Legislature(2003 - 2004)

05/15/2003 08:45 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                     SENATE FINANCE COMMITTEE                                                                                 
                           May 15, 2003                                                                                       
                              8:45 AM                                                                                         
SFC-03 # 99, Side A                                                                                                             
SFC 03 # 99, Side B                                                                                                             
SFC 03 # 100, Side A                                                                                                            
CALL TO ORDER                                                                                                               
Co-Chair Gary Wilken convened  the meeting at approximately 8:45 AM.                                                            
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Con Bunde, Vice Chair                                                                                                   
Senator Robin Taylor                                                                                                            
Senator Donny Olson                                                                                                             
Senator Ben Stevens                                                                                                             
Senator Lyman Hoffman                                                                                                           
Also  Attending:   REPRESENTATIVE  MIKE CHENAULT;  ERNESTA  BALLARD,                                                          
Commissioner, Department  of Environmental Conservation; TOM BOUTIN,                                                            
Deputy   Commissioner,  Department   of  Revenue;   LAURA   GLAISER,                                                            
Director, Division of Elections,  Office of the Lieutenant Governor;                                                            
SARAH  FELIX,  Assistant  Attorney  General,  Governmental   Affairs                                                            
Section, Civil  Division, Department of Law; KEVIN  SWEENEY, Special                                                            
Assistant, Office  of the Commissioner, Department  of Education and                                                            
Early  Development;  EDDY  JEANS,  School  Finance  Manager,  School                                                            
Finance  and   Facilities  Section,   Education  Support   Services,                                                            
Department  of  Education   and  Early  Development;   JOYCE  KITKA,                                                            
Volunteer, Alaska  Association for Community Education;  JEANNE FOY,                                                            
Teacher, Alyeska  Central School,  representing the Alyeska  Central                                                            
School Teachers Association;  CECILIA MILLER, Alyeska Central School                                                            
Education Association;  RYNNIEVA MOSS, Staff to Representative  John                                                            
Coghill,  Jr.;  JESSE   VANDERZANDEN,  Executive  Director,   Alaska                                                            
Outdoor Council;  DAVID MARQUEZ, Assistant Attorney  General, Office                                                            
of the Attorney General, Department of Law;                                                                                     
Attending  via Teleconference:    From  Kenai: ROGER  SHANNON;  From                                                          
Barrow:  MIKE  JEFFERY; From  Fairbanks:  JULIE  WILD-CURRY,  Alaska                                                            
Association  for  Community   Education;  BYRON  HALEY,   President,                                                            
Chitina Dipnetters Association;  PAUL HOLLAND, Board Member, Chitina                                                            
Dipnetters  Association; MARK HEM,  Owner, Chitina One-Stop  grocery                                                            
store,  Hem Charters  guided dip net  fishing, a  café, and  private                                                            
property  in   the  Chitina  area,   and  Vice  President,   Chitina                                                            
Dipnetters  Association;  From  an  off net  location:  ED  SNIFFEN,                                                            
Assistant Attorney  General, Fair Business Practices  Section, Civil                                                            
Division, Department of Law;                                                                                                    
SUMMARY INFORMATION                                                                                                         
HB  61-OIL & GAS TAX CREDIT FOR EXPLORATION/DEV                                                                                 
The Committee  heard from  the sponsor. An  amendment was  withdrawn                                                            
and the bill moved from Committee.                                                                                              
SB 215-SEAFOOD AND FOOD SAFETY LABORATORY                                                                                       
The   Committee  heard   from   the  Department   of  Environmental                                                             
Conservation  and the  Department of  Revenue. The  bill moved  from                                                            
HB 266-ELECTIONS & VOTER REGISTRATION                                                                                           
The  Committee  heard  from  the  Division   of  Elections  and  the                                                            
Department of Law. The bill moved from Committee.                                                                               
HB 165-REPEAL COMMUNITY SCHOOLS GRANT PROGRAM                                                                                   
The  Committee heard  from  the Department  of Education  and  Early                                                            
Development, school  districts and community school  supporters. The                                                            
bill was held in Committee.                                                                                                     
HB 171-REPEAL CHARTER SCHOOL GRANTS                                                                                             
The  Committee heard  from  the Department  of Education  and  Early                                                            
Development  and  a  member  of the  public.  The  bill  moved  from                                                            
HB 174- CORRESPONDENCE STUDY/SCHOOL BD DUTIES                                                                                   
The  Committee heard  from  the Department  of Education  and  Early                                                            
Development  and representatives  from the  Alyeska Central  School.                                                            
The bill moved from Committee.                                                                                                  
HB 210-CHITINA DIP NET FISHERY                                                                                                  
The Committee  heard from the sponsor and representatives  from user                                                            
groups. The bill moved from Committee.                                                                                          
HB 225-MONOPOLY AND RESTRAINT OF TRADE ACTIONS                                                                                  
The Committee  heard from the Department  of Law and the  bill moved                                                            
from Committee.                                                                                                                 
HB 154-UNDER SCHOOL AGE STUDENTS                                                                                                
The  Committee heard  from  the Department  of Education  and  Early                                                            
Development and the bill reported from Committee.                                                                               
     SENATE CS FOR CS FOR HOUSE BILL NO. 61(RES)                                                                                
     "An Act establishing  an exploration and development  incentive                                                            
     tax credit  for operators and working interest  owners directly                                                            
     engaged in the exploration  for and development of gas for sale                                                            
     and  delivery  without  reference  to volume  from  a lease  or                                                            
     property  in the state; and providing  for an effective  date."                                                            
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee. At adjournment  of the previous hearing a motion to adopt                                                            
Amendment #1 was on the table.                                                                                                  
Co-Chair Wilken  reminded that this bill "allows a  tax credit equal                                                            
to ten-percent  of qualified  capital investment  as well as  labor,                                                            
seismic  and  associated  costs  related   to  gas  exploration  and                                                            
Amendment  #1:  This  amendment  inserts,   "east  of  meridian  156                                                            
degrees"  into  Section  1,  Sec.  43.20.043.  Gas  exploration  and                                                            
development  tax credit. The  amended language  on page 3,  lines 10                                                            
through 14 reads as follows.                                                                                                    
          (f) A taxpayer is not entitled to a credit under this                                                                 
     section  for expenditures  that  are made or  incurred for  the                                                            
     qualified  capital investment  or for  qualified services  made                                                            
     for exploration  and development of gas that  occur in the area                                                            
     of Alaska lying north  of 68 degrees North latitude and east of                                                            
     meridian 156 degrees  or that are made or incurred to transport                                                            
     gas from reserves  located in the area of Alaska lying north of                                                            
     68 degrees North latitude and east of meridian 156 degrees.                                                                
Senator Olson  WITHDREW his  motion to adopt  the amendment  without                                                            
REPRESENTATIVE  MIKE CHENAULT,  sponsor of  the bill, clarified  for                                                            
Senator  Taylor's  benefit  that  the  Senate  Resources   committee                                                            
substitute is the preferred version.                                                                                            
Senator  Olson  commented  that  he withdrew  his  motion  to  adopt                                                            
Amendment #1 because  the portion of his district  that was excluded                                                            
in  this legislation  was  addressed  in SB  185. He  requested  the                                                            
Committee  extend  consideration  to Western  Alaska  when  debating                                                            
future similar legislation.                                                                                                     
Senator Taylor  offered a motion to  report the bill from  Committee                                                            
with individual recommendations and accompanying fiscal notes.                                                                  
Without  objection SCS  CS HB  61 (RES)  MOVED from  Committee  with                                                            
accompanying  zero fiscal notes: #1  from the Department  of Natural                                                            
