                                                                                                                
8:07:26 AM                                                                                                                    
MR. BANKS reiterated the changes in Section 5.                                                                                  
                                                                                                                                
CHAIR  HUGHES  asked  him  to   mention  some  easily  accessible                                                               
methods.                                                                                                                        
                                                                                                                                
MR. BANKS said  the report could be posted at  a community center                                                               
or a post office.                                                                                                               
                                                                                                                                
CHAIR HUGHES added on bulletin boards or in a school newsletter.                                                                
                                                                                                                                
MR. BANKS  said two more  requirements are added on  lines 20-24;                                                               
the  district  will  show  the  total  number  of  administrative                                                               
employees compared to  the total number of teachers as  well as a                                                               
ratio of the number of teachers to students.                                                                                    
                                                                                                                                
He moved  to page  6, Section 11,  lines 9 and  10, which  adds a                                                               
provision that  the Average  Daily Membership  (ADM) is  equal to                                                               
the student count in the school  in order to reduce the immediate                                                               
negative  impact of  an unintended  consequence of  schools being                                                               
kicked out  of the  formula. There may  be additional  changes to                                                               
this section.                                                                                                                   
                                                                                                                                
8:10:20 AM                                                                                                                    
MR. BANKS  described an  additional change  to the  definition of                                                               
road, so a trail is not considered a road.                                                                                      
                                                                                                                                
8:10:43 AM                                                                                                                    
SENATOR BEGICH asked,  if two schools at 75  percent capacity are                                                               
combined, whether it would make for one overcrowded school.                                                                     
                                                                                                                                
MR.  BANKS said  they are  looking  into that  as it  is not  the                                                               
bill's intent.                                                                                                                  
                                                                                                                                
CHAIR  HUGHES provided  a likely  example of  four schools  at 75                                                               
percent combining into three schools at 100 percent.                                                                            
                                                                                                                                
8:11:55 AM                                                                                                                    
MR.  BANKS  addressed  a  change  in Section  13,  lines  1-4:  a                                                               
sentence is added so that  regulations adopted under this section                                                               
will  not go  into effect  for at  least a  year after  the State                                                               
School Board adopts the regulations  if the minimum score for the                                                               
Praxis  exam  is  increased.  He  recalled  that  Senator  Begich                                                               
brought  attention   to  the  need  to   grandfather  in  current                                                               
teachers,  however,  the  sponsor believes  that  this  provision                                                               
applies to  the initial certification  of teachers.  He suggested                                                               
that Dr. McCauley address this issue.                                                                                           
                                                                                                                                
CHAIR HUGHES asked Dr. McCauley to respond.                                                                                     
                                                                                                                                
8:13:17 AM                                                                                                                    
DR. SUSAN  MCCAULEY, Education Policy Coordinator,  Department of                                                               
Education and Early Development  (DEED), answered questions on SB
96.  She   believed  that  the   provision  applies   to  initial                                                               
certification,  but does  not preclude  clarifying in  regulation                                                               
that  it applies  to initial  certification. She  said she  would                                                               
double check.                                                                                                                   
                                                                                                                                
8:14:20 AM                                                                                                                    
MR. BANKS turned to page 9,  the section on the virtual education                                                               
consortium. In (f)  the change states that  school districts that                                                               
participate in the  consortium will pay a fee  to cover operating                                                               
costs.                                                                                                                          
                                                                                                                                
SENATOR COGHILL  noted that  there are  costs associated  by both                                                               
the provider and  the receiver of virtual education.  He asked if                                                               
that  is  factored  in  and  if  there  is  a  fee  to  join  the                                                               
consortium.                                                                                                                     
                                                                                                                                
8:15:48 AM                                                                                                                    
MR. BANKS  replied that in  (e), there is  a set fee  for virtual                                                               
classes and the district with  students taking a course would pay                                                               
a  portion of  the  base  student allocation  (BSA)  to the  host                                                               
district.                                                                                                                       
                                                                                                                                
8:17:06 AM                                                                                                                    
SENATOR BEGICH noted on page 9, (f),  there is a fee to belong to                                                               
the consortium.                                                                                                                 
                                                                                                                                
CHAIR  HUGHES  clarified  Senator   Coghill's  concern  that  the                                                               
district  offering  the  courses  has higher  expenses  than  the                                                               
district taking the courses. She  said a student fee would offset                                                               
some of those costs.                                                                                                            
                                                                                                                                
SENATOR COGHILL agreed that both fees have to be considered.                                                                    
                                                                                                                                
SENATOR GIESSEL  noted on page 9,  lines 1-6, there is  a formula                                                               
for  tuition  for the  course  that  a  host school  district  is                                                               
offering. She asked if that is correct.                                                                                         
                                                                                                                                
CHAIR HUGHES said yes.                                                                                                          
                                                                                                                                
8:18:51 AM                                                                                                                    
MR. BANKS provided an example of  a student in Tok taking classes                                                               
from the Anchorage  School District. If a high  school student is                                                               
taking one class, 1/7 of the BSA  for that student will go to the                                                               
Anchorage School District. That is the set fee.                                                                                 
                                                                                                                                
SENATOR GIESSEL  added that a  student taking four  classes would                                                               
equal 4/7 BSA.                                                                                                                  
                                                                                                                                
8:19:50 AM                                                                                                                    
MR.  BANKS said  there is  an  option in  the bill  for the  host                                                               
school to choose not to accept that fee or to reduce it.                                                                        
                                                                                                                                
SENATOR BEGICH  suggested language "a  district may set a  fee at                                                               
or below."                                                                                                                      
                                                                                                                                
