Legislature(2009 - 2010)BELTZ 211
03/25/2009 08:00 AM Senate EDUCATION
| Audio | Topic |
|---|---|
| Start | |
| SB134 | |
| SB105 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 105 | TELECONFERENCED | |
| = | SB 134 | ||
ALASKA STATE LEGISLATURE
SENATE EDUCATION STANDING COMMITTEE
March 25, 2009
8:04 a.m.
MEMBERS PRESENT
Senator Bettye Davis, Vice Chair
Senator Charlie Huggins
Senator Donald Olson
Senator Gary Stevens
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 134
"An Act adopting and relating to the Uniform Prudent Management
of Institutional Funds Act; relating to the investment of money
for charitable purposes by institutions, including governmental
institutions; and relating to the University of Alaska."
MOVED CSSB 134(EDC) OUT OF COMMITTEE
SENATE BILL NO. 105
"An Act relating to continuing the secondary public education of
a homeless student; relating to the purpose of certain laws as
they relate to children; relating to tuition waivers, loans, and
medical assistance for a child placed in out-of-home care by the
state; relating to foster care; relating to children in need of
aid; relating to foster care transition to independent living;
and relating to juvenile programs and institutions."
HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 134
SHORT TITLE: PRUDENT MANAGEMENT OF INSTITUTIONAL FUNDS
SPONSOR(s): SENATOR(s) PASKVAN
03/02/09 (S) READ THE FIRST TIME - REFERRALS
03/02/09 (S) EDC, FIN
03/20/09 (S) EDC AT 8:00 AM BELTZ 211
03/20/09 (S) Heard & Held
03/20/09 (S) MINUTE(EDC)
BILL: SB 105
SHORT TITLE: FOSTER CARE/CINA/EDUCATION OF HOMELESS
SPONSOR(s): SENATOR(s) DAVIS
02/11/09 (S) READ THE FIRST TIME - REFERRALS
02/11/09 (S) EDC, HSS, FIN
03/25/09 (S) EDC AT 8:00 AM BELTZ 211
WITNESS REGISTER
SENATOR PASKVAN
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Sponsor of SB 134.
DANA OWEN, staff to the Education committee
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Commented on SB 134.
JIM LYNCH
University of Alaska Foundation
University of Alaska
POSITION STATEMENT: Supported SB 134.
TOM OBERMEYER, staff to Senator Davis
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Commented on SB 105 for the sponsor.
MIKE LESSMAN, Community Relations Manager
Office of Children's Services (OCS)
Department of Health and Social Services (DHSS)
POSITION STATEMENT: Answered questions on SB 105.
EDDY JEANS, Director of School Finance
Department of Education and Early Development (DEED)
POSITION STATEMENT: Neutral position on SB 105.
JEAN MISCHEL, Legislative Counsel
Division of Legal and Research Services
Legislative Affairs Agency
POSITION STATEMENT: Answered questions on SB 105.
ACTION NARRATIVE
8:04:00 AM
VICE CHAIR BETTYE DAVIS called the Senate Education Standing
Committee meeting to order at 8:04 a.m. Present at the call to
order were Senators Olson, Stevens and Davis.
SB 134-PRUDENT MANAGEMENT OF INSTITUTIONAL FUNDS
VICE CHAIR BETTYE DAVIS announced consideration of SB 134.
SENATOR PASKVAN, sponsor of SB 134, said the state should
consider adopting this bill because it will make sure that the
best investment practices will govern the actual investment of
institutional funds; it will withdraw obsolete rules governing
prudent total return expenditure and provide a modern rule of
prudence consistent with the rules that will govern the
investment. It will eliminate the differences in investment in
expenditure rules that apply to different types of non-profit
organizations - in other words, the same rules will govern under
all of the Uniform Prudent Management of Institutional Funds Act
(UMPIFA). It will encourage the growth of institutional funds
while eliminating investment risk that threaten principal, and
will assure that there are adequate assets in any institutional
fund to meet program needs, and it will be part of a uniform
national system.