Resources and #2 from the Department of Revenue.                                                                                
     CS FOR SENATE BILL NO. 215(STA)                                                                                            
     "An  Act  relating  to  a  lease-purchase  agreement  for,  the                                                            
     construction  and equipping of, and the financing  of a seafood                                                            
     and  food safety  laboratory  facility  to be  operated by  the                                                            
     Department   of  Environmental   Conservation,  including   the                                                            
     issuance  of  certificates  of participation,  and  the use  of                                                            
     certain   investment  income   for  certain  construction   and                                                            
      equipping costs; and providing for an effective date."                                                                    
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Co-Chair  Wilken stated  that  this bill,  sponsored  by the  Senate                                                            
Rules Committee at the  request of the Governor "authorizes the sale                                                            
of $14,145,000  in certificates of  participation for the  financing                                                            
of  construction  of a  new  seafood and  food  safety  lab for  the                                                            
Department of Environmental Conservation."                                                                                      
ERNESTA   BALLARD,   Commissioner,   Department   of  Environmental                                                             
Conservation, read testimony into the record as follows.                                                                        
     Thank  you  for  the  opportunity  to  testify  today.  SB  215                                                            
     provides  the  funding mechanism  for  a new  Seafood and  Food                                                            
     Safety  Laboratory.  This  expense  has  been included  in  the                                                            
     capital budget.                                                                                                            
     As Commissioner  of the department  responsible for  protecting                                                            
     the  environment  and  human  health,  I  can  testify  to  the                                                            
     importance  of this lab. In our seafood and food  safety lab we                                                            
     analyze  raw,  finished  and  value-added   food  products  for                                                            
     bacteria,  chemicals,   and toxic  contaminants.   We  maintain                                                            
     capabilities  and FDA certifications that private  labs cannot.                                                            
     We operate  on schedules  that are not  available from  private                                                            
     labs  and can assume  the greater liability  needed to  perform                                                            
     analysis  for paralytic shellfish poisoning.  We cooperate with                                                            
     emerging  industry, such  as the growing  dive fisheries  to be                                                            
     sure time-critical  water and raw product analysis is available                                                            
     and market  commitments are met. We are qualified  to train and                                                            
     certify  private labs so that  they can operate in established                                                             
     and high-demand testing markets.                                                                                           
     DEC  has  leased  a  facility  in Palmer  for  34  years.  This                                                            
     facility  will not be available  after 2006. It is overcrowded                                                             
     and  not  fully compliant  with  safety  codes  and  laboratory                                                            
     design standards.  It was originally placed in  Palmer when the                                                            
     principal lab business  was agriculture and dairy. The emerging                                                            
     value  added seafood  industries in coastal  Alaska have  added                                                            
     significant   and  time-sensitive   testing  demands   for  our                                                            
     service.  Our  proposed  new lab  will  be in  Anchorage  where                                                            
     valuable  hours  can be  saved  between sample  collection  and                                                            
     testing for raw and live seafood products.                                                                                 
     Our laboratory  functions are  essential to protect  the health                                                            
     of  all Alaskans.  The  Governor,  past legislatures,  and  the                                                            
     Commissioners  of  Revenue, Department  of  Transportation  and                                                            
     Public   Facilities   and   DEC  have   reviewed   the   design                                                            
     specifications,  equipment  requirements  and  expense of  this                                                            
     lab.   We  considered  alternative   locations  and   financing                                                            
     mechanisms  for a modern facility  sized and equipped  for long                                                            
     term   service  to  the  state.   Specifically,  we   carefully                                                            
     considered  the possibility of  locating in remodeled  space at                                                            
     the ASI  facility in Anchorage.  Our requirements would  occupy                                                            
     approximately 5% of that space.                                                                                            
     The  process of  acquiring a  new seafood and  food safety  lab                                                            
     began seven years  ago with a feasibility study. We received an                                                            
     appropriation of $150,000,  to obtain an independent evaluation                                                            
     of both build and  lease options. This analysis showed that the                                                            
     most  economical choice  is a state  owned laboratory  financed                                                            
     with   lease/purchase    bonds   known   as   Certificates   of                                                            
     Participation. The  legislature agreed and in 2001 appropriated                                                            
     $1,300,000 to design  this facility. This is a conservative and                                                            
     cost conscious proposal.  The building contains only laboratory                                                            
     and lab  support space: meeting  and classroom facilities  will                                                            
     be available  in the adjacent  public health lab. The  building                                                            
     materials  were selected  for low and  simple maintenance.  The                                                            
     design and materials  are similar to the public health lab that                                                            
     was built several years ago on schedule and within budget.                                                                 
     We are reviewing  the fees the laboratory charges  for services                                                            
     and are  comparing them to other  states' fees. It is  clear we                                                            
     can,  and  should  charge  more. We  will  begin  drafting  the                                                            
     necessary regulations this summer.                                                                                         
Senator Taylor  spoke to earlier concerns he had about  the need for                                                            
a similar laboratory  located in Southeastern  Alaska, specifically                                                             
to  support   the  dive  fisheries   and  seafood  and  mariculture                                                             
industries. He supported  this proposal and applauded the efforts of                                                            
the commissioner.                                                                                                               
Senator Taylor  offered a motion to  report the bill from  Committee                                                            
with individual recommendations and accompanying fiscal notes.                                                                  
Co-Chair Wilken objected for the purpose of a question.                                                                         
Co-Chair Wilken asked the location of the proposed laboratory.                                                                  
Commissioner  Ballard  replied  it  would  be located  next  to  the                                                            
recently constructed  public health  laboratory, which has  adequate                                                            
meeting, training  and other common spaces. She stated  the proposed                                                            
facility would  occupy the "minimal footprint" necessary  to perform                                                            
laboratory functions,  as other functions could be  conducted in the                                                            
public health laboratory facility.                                                                                              
TOM BOUTIN,  Deputy Commissioner,  Department of Revenue,  testified                                                            
that the  State has  utilized this  lease financing  mechanism  many                                                            
times in the past and is a "well understood credit".                                                                            
Co-Chair Wilken  removed his objection  and SB 215 (STA)  MOVED from                                                            
Committee  with   zero  fiscal  note  #2  from  the  Department   of                                                            
Environmental Conservation  and fiscal note #3 for $200,000 from the                                                            
Department of Revenue.                                                                                                          
     CS FOR HOUSE BILL NO. 266(FIN)                                                                                             
     "An Act relating  to questioned ballots and questioned  voters,                                                            
     voter   registration,    training   of   election    officials,                                                            
     preparation  of  election  materials,   provision  of  election                                                            
     materials,  forms,  and  supplies  for  polling  places,  voter                                                            
     identification,  absentee  voting,  and counting  ballots;  and                                                            
     providing for an effective date."                                                                                          
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Co-Chair  Wilken stated  this  bill, sponsored  by  the House  Rules                                                            
Committee  at  the   request  of  the  Governor,  "makes   necessary                                                            
statutory changes  to comply with the election reform  law signed by                                                            
President Bush  in 2002, named the  Help America Vote Act,  commonly                                                            
known as HAVA."                                                                                                                 