8:20:33 AM                                                                                                                    
MR. BANKS turned  to the next change in the  CS found in Sections                                                               
20 and 21, new sections related  to the public school trust fund.                                                               
The  sponsor decided  not to  repeal Section  20 so  that it  was                                                               
clear  what the  fund  would go  towards.  There are  forthcoming                                                               
technical changes  from legislative legal  and a need  to clarify                                                               
that  administrative costs  would be  allowable. Section  21 says                                                               
the legislature  may not  appropriate more  than 4.75  percent of                                                               
the three-year market  value of the fund. He  said another change                                                               
is needed because  if the fund has  a net loss it  would mean the                                                               
legislature  could not  appropriate anything.  He noted  that Ms.                                                               
Leary could address that.                                                                                                       
                                                                                                                                
8:22:25 AM                                                                                                                    
CHAIR HUGHES asked Ms. Leary to explain the proposed change.                                                                    
                                                                                                                                
8:22:57 AM                                                                                                                    
PAMELA   LEARY,  Director,   Treasury  Division,   Department  of                                                               
Revenue,  answered questions  on SB  96. She  explained that  the                                                               
language,  as written,  in a  year of  potential loss  would mean                                                               
that there  is no money  coming out  of public schools  and going                                                               
into the fund.                                                                                                                  
                                                                                                                                
CHAIR HUGHES asked, with a  4.75 percent three-year average draw,                                                               
whether the  principal of the  fund would be  drawn in a  year of                                                               
loss, which is against the state constitution.                                                                                  
                                                                                                                                
MS. LEARY explained that the 4.75  percent is on the total market                                                               
value. If  there was a  year of loss,  it would be  combined with                                                               
the two prior  years. There could be language to  limit it to the                                                               
amount of the principle.                                                                                                        
                                                                                                                                
8:24:33 AM                                                                                                                    
CHAIR HUGHES suggested putting protection on the principle.                                                                     
                                                                                                                                
SENATOR BEGICH said  if there is a loss now  and the fund doesn't                                                               
make money,  no expenditure  comes from  the public  school trust                                                               
fund.                                                                                                                           
                                                                                                                                
MS. LEARY  said that  is not  necessarily correct.  She explained                                                               
that only  realized income -  dividends and interest -  get moved                                                               
into the  income fund. The amount  that comes out to  pay towards                                                               
education comes from the income  fund. The losses would not carry                                                               
over.                                                                                                                           
                                                                                                                                
SENATOR  BEGICH requested  a hypothetical  lookback  for ease  of                                                               
understanding.                                                                                                                  
                                                                                                                                
CHAIR HUGHES asked Ms. Leary if she could prepare it.                                                                           
                                                                                                                                
MS. LEARY agreed to do so.                                                                                                      
                                                                                                                                
CHAIR HUGHES  asked how much is  in the fund, currently,  and how                                                               
much would  be drawn  this year,  as opposed  to if  the proposed                                                               
language were to go into effect.                                                                                                
                                                                                                                                
8:26:21 AM                                                                                                                    
MS.  LEARY said  she has  prepared a  preliminary fiscal  note of                                                               
approximately $27.4 million for 2016,  2015, and 2014 - the three                                                               
year average market value.                                                                                                      
                                                                                                                                
CHAIR HUGHES  asked what the  amount was that was  actually drawn                                                               
without the calculation.                                                                                                        
                                                                                                                                
MS. LEARY said for 2016 the appropriation was $13 million.                                                                      
                                                                                                                                
8:27:48 AM                                                                                                                    
SENATOR  BEGICH noted  it  would be  doubled  under the  proposed                                                               
calculation.                                                                                                                    
                                                                                                                                
8:28:24 AM                                                                                                                    
MR. BANKS  turned to Section 24,  on page 14, where  two repealer                                                               
sections  were combined  into  one. The  section  related to  the                                                               
public school  trust fund  is no longer  repealed. Section  24 is                                                               
now the repealer section.                                                                                                       
                                                                                                                                
The first section repeals AS  14.20.470(a)(7), which would repeal                                                               
the ability  for the  Professional Teaching  Practices Commission                                                               
(PTPC)   to   employ   an   executive   secretary   to   do   the                                                               
investigations.  It   would  allow  the  PTPC   to  maintain  its                                                               
integrity and independence.                                                                                                     
                                                                                                                                
SENATOR GIESSEL clarified that they would remove the repeal.                                                                    
                                                                                                                                
MR. BANKS said yes.                                                                                                             
                                                                                                                                
SENATOR GIESSEL said she supports that.                                                                                         
                                                                                                                                
MR.  BANKS discussed  the  final change  to  version N,  removing                                                               
former  Sections 26  and  27  due to  the  fact  that they  don't                                                               
foresee a lawsuit relating to  the public school trust fund. They                                                               
have  requested  that  the  Department of  Law  review  this  and                                                               
analyze the entire  bill for legal issues due  to major education                                                               
court cases.                                                                                                                    
                                                                                                                                
8:31:21 AM                                                                                                                    
SENATOR  BEGICH complimented  Mr. Banks  for getting  the changes                                                               
done so quickly.                                                                                                                
                                                                                                                                
CHAIR HUGHES  removed her  objection and  version N  was adopted.                                                               
She held SB 96 in committee.                                                                                                    
                                                                                                                                
8:33:34 AM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Chair Hughes  adjourned the  Senate Education  Standing Committee                                                               
at 8:33 a.m.                                                                                                                    

Document Name Date/Time Subjects
SB 96 - Draft CS Ver. N.pdf SEDC 3/23/2017 8:00:00 AM
SB 96