SENATOR PASKVAN said he has letters of support from the
University of Alaska Foundation, The Foraker Group, and the
Rasmussen Foundation. These organizations believe this will get
st
Alaska where it should be in the 21 Century.
8:06:10 AM
SENATOR HUGGINS joined the meeting.
DANA OWEN, staff to the Education committee, advised that the
committee substitute (CS) to SB 134, version \S, incorporates
two changes on page 8, line 21 where "endowment" replaces
"institutional" and on line 24 where "institution" and
"institutional fund" replace "endowment". This is in response to
suggestions by the University and the University Foundation that
noted some of their funds don't qualify technically as
"endowment funds," and they wanted to make sure that they came
under the provisions of the act.
SENATOR HUGGINS moved to adopt CSSB 134, labeled 26-LS0487,
Version S, as the working document of the committee.
VICE CHAIR DAVIS objected for discussion.
SENATOR STEVENS asked what difference those term changes made.
What University funds might they be able to invest because it's
called "institutional funds" not "endowment funds."
SENATOR PASKVAN replied that it was to make sure its application
was as broad as possible. An "endowment fund" on page 6 has a
more narrow definition than "institutional fund." This bill was
sent back to the national committee by Alaska's member and their
recommendation was to substitute "institutional" for
"endowment".
8:08:58 AM
JIM LYNCH, University of Alaska Foundation, Anchorage, AK, said
that Senator Paskvan was correct. They are trying to assure that
what Alaska has is consistent with other states' uniform laws.
It is designed for prudent investment of all types of charitable
organizations that are non-profits.
8:09:51 AM
SENATOR OLSON asked how long the commission has been in place
and what its success rate is with regard to managing funds.
SENATOR PASKVAN replied that this is designed to define
"prudence" so that funds don't dissipate over time, but at the
same time recognizing that in difficult economic times, prudence
may include disbursing from the principal.
8:11:39 AM
SENATOR OLSON asked what has happened to the funds managed by
this group during the 2001 downturn and now during the global
recession.
SENATOR PASKVAN replied that many institutional funds are below
their original contributed capital amount. Mr. Lynch from the
University Foundation in his testimony last week indicated that
of the University's 500-plus funds, 250 were technically "under
water." Many charitable organizations are struggling right now
because of the economic downturn, but their charitable needs
still continue. So, the question is how does a volunteer sitting
on that board in a prudent manner deal with the funds they have
available to meet those charitable needs. That is the intent of
this bill.
SENATOR OLSON said he's having a hard time equating charitable
funds with institutional funds, which are used more to make sure
that "some kind of university or some learning institution can
continue to function in spite of what's happened."
SENATOR PASKVAN responded that specifically the University
distributes scholarships, and students continue to be educated
even in depressed economic times. In fact, the demand for
education increases in a down economy.
8:14:08 AM
JIM LYNCH, University of Alaska Foundation, said the purpose of
an endowment is to support a program in perpetuity. How do you
do that? It requires income as well as consistency. Students who
are getting scholarships are there for four and five years or
more. The issue is how to sustain their scholarships over the
long term prudently. You can't have rigid rules to do that.
While the University is one of the primary managers of
endowments, a lot of other organizations have these funds for
different purposes.
He explained that most of these funds come to the organizations
through contributions. Courts have held with following the
donor's intent rather than rigid rules. The law identified a lot
of areas as to what prudence is and what has to be considered in
making decisions. This guidance is includes "best practices" for
non-profit boards many of which are run by volunteers. Thirty-
seven states have adopted or introduced bills regarding this
rule.
8:17:28 AM
SENATOR OLSON asked if scholarships will be awarded from the
corpus, not just the earnings.
MR. LYNCH replied that this concept really came into play about
40 years ago. It moved from principal and income, which doesn't'
fit the endowment concept very well in today's environment.
"It's purpose and mission that drive this law."
SENATOR OLSON asked SENATOR PASKVAN to interpret whether that is
a yes or no.