LAURA GLAISER, Director, Division of Elections, Office of the                                                                   
Lieutenant Governor, read the sponsor statement into the record as                                                              
     In October  2002, President Bush signed the "Help  America Vote                                                            
     Act", (H.R.  3295) into law (P.L. 107-252). HAVA  is the result                                                            
     of a bipartisan effort  in Congress to make sweeping changes to                                                            
     federal election laws  to improve the overall administration of                                                            
     elections,  increase accessibility to those with  disabilities,                                                            
     and also to prevent voter fraud.                                                                                           
     Many  changes  required  under  HAVA do  not  require  amending                                                            
     Alaska  statute, but  HB 266 includes  those necessary  to meet                                                            
     federal  mandates. Changes recommended  in the bill  before you                                                            
     follow  the  intent  of  the  federal  law  and  do  not  place                                                            
     unnecessary  burdens on the voter. It is imperative  that these                                                            
     changes mandated  by federal law are passed by  the Legislature                                                            
     this year.                                                                                                                 
     HB  266 also  includes  changes  the Division  recommends.  The                                                            
     Division   supports   the  language   recommended  in   Senator                                                            
     Lincoln's  SB 24, and  it has been included  in this bill  with                                                            
     her    permission.    Other   changes    regarding    returning                                                            
     identification/  voter cards to other jurisdictions,  reference                                                            
     to a "master  list", and adding  types of information  that can                                                            
     be  provided  by  the voter  when  registering  in  person  are                                                            
     requested by the Division in this bill.                                                                                    
     The  House   State  Affairs  Committee  removed   the  language                                                            
     suggested  by  the  Division  changing   the  term "questioned                                                             
     ballots"  to "provisional ballots."  The federal law  refers to                                                            
     "provisional  voting", (which Alaskans refer  to as "questioned                                                            
     voting")  and the Division originally recommended  changing the                                                            
     references in statute to conform to the federal language.                                                                  
     The  State Affairs Committee  also restored  references  to the                                                            
     Division  sending voters letters regarding the  status of their                                                            
     absentee,  questioned, or partially counted ballot  in addition                                                            
     to the "free access system" required in HAVA.                                                                              
     The  House Finance  Committee  substitute  removes perhaps  the                                                            
     most  significant change  NOT mandated  be the federal  act. In                                                            
     the  first two versions  of the bill  the Division recommended                                                             
     replacing  the terms "non partisan"  and "undeclared"  with the                                                            
     term "unaffiliated".  As a result, there will  be no changes to                                                            
     the current references to "non partisan" and "undeclared".                                                                 
     The Division of Elections asks your support of House Bill 266.                                                             
Senator Bunde spoke to  concerns about dual registration and lack of                                                            
a  photograph  on  voter identification   cards.  He shared  he  has                                                            
reviewed  voter  lists and  found  voters  registered  using a  post                                                            
office box  as indication of residency.  He opined that enforcement                                                             
has been "lax"  in ensuring that people  vote in the districts  they                                                            
reside.  He  asserted  that  the  proof  of  residency  required  to                                                            
register to vote, including  hunting and fishing licenses, a utility                                                            
bill, bank statement, or  government document, could be "stolen from                                                            
a  mailbox" and  do  not have  a  photograph  of the  addressee.  He                                                            
suggested that  photo identification is becoming more  necessary for                                                            
air travel, and should  therefore be more commonly held by residents                                                            
and would be a reasonable requirement for registering to vote.                                                                  
Ms. Glaiser  noted this legislation  does not  relate to the  act of                                                            
registering to vote but  rather to actual voting. She commented that                                                            
voter registration cards do not include photo identification.                                                                   
Senator Bunde remarked  that photo identification should be required                                                            
for voting.                                                                                                                     
SARAH  FELIX,  Assistant  Attorney  General,  Governmental   Affairs                                                            
Section, Civil  Division, Department of Law, interjected  that photo                                                            
identification  is not required by  HAVA and would be a policy  call                                                            
of the Legislature.                                                                                                             
Senator Taylor  offered a motion to  report the bill from  Committee                                                            
with individual recommendations and accompanying fiscal note.                                                                   
Senator Taylor then objected  to the motion for discussion purposes.                                                            
Senator Taylor commended  on the hard work of the Division staff and                                                            
director, given  the limited funds available. He commented  that the                                                            
intent  of this  legislation  is  to comply  with  federal  mandate,                                                            
although  he agreed with  Senator Bunde that  a "tighter system"  is                                                            
Senator Olson  asked about  provisions for  rural voters who  do not                                                            
posses official photo identification.                                                                                           
Ms. Glaiser told of the  provision inserted in the bill allowing for                                                            
special absentee  ballots for voters who reside a  distance from the                                                            
polling place.  She stated this was  done at the request  of Senator                                                            
Georgianna Lincoln.                                                                                                             
Senator Bunde  talked about an incident involving  a ballot possibly                                                            
cast  in the  name of  a deceased  person.  He asked  what proof  of                                                            
identity  is required  before  an  absentee ballot  is  mailed to  a                                                            
Ms. Glaiser  replied  that applicants  must submit  a copy of  photo                                                            
Senator  Bunde asked about  efforts to  purge improperly  registered                                                            
Ms. Glaiser  replied that this issue  would be addressed  during the                                                            
Legislative interim. She  noted statutory changes could be required,                                                            
as the current purge system  is based on the Motor Voter Act enacted                                                            
ten years prior.  She relayed she has discussed the  matter with the                                                            
US Department of Justice.                                                                                                       
Senator Bunde  asked if legislation would be necessary  to allow for                                                            
the comparison of voter  registration residences with permanent fund                                                            
dividend applications.                                                                                                          
Ms.  Glaiser assured  the  legislation  before the  Committee  would                                                            
allow such comparisons.                                                                                                         
Senator   Olson   commented  that   he   does  not   require   photo                                                            
identification  when transporting paying passengers  through his air                                                            
taxi service.                                                                                                                   
Senator Taylor  removed his  objection to the  motion to report  the                                                            
bill from Committee.                                                                                                            
Co-Chair  Wilken referenced  the third  paragraph  of the April  11,                                                            
2003 letter from Governor  Murkowski [copy on file] introducing this                                                            
legislation, which reads as follows.                                                                                            
     …Upon certification  of compliance with the HAVA, each state is                                                            
     eligible   to  receive  various   payments  from  the   federal                                                            
     government  to  use in  implementing  the requirements  of  the                                                            
     HAVA. Alaska is projected  to receive payments of approximately                                                            
     $5,000,000 per year for three years to implement the HAVA.                                                                 
Co-Chair Wilken thanked  Ms. Glaiser for her efforts to secure these                                                            
federal funds.                                                                                                                  
There was  no objection  and CS  HB 266 (FIN)  MOVED from  Committee                                                            
with a  zero fiscal note  #2 from the Department  of Administration                                                             
and a  $382,000  fiscal note  #3 from  the Office  of the  Governor,                                                            
Division of Elections.                                                                                                          