MR. LYNCH said the answer is a yes, but the concept of "corpus"
no longer exists.
SENATOR PASKVAN expanded upon his answer. Specifically, this law
is default legislation in the sense that a charitable
contribution has been made that doesn't have express
restrictions on it. Many contributions are made to funds so that
food can be distributed to the needy. The question is can those
monies be used to fulfill the purpose of the organization, which
is to feed the hungry and give scholarships to people when they
need it whether it's good financial times or bad. This says that
prudent management allows for those fiduciaries who are running
a fund to make the distributions that are necessary and
appropriate - unless there are express restrictions regarding
distribution of the capital, like with the Permanent Fund - in
both good and bad financial times.
8:21:16 AM
SENATOR STEVENS asked if this has any impact on the Permanent
Fund.
SENATOR PASKVAN replied that it does not.
8:22:04 AM
VICE CHAIR DAVIS withdrew her objection and version S CS was
adopted.
SENATOR STEVENS moved to report CSSB 134 (EDC) from committee
with individual recommendations and attached fiscal note(s).
There being no objection, the motion carried.
8:23:01 AM
At-ease.
SB 105-FOSTER CARE/CINA/EDUCATION OF HOMELESS
8:24:16 AM
VICE CHAIR BETTYE DAVIS announced consideration of SB 105.
TOM OBERMEYER, staff to Senator Davis, sponsor of SB 105, said
this bill is an act relating to continuing the secondary public
education of a homeless student relating to things like tuition
waivers, loans and medical insurance for a child placed in out-
of-home care by the state, foster care, children in need of aid
and to out-of-home care transition to independent living.
He said that SB 105 is modeled somewhat after HB 126. It
incorporates some provisions of SB 27 and SB 28 and covers a
good deal of area. It provides much needed additional
educational, medical, financial and housing assistance to foster
or out-of-home care children and students as they transition
through and out of Alaska State foster care system.
He stated that an estimated 40 percent of the 2,000 Alaska
foster care youth become homeless after being released from
care. Many others wind up in poverty or become incarcerated at
higher levels than their peers. SB 105 codifies and increases
assistance beyond certain provisions of the federal McKinney-
Vento Act, which is reauthorized as Title X, part C of the No
Child Left Behind Act of 2002, the primary piece of federal
legislation dealing with the education of children and youth
experiencing homelessness in U.S. public schools. Fourteen or
more states have enacted legislation similar to it.
MR. OBERMEYER said that children in foster care struggle
academically and suffer more poverty, low self-esteem, emotional
trauma, social stigma and higher mobility than others. They are
more likely to drop out of school, repeat grades and be placed
in special education. Only 54 percent of young adults who age
out-of-care have completed high school and score 16-20 percent
below youth in the general population in statewide standardized
th
tests and on average read at only a 7 grade level after
thth
completing 10 or 11 grade.
Low educational outcomes are exacerbated by the high mobility of
children in foster care; frequent school changes are associated
with an increased risk of failing a grade in school and of
repeated behavioral problems. The Legal Center for Foster Care
and Education reported that children and youth in out-of-home
care experience on average 1 or 2 foster care placement changes
per year; one-third of children in foster care stay in care for
less than five months and another 17 percent remain in care for
one year or less.
8:28:37 AM
SENATOR STEVENS moved to adopt the committee substitute (CS) to
SB 105, labeled 26-LS0556\R, as the working document.
VICE CHAIR DAVIS objected for discussion purposes.
8:29:14 AM
SENATOR HUGGINS asked Mr. Obermeyer to explain "free tuition" on
page 2, line 25.
MR. OBERMEYER explained that "free tuition" is a waiver of unmet
need for tuition fees, room and board, and expenses at a state
supported educational institution for a person who was placed in
out-of-home care at age 16 or older and who meets specified
eligibility requirements. The waiver is subject to
appropriation.
VICE CHAIR DAVIS advised that there is a waiver in place, but it
only accommodates 10 students; this bill would open it up for
more.
SENATOR HUGGINS asked about the age criteria for qualification.
MR. OBERMEYER replied that this refers to persons who enroll in
a state supported educational institution, if they provide proof
that they were placed in out-of-home care not less than six
consecutive months after becoming 16 and are under 29 years of
age.
SENATOR HUGGINS remarked that it covers a broad spectrum of
people - 29 years old is pretty old for the foster care system.
8:31:49 AM
VICE CHAIR DAVIS remarked that those youngsters coming out of
foster care may not be prepared to go on to advanced education
for some time and may take longer to get through it.
SENATOR STEVENS said it makes sense to put a time limit on it
like and four or five years per individual. He didn't know if
they wanted to include people who are going on to their Masters
or Doctorate.
SENATOR OLSON said he agreed with the chair. A lot of the kids
in his district coming out of foster care and going to boarding
school take a number of years to focus on something. Even in
their mid-20s they seem to not be that focused. Once they get to
29 or 30 years old, they tend to know. However, he agreed with
Senator Stevens that they don't want to subsidize Masters and
PhDs.
8:34:17 AM
SENATOR HUGGINS said his wife is the principal of an alternative
school, and he thinks they are just dealing with the symptoms of
dropping out of school, which is a larger problem. He wanted to
invest in a process that reduces these numbers - and not look at
just the education component. The dropout rate for all students
needs to be addressed. Many are "couch students" who live on a
couch for three nights at a time and then move to a different
couch.
VICE CHAIR DAVIS responded that they want all kids to have some
of the provisions in this bill, and they are probably getting
it, because they have a set of parents to make sure they get
somewhere on time and they don't have to move to a different
foster home every other week and have a new school to go to.
Besides that, McKinney-Vento is a federal law and this bill
complies with that. She said school districts are participating
as much as they can, but they don't have enough money to provide
for all the federal provisions.
8:37:19 AM
SENATOR HUGGINS agreed with her about foster kids who are
homeless. He views federal law as a minimum, and "you can always
tighten up federal law." The system is not bent; it's broken,
and that needs to be fixed.
8:37:52 AM
MR. OBERMEYER said the seven-day requirement for getting records
is tighter in HB 105 than McKinney-Vento, which allows for 20
days. While this bill focuses to a large extent on promoting
these students through college, the goal is graduating from
college within 4 years after high school. Only 6 percent of the
students in the state achieve that whether or not they are
foster kids. This group of children has been identified as the
neediest in the educational system, and they always fall through
the cracks because of the lack of family support.
8:39:23 AM
SENATOR STEVENS asked if federal funds follow the McKinney-Vento
Act for implementation.
MR. OBERMEYER replied that some funds come from the federal
government through McKinney-Vento, but the rest have to be
picked up by the school districts. It tends to be a larger
problem in the bigger districts.
VICE CHAIR DAVIS said she would like someone from the department
to speak to this issue next time the bill is heard, and not just
to answer questions.
8:41:29 AM
MIKE LESSMAN, Community Relations Manager, Office of Children's
Services (OCS), Department of Health and Social Services (DHSS),
asked who he should have come to speak to the bill next time.
VICE CHAIR DAVIS replied someone who deals with the foster care
system and knows what the problems are. She remarked that no one
was here from the department who knew about the issue.
MR. LESSMAN said the department sees great merit in this bill.
It benefits those youth who without their choosing have become
involved in the state's child protective services system (CPS).
There is work to be done at both ends of the foster care system
in CPS and OCS. He said that the OCS just went through its
second round of federal child and family services reviews and
the department concurs with its Region 10 partners that the area
in most need of urgent attention are the safety of children.
That is the timely initiation of investigations, the assessment
of safety and risk of kids in their homes, prevention of
removing kids from their homes if it's possible to keep them
safely there, and if they must be removed to reunify them as
quickly as possible with their families.
Their intent is to focus on the front end work that will have a
correspondingly positive effect on the back end of the foster
care system by reducing the number of kids who are looking at
these transitional challenges as they exit the system.