AT EASE 9:09 AM / 9:09 AM                                                                                                       
     CS FOR HOUSE BILL NO. 165(HES)(efd fld)                                                                                    
     "An Act relating to community schools."                                                                                    
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Co-Chair Wilken  explained this bill,  sponsored by the House  Rules                                                            
Committee at the request  of the Governor, "eliminates the community                                                            
schools  grant  program. The  $500,000  for  this program  has  been                                                            
deleted  in  both  the  House  and  Senate  operating   budgets.  In                                                            
addition,  HB 165  places  in the  uncodified  law,  a findings  and                                                            
intent section regarding community schools."                                                                                    
KEVIN  SWEENEY,  Special  Assistant,  Office  of  the Commissioner,                                                             
Department  of Education and Early  Development testified  that this                                                            
bill addresses the statutes  relating to the community schools grant                                                            
program.  This grant  program,  he  stated, began  in  1975 and  its                                                            
purpose was  to provide  financial support  to encourage and  assist                                                            
local school  districts in the establishment  of community  schools.                                                            
He  emphasized  the  intent  was  to  provide   start-up  funds.  He                                                            
expressed  that the grant  program has  been "extremely successful"                                                             
and that to  date, the State has granted  over $30 million  to local                                                            
school  districts  to  assist  in establishing   community  schools.                                                            
Today, he noted  53 school districts  operate community schools  and                                                            
added that the funds appropriated  for community schools have helped                                                            
the districts  "grow their entire  community education programs"  to                                                            
include activities  such as "before  and after child care"  remedial                                                            
programs for students and adult education.                                                                                      
Mr.  Sweeney  stressed  that  the Administration   is "by  no  means                                                            
suggesting  that we  want to  close and  end the  community  schools                                                            
program." He expressed  the program provides "a very good service to                                                            
students  and adults  alike,"  which  should continue.  However,  he                                                            
remarked  that the  Administration  is reducing  State spending  and                                                            
this  program was  identified  as "a  very reasonable  cut"  because                                                            
start-up funds have been provided for 28 years.                                                                                 
Mr. Sweeney  informed that if fully  funded, the program  would cost                                                            
the State approximately  $3.3 million annually, although the program                                                            
has not  been fully funded  since the middle  1980s and instead  has                                                            
been  appropriated  between  $400,000 and  $800,000.  Currently,  he                                                            
furthered, the  program is not funded at all and the  Administration                                                            
does  not  anticipate  funding  available   for  the  coming  years.                                                            
Therefore,  he remarked this legislation  removes the grant  program                                                            
from statute.                                                                                                                   
Mr.  Sweeney  assured  this  bill  does  not  prevent  local  school                                                            
districts  from operating  community schools.  He asserted  that the                                                            
grant  funds comprise  a small  percentage  of the  funds raised  by                                                            
local school  districts for community  schools activities.  He spoke                                                            
to the  $2 million  community services  component  of the  Anchorage                                                            
School District  budget, of  which the State  provides $150,000.  By                                                            
removing  the State's  portion,  he  predicted the  local  districts                                                            
could offset  shortfalls with  increased user  fees, "help  from the                                                            
community", or other grants.                                                                                                    
Senator Taylor  offered a motion to  report the bill from  Committee                                                            
with individual recommendations and accompanying fiscal note.                                                                   
Senator Taylor  then objected to the motion for purposes  of further                                                            
Senator  Bunde supported  the continuance  of the community  schools                                                            
programs and asked the  average tuition increase necessary to offset                                                            
the loss of State funding.                                                                                                      
Mr. Sweeney  responded that the amount  would vary by community.  He                                                            
exampled Anchorage and  the approximately 55,000 annual participants                                                            
in community schools  activities and the current revenue  of $65,000                                                            
to $70,000  generated  from user  fees  that is  deposited into  the                                                            
school district's  general  fund. He predicted  if those funds  were                                                            
invested  into the  community  schools program  and  user fees  were                                                            
increased   "a  little  over   a  dollar"   the  $150,000   formally                                                            
appropriated by the State would be offset.                                                                                      
Senator Olson  expressed that in rural communities,  schools tend to                                                            
be the largest  facility and subsequently the location  for funerals                                                            
and other community  activities. He  asked if education funds  could                                                            
be used to pay utilities expenses for these functions.                                                                          
Mr. Sweeney  was unsure  if community  schools  funds are  currently                                                            
used for these  purposes, and pointed out the average  appropriation                                                            
for smaller  schools is $4,000. He  pointed out this amount  is less                                                            
than  the amount  a  school  district must  absorb  as  a result  of                                                            
decreased enrollment.  He stated that  foundation formula  funds are                                                            
normally used for utility  expenses, building maintenance, etc., and                                                            
he  surmised  are  therefore   contributing  significantly   to  the                                                            
community schools expenses.                                                                                                     
EDDY JEANS,  School Finance Manager,  School Finance and  Facilities                                                            
Section,  Education Support  Services, Department  of Education  and                                                            
Early Development spoke  a spreadsheet titled, "Alaska Department of                                                            
Education   and  Early   Development,   FY  02   Community   schools                                                            
expenditures  and grants, Prepared  3/12/03, Updated 4/28/03"  [copy                                                            
on  file]. This  spreadsheet  lists  each  school district  and  its                                                            
community  schools  expenditures,   the  State  allocation  to  each                                                            
district,  and the  percentage  of grant  to expenditures  for  each                                                            
district.  He  also referenced  an  audit  report of  the  Anchorage                                                            
School  District  FY 02  budget [copy  on  file], which  provides  a                                                            
definition of "Community Services" as follows.                                                                                  
     COMMUNITY SERVICES  - Activities provided by a school or school                                                            
     district  for purposes of relating to the community  as a whole                                                            
     or  some  segment of  the  community  not directly  related  to                                                            
     providing  education  for  students.  Specifically,  it  is  an                                                            
     additional  responsibility  delegated  to the  school  district                                                            
     beyond  its primary function  of providing education.  Included                                                            
     are  community recreation  programs,  civic activities,  public                                                            
     libraries, public  radio programs, community welfare activities                                                            
     and care  of children in residential  day schools. Examples  of                                                            
     the  types of expenditures  to include  are salaries,  employee                                                            
     benefits, travel, and supplies.                                                                                            
Mr. Jeans pointed  out that AS 14.17.300(b)  relating to  foundation                                                            
formula funding,  provides that funds  in the public school  account                                                            
"may  be used  only in  aid of public  schools  including  community                                                            
schools activities." He  assured therefore that statute continues to                                                            
"support" community schools programs.                                                                                           
Senator Taylor  withdrew his objection  to the motion to  report the                                                            
bill from Committee.                                                                                                            
JOYCE KITKA, Volunteer,  Alaska Association for Community Education,                                                            
read a statement into the record as follows.                                                                                    
     …I am  a volunteer  with the Alaska  Association for  Community                                                            
     Education,  a volunteer  organization  that promotes  Community                                                            