8:43:53 AM
SENATOR STEVENS asked if the McKinney-Vento Act was an unfunded
mandate.
MR. LESSMAN replied that Mr. Jeans from the Department of
Education could better address that.
8:44:36 AM
SENATOR HUGGINS asked how many kids are actually homeless, but
not in the system.
MR. LESSMAN said he did not know the answer.
SENATOR HUGGINS said someone in his organization should have
some idea how many kids are out there who are actually homeless
and should, but do not, end up in the foster care system.
SENATOR STEVENS said this has a serious impact on the University
since he assumed it would be asked to pick up the cost of
housing these students; and he wanted to hear from them.
8:47:42 AM
EDDY JEANS, Director of School Finance, Department of Education
and Early Development (DEED), said the state is getting only
$170,000 from the federal government right now to support
McKinney-Vento. It is distributed on a competitive basis, and
the districts participating are Anchorage, Mat-Su, Juneau and
Kenai. Superintendent Comeau indicated that the Anchorage school
district spends an additional $175,000 per year on top of its
state grant to transport homeless children.
He does not have a fiscal note for this bill, yet, although he
is working with districts on getting it. He wanted to point out
on page 2 the definition of "homeless student" expands McKinney-
Vento beyond kids waiting for placement in foster care to
include those who are already in foster care. The McKinney-Vento
applies only to children awaiting placement.
MR. JEANS explained that the intent of the legislation is to
allow a child to remain in his school of origin for one year.
Then he could start the new school year in his new placement
district. He suggested that language on page 2, line 20, is open
ended, and could be interpreted to allow the child to stay in
the school of origin indefinitely. Parameters need to be put on
the school of origin.
VICE CHAIR DAVIS said that language was already in version R.
8:51:15 AM
SENATOR OLSON asked if the department is in favor of the bill.
MR. JEANS responded that the department is neutral on SB 105.
SENATOR STEVENS remarked that the University fiscal note says it
makes 10 foster youth tuition waiver scholarships available per
year, and asked where that money comes from.
MR. JEANS said he didn't know, but he would be happy to research
it.
VICE CHAIR DAVIS said the University picks up the tab.
8:52:40 AM
SENATOR OLSON asked why private schools aren't included in this
bill, especially since they have a better success rate in
keeping students.
MR. JEANS said he did not know that either.
VICE CHAIR DAVIS asked where that is in the bill.
SENATOR OLSON directed her to page 2, line 26.
VICE CHAIR DAVIS said the University is under the state; no
private institutions have been willing to step up to the plate
in this respect.
8:54:13 AM
VICE CHAIR DAVIS asked Mr. Obermeyer to go through the changes
in version R.
MR. OBERMEYER said the changes are that Section 1 extends
McKinney-Vento provisions for comparable education and
transportation to school of origin for the remainder of a school
year or if the student is attending for a summer term. It
removed a paragraph that related to requiring a superintendent
to make a written finding that a waiver of the requirement is in
the student's best academic interests and the finding is mailed
to the school board and persons in charge of the Division of
Health and Social Services.
He said "foster care" was changed to "out-of-home care"
throughout the bill, because that phrase can include relatives
and other types of placements as well as for purposes of
transitioning to the independent living program in sections 13-
15. It increases the one-year extension of commitment to state
custody in the best interests of the child beyond 19 years of
age from 20 to 21 in section 9. It eliminates state educational
loans and deferred payments and interest for a child who was in
out-of-home care and who was eligible for tuition waivers to
offset the person's tuition fees, room and board, and expenses
in state-supported educational institutions.
In section 17 it limits the monetary stipend upon leaving foster
care to not more than one year, and shall end before the
individual is 23 years of age.
8:57:27 AM
JEAN MISCHEL, Legislative Counsel, Division of Legal and
Research Services, Legislative Affairs Agency, stated that the
provision for a superintendant to waive the McKinney-Vento
requirements was deleted and the legislative appropriation
language on page 2 was added.