     Education through  out Alaska. Our membership consists of those                                                            
     individuals  who support life long learning.  Thank you for the                                                            
     opportunity to testify  today about House Bill 165. I know that                                                            
     each  and every  one of you  have heard  from folks  concerning                                                            
     this bill.  Due to the change in schedule, I  know we have lost                                                            
     community members  who wanted to testify before you and ask you                                                            
     not to support HB 165.                                                                                                     
     We  realize  that  times  are  tough and  funding  may  not  be                                                            
     available  at  this  time.  However   passing  this  bill  will                                                            
     eliminate  the possibility  of funding  Community Education  in                                                            
     the future.                                                                                                                
     In front  of you, you have a sheet, which outlines  the history                                                            
     of  funding for  community  schools,  the numbers  of folks  we                                                            
     serve and the astounding  number of volunteers that we recruit,                                                            
     train and supervise.                                                                                                       
     Today's  testimony  is to  ask why there  really  is a need  to                                                            
     eliminate  the  statute  that  says  Community  Schools  is  in                                                            
     existence  in Alaska today. Through this process,  we have only                                                            
     heard  DEED argue  that  the intent  of the  Community  Schools                                                            
     Statute was  to only [facilitate the] start of  the program and                                                            
     [that]  all  Community  Schools  does  is  provide  open  gyms,                                                            
     although  more  recently we  have  been upgraded  to  providing                                                            
     underwater  basket weaving classes.  We have counter[ed]  those                                                            
     statements   with  attorney  opinions  that   differ  with  the                                                            
     interpretation  of the statute,  provided folks with  stacks of                                                            
     programs, flyers,  etc. that indicate that we do much more than                                                            
     the previous mentioned programs.                                                                                           
     We have been  told that there are corporate sponsors  out there                                                            
     that can  fund our programs, while other legislators  swear and                                                            
     laugh  at  these  comments  (by  that  way that  has  been  the                                                            
     response from both  parties). We have been told that we need to                                                            
     raise our  fees, yet we have not had full funding  17 years and                                                            
     are  always asked to  do more so we  have already raised  fees,                                                            
     been  creative  in  establishing  partnerships  throughout  the                                                            
     State and  have exhausted a lot of our choices.  We often serve                                                            
     the  poor,  single  parent  families   and  raising  fees  will                                                            
     eliminate those folks  from our program. We have been told that                                                            
     schools  will pick up  these programs.  We chuckle, as  we know                                                            
     our districts  are facing tremendous  cost and little  money to                                                            
     fund them.  I know my district is starting to  have problems in                                                            
     finding  the  resources  to handle  the wear  and  tear on  our                                                            
     facilities by community usage.                                                                                             
     Our participants  and staff are  upset, and I apologize  if you                                                            
     have  been the recipient  of their frustration.  Over  the past                                                            
     years, Community Educators  have approached the Commissioner of                                                            
     Education and asked  how Community Education could be a part of                                                            
     the  team,  they  have  had  no  response.  Community   Schools                                                            
     programs  across the  State have never  been asked about  their                                                            
     programs,   only   to  have   assumptions   presented  to   the                                                            
     legislature.  The  task of reporting  about  how your money  is                                                            
     being  spent  was  deemed no  needed  by  DEED. So  the  Alaska                                                            
     Association   for  Community   Educations   has  utilized   its                                                            
     volunteers to compile  and provide you with participant numbers                                                            
     and  programs.   They  feel   that  they  have  been   fiscally                                                            
     responsible and are being punished for their efforts.                                                                      
     That  last thing  I want  to touch  on is that  of respect.  As                                                            
     citizens  of Alaska, we recognize and respect  your efforts and                                                            
     why we  may not always agree  [with] your decisions  we respect                                                            
     them.  Unfortunately, many of  our participants and  staff feel                                                            
     that  the respect  has not  been shown  to them.  DEED and  the                                                            
     Governor  have  not  thoroughly  looked  at  the  program  they                                                            
     proposed  eliminating, thus insulating  the years of  hard work                                                            
     and successful  programs. We feel that it has  been a game with                                                            
     DEED staff.  Last Friday evening,  as I exited the House  Floor                                                            
     observing  area, I witnessed a DEED person high-fiving  another                                                            
     person and  exclaiming the victory as HB 165  cleared the House                                                            
     Floor. It  [became] apparent to me it isn't about  what is good                                                            
     for  kids, isn't  about what is  best for  Alaska, it's  a game                                                            
     about who  can win. However, I can tell you,  assure you, there                                                            
     are no winners as  programs will be [lost], students and adults                                                            
     will suffer and buildings will go unused.                                                                                  
     You  have  already  made  the  choice  not  to  fund  Community                                                            
     Schools.  If you think the legislation is bad  then let's spend                                                            
     the  next year  working on  making it better,  eliminating  the                                                            
     program as  outlined by HB 165 does nothing to  making Alaska a                                                            
     better  place to  live or to  utilize an  incredible amount  of                                                            
     resources available in Community Schools programs.                                                                         
Ms. Kitka spoke to the  accounting of community services revenues in                                                            
the Anchorage  School  Districts and  warned that  if State  funding                                                            
were not provided, programs  would be eliminated. She disagreed that                                                            
increasing  user fees  would  offset the  costs,  pointing out  that                                                            
rural residents would be affected disproportionately.                                                                           
Senator  Bunde  agreed  that community  schools  programs  have  the                                                            
support of many people.  He asserted that increased user fees, would                                                            
secure  more  funding  for community  schools  than  a  general  tax                                                            
administered by  the State and distributed to each  school district.                                                            
Ms. Kitka stressed the  issue is the proposal to eliminate the grant                                                            
program  from statute, regardless  of whether  funding is  provided.                                                            
She stated  that if funds  became available  in the future,  statute                                                            
should allow for appropriation to the grant program.                                                                            
Senator  Bunde noted  appropriations  to  other programs  have  been                                                            
suspended,  although  the  programs  have not  been  eliminated.  He                                                            
advocated "continuing  in that mode"  with respect to the  community                                                            
schools grant program.                                                                                                          
Co-Chair Wilken  applauded the efforts  of the witness on  behalf of                                                            
community schools  and noted the bill reflects these  efforts in the                                                            
finding and intent language  on page 1, lines 5 - 12, which reads as                                                            
          FINDINGS AND INTENT. (a) The legislature finds that                                                                   
     community schools                                                                                                          
                (1) are an expression of the philosophy that the                                                                
     school, as the prime  educational institution of the community,                                                            
     is  the most responsive  when  it involves  the people of  that                                                            
     community  in a program designed  to fulfill their educational                                                             
     needs; and                                                                                                                 
                (2) promote the use of school facilities through the                                                            
     use of  buildings and equipment  beyond the normal school  day.                                                            
          (b) It is the intent of this Act to encourage local                                                                   
     school districts to maintain community schools.                                                                            
JULIE  WILD-CURRY,  Alaska  Association  for  Community   Education,                                                            
testified  via  teleconference  from  Fairbanks,  to  encourage  the                                                            
Committee to not  eliminate the enabling statutes  for the community                                                            
schools  grant  program.  She  stressed   the  laws  supporting  the                                                            
community  schools  program  must  remain. She  qualified  that  the                                                            
community schools program  in Anchorage is "strong", but pointed out                                                            
this is  only one of 53  school districts  funded through the  grant                                                            
program.  She furthered  that over  the past  several years,  school                                                            
districts have  been the recipients  of "twenty-first century  grant                                                            
programs"  that have generated  $25 million  to the State;  however,                                                            
the  schools  are  currently  only  receiving   $1.75  million.  She                                                            
cautioned  that  twenty-first  century grants  are  contingent  upon                                                            
active  community  school programs  and  emphasized  the  subsequent                                                            
importance that the State  demonstrates support for the existence of                                                            
these programs.                                                                                                                 
ROGER SHANNON  testified via teleconference  from Kenai,  in support                                                            
of the general accomplishments of the Legislative session.                                                                      
SFC 03 # 99, Side B 09:33 AM                                                                                                    
Mr. Shannon  continued by requesting  the Committee not discontinue                                                             
the existence  of the community schools  program, based on  18 years                                                            
of  "street  level"   experience.  He  warned  that  reductions   to                                                            
community  school programs  would increase  social problems  "on the                                                            
streets"  and would  require additional  public  safety efforts  and                                                            
Senator  Bunde  voiced   objection  to  reporting   this  bill  from                                                            
Committee.  He suggested the grant  program should remain,  although                                                            
funding not appropriated.                                                                                                       
Co-Chair Wilken  ordered the bill HELD in Committee.  [The motion to                                                            
report the bill from Committee was subsequently TABLED.]                                                                        
     HOUSE BILL NO. 171 am                                                                                                      
     "An Act repealing the charter school grant program; and                                                                    
     providing for an effective date."                                                                                          
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Co-Chair Wilken stated  that this bill, sponsored by the House Rules                                                            
Committee, at  the request of the Governor, "eliminates  the charter                                                            
school grant start-up program  of $500 per student beginning in July                                                            
first  of 2004.  HB 171  takes  effect only  if the  State  receives                                                            
federal funding  for charter  school start-up  costs that equals  or                                                            
exceeds the State funding available in FY 03."                                                                                  
EDDY  JEANS,  Manager,   School  Finance  and  Facilities   Section,                                                            
Education  Support  Services,  Department  of  Education  and  Early                                                            
Development,  outlined a  spreadsheet titled,  "Breakdown of  Alaska                                                            
Charter   School  Federal   and  State  Grants"   provided   by  the                                                            
Department.  He pointed  out  the information  showing  the  charter                                                            
schools that  received federal  grants in  addition to State  grants                                                            
and the total  amount of start-up funding received.  He exampled the                                                            
Soldotna and Chinook charter  schools that also received federal and                                                            
State grants.                                                                                                                   
Mr. Jeans pointed  out the effective date delay of  one year in this                                                            
bill is  to accommodate  "the State's  commitment"  to fund  charter                                                            
schools with appropriations  included in the Governor's  proposed FY                                                            
04 operating budget.                                                                                                            
Mr. Jeans  explained  this legislation  proposing  to eliminate  the                                                            
State grant  program is a  result of a State  application to  the US                                                            
Department of Education  to increase the amount of federal grants to                                                            
$495,000  over a  four-year  period.  He described  the application                                                             
process  and the  proposal  to appropriate  $150,000  each year  for                                                            
three  years and  $45,000 in  the fourth  year.  He emphasized  this                                                            
amount  is larger than  the any  of the combined  State and  federal                                                            
grants received  by any other Alaskan charter schools.  He indicated                                                            
the Department  would  reapply for  federal grant  funds after  five                                                            
years. He noted that the  State Board of Education recently approved                                                            
four charter schools listed on the aforementioned handout.                                                                      
Senator  Hoffman asked  the  communities in  which  the new  charter                                                            
schools are located that  would receive the new federal grant funds.                                                            
Mr. Jeans listed  Ketchikan and Mat-Su, and stated  he would provide                                                            
the location of the two other charter schools.                                                                                  
Senator Hoffman asked if Fairbanks was included.                                                                                
Co-Chair Wilken understood it was not.                                                                                          
Mr. Jeans indicated he would provide detailed information.                                                                      
Senator Olson asked about alternatives to charter schools.                                                                      
Mr. Jeans  replied  students have  the option  of attending  regular                                                            
public  schools or  one of the  statewide  correspondence  programs.                                                            
Larger communities,  he noted, also  have alternative high  schools.                                                            
Senator  Olson  asked  the cost  per  student  compared  to  regular                                                            
Mr.  Jeans  responded that  the  amount  depends  on the  number  of                                                            
students enrolled  in a charter school and explained  that under the                                                            
current foundation  formula funding  statute, at least 150  students                                                            
must be  enrolled to  qualify as  a separate  school. Otherwise,  he                                                            
said, the charter  school is funded in conjunction  with the largest                                                            
school within  the same school district. He noted  the Department is                                                            
in the process of evaluating  whether the education is comparable to                                                            
that of regular public schools.                                                                                                 
ROGER SHANNON  testified  via teleconference  from Kenai to  request                                                            
that charter  schools  be allowed  to continue.  He opined that  the                                                            
National  Education Association  (NEA)  has become  involved in  how                                                            
children  are educated, which  has subsequently  resulted in  higher                                                            
costs. He emphasized  he was speaking to the Committee  "from street                                                            
level" as a layperson on the subject.                                                                                           
Senator Taylor  offered a motion to report HB 171  am from Committee                                                            
with individual recommendations and accompanying fiscal note.                                                                   
There was no objection  and HB 171am MOVED from Committee  with zero                                                            
fiscal  note  #1   from  the  Department  of  Education   and  Early                                                            
AT EASE 9:43 AM / 9:43 AM                                                                                                       
     CS FOR HOUSE BILL NO. 174(FIN) am                                                                                          
     "An Act relating to  the state centralized correspondence study                                                            
     program,  to  funding  for  educational   programs  that  occur                                                            
     primarily  outside  school  facilities,  and to  the duties  of                                                            
     school  boards  of  borough   and city   school  districts  and                                                            
     regional  educational  attendance areas;  and providing  for an                                                            
     effective date."                                                                                                           
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Co-Chair  Wilken stated  this  bill, sponsored  by  the House  Rules                                                            
Committee  by request of  the Governor, "repeals  the summer  school                                                            
funding for  Alyeska Central School  (ACS) beginning in the  2003-04                                                            
school  year. In addition,  HB  174 provides  a one-year  transition                                                            
period in which  the functions performed  by Alyeska Central  School                                                            
can  be assumed  by  another  educational  organization,  such as  a                                                            
charter school, or a school district."                                                                                          
EDDY  JEANS,  Manager,   School  Finance  and  Facilities   Section,                                                            