8:58:16 AM
SENATOR STEVENS asked if a student in MatSu, for instance, wants
to take advantage of the free tuition at the college there where
there is no dormitory situation, would this provide some money
for living assistance. It appears that it would not.
VICE CHAIR DAVIS responded that they can discuss that.
8:59:14 AM
SENATOR HUGGINS said it wasn't clear to him what responsibility
the parents or guardians have financially.
VICE CHAIR DAVIS said these kids are already not with their
parents who generally have no financial means anyhow. If the
family has resources, the state would expect them to assist.
SENATOR HUGGINS said he understands that, but he didn't see any
fallback language as to what the responsibilities of the parents
or guardians are.
VICE CHAIR DAVIS said that would probably be taken under
consideration.
9:00:46 AM
MS. MISCHEL remarked that a phrase on page 3, line 3, referring
to "unmet needs" implies that the student has already used his
or her own resources. The loan provisions were taken out of this
version, so there is no real mechanism to require a parent or
guardian to pay tuition for a student over the age of 18. A
Supreme Court decision has found there is no legal obligation
even if the parents still haven't had their parental rights
terminated, for a parent to pay for postsecondary education.
VICE CHAIR DAVIS held SB 105 in committee.
9:03:24 AM
VICE CHAIR DAVIS found no further questions and adjourned the
meeting at 9:03 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 105 changes from original to vR.pdf |
SEDC 3/25/2009 8:00:00 AM |
SB 105 |
| CSSB 134 vS.pdf |
SEDC 3/25/2009 8:00:00 AM |
SB 134 |
| SB 105, CS vR.pdf |
SEDC 3/25/2009 8:00:00 AM |
SB 105 |
| SB 105, CS vR Sectional Analysis.pdf |
SEDC 3/25/2009 8:00:00 AM |
SB 105 |
| SB 105 Sponsor Statement.pdf |
SEDC 3/25/2009 8:00:00 AM |
SB 105 |
| SB 105 Key Provisions.pdf |
SEDC 3/25/2009 8:00:00 AM |
SB 105 |
| SB 105 McKinney-Vento Q&A.pdf |
SEDC 3/25/2009 8:00:00 AM |
SB 105 |
| SB 105 Covenent House lttr.pdf |
SEDC 3/25/2009 8:00:00 AM |
SB 105 |
| SB 134 Sponsor Statement.pdf |
SEDC 3/25/2009 8:00:00 AM |
SB 134 |
| SB 134 Commonfund article.pdf |
SEDC 3/25/2009 8:00:00 AM |
SB 134 |
| SB 134 U of A Foundation lttr of support.pdf |
SEDC 3/25/2009 8:00:00 AM |
SB 134 |
| SB 134 Foraker Group lttr of support.pdf |
SEDC 3/25/2009 8:00:00 AM |
SB 134 |
| SB105-DHSS-CSM-03-05-09.pdf |
SEDC 3/25/2009 8:00:00 AM |
SB 105 |
| SB105-DHSS-FCBR-03-05-09.pdf |
SEDC 3/25/2009 8:00:00 AM |
SB 105 |
| SB105-DHSS-FP-03-05-09.pdf |
SEDC 3/25/2009 8:00:00 AM |
SB 105 |
| SB105-UA-Sysbra-03-23-09.pdf |
SEDC 3/25/2009 8:00:00 AM |
SB 105 |
| SB105-EED-ESS-03-25-09.pdf |
SEDC 3/25/2009 8:00:00 AM |
SB 105 |
| SB134-LAW-CIV-3-19-09.pdf |
SEDC 3/25/2009 8:00:00 AM |
SB 134 |
| UPMIFA Map 2-6-09 v1.pdf |
SEDC 3/25/2009 8:00:00 AM |
SB 134 |
| UPMIFA Sectional Analysis v4.doc |
SEDC 3/25/2009 8:00:00 AM |
SB 134 |
| Why adopt UPMIFA v3.doc |
SEDC 3/25/2009 8:00:00 AM |
SB 134 |