Education  Support  Services,  Department  of  Education  and  Early                                                            
Development  testified this legislation  addresses two issues:  cost                                                            
savings and  policy. He cited the  elimination of the summer  school                                                            
program  would  save  the  State  $1.2  million.   He  listed  other                                                            
potential cost  savings, including over $700,000 for  lease of space                                                            
in the Goldbelt Building  in Juneau, occupied by the Alyeska Central                                                            
School and paid by the Department of Administration.                                                                            
Mr. Jeans  gave a history  of the correspondence  school, which  was                                                            
established  in 1939.  At  this time,  he informed  that  municipal-                                                            
operated  schools addressed  education  in areas  organized under  a                                                            
local  government, and  the State  operated schools  in unorganized                                                             
areas. He  said the State  continued to operate  schools until  1977                                                            
and the  establishment of  the Regional  Education Attendance  Areas                                                            
(REAA). Approximately seven  years ago, he continued, the Department                                                            
allowed  school  districts   to  operate  statewide  correspondence                                                             
programs,  a  decision  supported  by the  Legislature  through  the                                                            
adoption of SB  36, in which the Legislature specified  that funding                                                            
would be  available for these  efforts. He  noted that currently  12                                                            
such programs, including ACS, operate in Alaska.                                                                                
Mr.  Jeans  commented  that  the  majority  of  students   currently                                                            
enrolled  in ACS  would  attend other  correspondence  schools  upon                                                            
elimination of  ACS. He shared that the Department  has learned that                                                            
many  of  the  other  programs  would  develop  or  modify  existing                                                            
programs  to assist  those  families  currently  served  by ACS.  He                                                            
asserted  that of  the  650 students  enrolled  in the  ACS  regular                                                            
program,  approximately  45 do  not have  daily access  to a  public                                                            
school in their  community. He informed that this  legislation would                                                            
require  other correspondence   programs to  operate  under an  open                                                            
enrollment  policy,  noting  that  currently  some  have  instituted                                                            
"artificial caps" on the number of students allowed to enroll.                                                                  
Mr. Jeans next  spoke to the issue  of accreditation. He  acquiesced                                                            
that ACS is  the only accredited statewide  correspondence  program,                                                            
although  four others  have  applied for  accreditation  and are  in                                                            
"accredited  candidate"  status  for three  years.  He listed  these                                                            
schools  as the PACE  charter school  in Craig,  Delta-Greely  Cyber                                                            
School, Raven  Charter School in the Yukon-Koyukuk  school district,                                                            
and the IDEA  Correspondence program  in Galena. While in  candidate                                                            
status, he assured, any  credits awarded to a student are treated as                                                            
fully  accredited  and  must be  accepted  as  such by  a  receiving                                                            
Senator   Taylor   asked  why   no   comparison  is   made   between                                                            
accreditation   and  competency  levels.  He  asked   why  the  many                                                            
accredited schools in Alaska  continue to graduate about "37 percent                                                            
of our student population functionally illiterate."                                                                             
Mr. Jeans understood that  the accreditation process requires school                                                            
districts to meet  certain standards in assigning  a grade or credit                                                            
to a student,  which must subsequently  must be accepted  by another                                                            
accredited school.  He was unable to respond to the  relationship to                                                            
student competency.                                                                                                             
Senator Taylor commented  that students enrolled in a correspondence                                                            
program  score  higher  in  general  competency   tests  than  those                                                            
enrolled in regular public schools.                                                                                             
Mr. Jeans surmised  this would be  better understood as the  "school                                                            
level designation  system" imposed  at the State and federal  level,                                                            
is implemented.  He indicated a disparity in the number  of students                                                            
participating in assessments.                                                                                                   
Senator  Taylor opined  that his  "life experience"  indicates  that                                                            
these students  have a "very high  level of competency" obtained  in                                                            
home schools  and correspondence  school programs.  He asserted  the                                                            
issue is how funds would be better spent.                                                                                       
Senator  Bunde attributed  the  higher competency  to  the level  of                                                            
parental involvement.  He stated that students of  the Galena school                                                            
district passed at a higher  competency rate last year than students                                                            
enrolled in the district's  IDEA correspondence program. He asked if                                                            
private  schools  in Alaska  are  all accredited  and  through  what                                                            
accreditation organization.                                                                                                     
Mr. Jeans  replied that those  that are accredited  are through  the                                                            
Northwest Association of Schools Colleges and Universities.                                                                     
Senator Bunde  asked if the witness was aware of any  student denied                                                            
admission to a college for lack of accreditation.                                                                               
Mr.  Jeans  was not  aware  of  any and  noted  that  colleges  have                                                            
alternative  assessment  procedures for  students  educated in  non-                                                            
accredited institutions.                                                                                                        
Senator Bunde  stated that other than  some junior colleges  and the                                                            
University  of Alaska, most colleges  require some demonstration  of                                                            
Senator Hoffman  asked if the $700,000 lease expense  is included in                                                            
the estimated $1.2 million savings of this legislation.                                                                         
Mr. Jeans responded that  the $700,000 lease expense is not included                                                            
as  a savings  in any  fiscal  note,  as he  was uncertain  how  the                                                            
Department  of Administration  would proceed  in either terminating                                                             
the lease or locating other State programs in the space.                                                                        
Senator  Hoffman  next  indicated  the  fiscal  note  dated  4/23/03                                                            
references  a savings  of $4,300,000  and  asked if  this amount  is                                                            
Mr. Jeans explained  that the ACS operations are funded  through the                                                            
foundation  funding  formula  and  because  the  students  would  be                                                            
expected  to enroll  elsewhere in  the State school  system and  the                                                            
funds would be  allocated to another district, the  fiscal note does                                                            
not report a savings from the discontinuance of ACS operations.                                                                 
Senator Hoffman suggested  that if the only savings realized by this                                                            
legislation  is  from  the elimination   of the  ACS  summer  school                                                            
program, the regular ACS school program could continue.                                                                         
Mr. Jeans affirmed, but  stressed that the Administration decided to                                                            
"get  of out of  that business  and  out of competition"  since  the                                                            
State has allowed local districts to operate statewide programs.                                                                
Senator Hoffman  asserted that competition creates  better services.                                                            
Mr.  Jeans  reiterated   that  11  other  statewide  correspondence                                                             
programs  currently  exist.  He  stated  that  none  of  the  school                                                            
districts  operating these  programs developed  programs similar  to                                                            
ACS because  of existence of ACS.  He shared that several  districts                                                            
have  indicated  they  would  develop programs  similar  to  ACS  to                                                            
attract former ACS students.                                                                                                    
Senator Hoffman  expressed support  for continuing the competition,                                                             
given that the costs would not change.                                                                                          
Senator  Bunde   noted  school  districts   that  are  experiencing                                                             
decreasing  enrollment and suggested  those districts could  attract                                                            
students  residing  within the  district  who are  currently  taking                                                            
Mr. Jeans agreed this was a "fair assumption".                                                                                  
Senator  Hoffman  pointed  out this  would  be assuming  the  school                                                            
districts  in question  have  adequate  space, stressing  that  many                                                            
school buildings  are overcrowded.  He reminded  this was  addressed                                                            
the prior legislative session  with the passage of bonds to fund new                                                            
school  construction,  which  would  not be  completed  for  several                                                            
years. He  stated that  eliminating a correspondence  program  would                                                            
place a burden on the regular public school buildings.                                                                          
MIKE JEFFERY  testified via  teleconference  from Barrow and  agreed                                                            
with Senator  Hoffman and  Senator Bunde's  comments to the  need to                                                            
continue  the  Alyeska  program.  He  told  of  his  three  children                                                            
enrolled in the  program, one of who would graduate  this spring. He                                                            
spoke of  the "track record"  and the significance  to families.  He                                                            
stressed  the  ACS provides  an  alternative  education  program  in                                                            
accordance  with the  federal  "No Child  Left Behind"  program.  He                                                            
pointed out the  ACS employs qualified teachers in  many fields that                                                            
many  smaller   schools  are  unable   to  obtain.  He  agreed   the                                                            
discontinuance  of the summer program  would save money,  but argued                                                            
this  could  be accomplished  without  eliminating  the  entire  ACS                                                            
JEANNE  FOY,  Teacher,  Alyeska  Central  School,  representing  the                                                            
Alyeska  Central School  Teachers Association,  testified in  Juneau                                                            
that she has heard reference  to lease payments of both $300,000 and                                                            
$700,000. She  suggested an alternative location with  a lower lease                                                            
cost could be investigated.  She read a statement into the record as                                                            
     The Administration has stated that closing the school is a                                                                 
     policy decision. It just doesn't want the State to run a                                                                   
     correspondence program  anymore. The Department representatives                                                            
     have  also   testified  that  the  Department  fully   supports                                                            
     competition   among  school   districts  for  these   statewide                                                            
     distance delivery  programs. Although, I would mention that the                                                            
     fact  that  Galena  has  quite  a  large  home  school  support                                                            
     program,  did not prevent  the other ten  or so districts  from                                                            
     offering  their own home school support programs.  But yet, for                                                            
     them  to offer  a program  like ours,  we must  be eliminated,                                                             
      which creates an interesting definition of competition.                                                                   
     The  yearlong extension  of the committee  substitute  for this                                                            
     bill,  would  give  the  school  the  ability  to  explore  the                                                            
     possibilities  of  becoming  a charter  school  sponsored by  a                                                            
     school  district.  If  that happens,  that  would  fulfill  the                                                            
     Administration's   goals  of not  wanting  to  operate  Alyeska                                                            
     Central School anymore  and would also continue to give parents                                                            
     another educational choice.                                                                                                
     Parents have been  very vocal about why they value ACS. To have                                                            
     a program  requires a certain economy of scale,  which requires                                                            
     that  the school remain  intact. The No  Child Left Behind  Act                                                            
     poses  a challenge to  the State because  small schools  cannot                                                            
     have  teachers  certified   in  every  subject  they  teach.  A                                                            
     centralized  correspondence  program makes  sense because  then                                                            
     the school has enough  resources to have certified teachers for                                                            
     every subject.                                                                                                             
     I  therefore  urge  the  Committee  to  support  the  committee                                                            
     substitute for HB 174.                                                                                                     
Co-Chair  Wilken asked  the number  of students  who would  continue                                                            
after July 1, 2003.                                                                                                             
Ms. Foy  answered that  "quite a  few" students  would finish  their                                                            
course work  later in the  summer. She relayed  discussions  held by                                                            
the ACS  parents' organization  in identifying  the characteristics                                                             
the charter school  should have. She stated that the  first priority                                                            
was a year  round school, due to the  importance of the flexibility                                                             
this would  provide  particularly  to rural students.  She  exampled                                                            
trapping, fishing  seasons and road inaccessibility  as some reasons                                                            
why a standard nine-month program is unfeasible.                                                                                
Senator  Bunde understood  the majority  of ACS  students reside  in                                                            
urban areas. He asked the number of "truly rural" students.                                                                     
Ms. Foy estimated  45 to 50 of 800 full-time students.  She stressed                                                            
that a regular public school  must be of a significant size to offer                                                            
the same caliber of "rigorous" courses to these rural students.                                                                 
Senator B. Stevens asked the student to teacher ratio.                                                                          
Ms. Foy listed 80 students per one teacher.                                                                                     
CECILIA  MILLER,  Alyeska  Central  School  Education  Association,                                                             
testified   in  Juneau  that  the   teacher  to  student   ratio  is                                                            
approximately  one teacher to every 60 elementary  students, and one                                                            
teacher per subject for  150 to 200 students for secondary students.                                                            
She characterized  the ratio  at the secondary  level as similar  to                                                            
regular public schools.                                                                                                         
Senator  B.  Stevens  asked  if  correspondence  is  done  over  the                                                            
Internet and the occurrence of communication with every student.                                                                
Ms. Miller  responded  she teaches  both on-line  and "paper-based"                                                             
courses and that  the programs are such that teachers  evaluate each                                                            
student's work about every  three weeks. She qualified that students                                                            
call  for   guidance,  noting  that   some  students  require   more                                                            
Ms. Miller  expressed support  for the committee  substitute,  as an                                                            
additional year is critical  to allow for the program to transition.                                                            
She stressed  the importance of the  program to families  and listed                                                            
reasons for choosing ACS:  the program is accredited; the curriculum                                                            
meets  the   standards  established   for  the  Alaskan   graduation                                                            
competency  examination;  and  the  program is  mediated  by  highly                                                            
qualified teachers.                                                                                                             
Ms. Miller remarked  that accreditation is important  for acceptance                                                            
into a selective  college. She stated  that students eliminated  for                                                            
lack  of  accreditation  is  not  disclosed   and  that  during  the                                                            
admissions  process "it  is easier to  get flagged  out than  to get                                                            
flagged in"  to a selective  college. She  also pointed out  a major                                                            
component  of accreditation  is  to  assist schools  to continually                                                             
Ms. Miller  shared that many parents  value the choice of  different                                                            
education  programs.  She spoke  to  the differences  between  "home                                                            
support" and  correspondence programs,  primarily that teachers  are                                                            
involved in the correspondence programs.                                                                                        
Ms. Miller  noted earlier  claims that the  ACS curriculum  would be                                                            
made available  to other  school districts.  She informed that  this                                                            
was done previously,  but discontinued  due to legal, integrity  and                                                            
educational reasons. She  explained the curriculum is copywrited and                                                            
the Department  is  researching the  legal implications.   She  also                                                            
emphasized  the necessity to ensure  that the students are  actually                                                            
performing  the work and  that a teacher  is evaluating a  student's                                                            
progress.  She  gave an  example  of a  test  designed  to be  taken                                                            
without the use of a calculator  and the compromise that would occur                                                            
if a student  used a calculator.  She then  stressed the value  that                                                            
parents place  on the presence of a qualified teacher  knowledgeable                                                            
about the curriculum.                                                                                                           
Senator Bunde asked if  ACS paid for the recent travel of parents of                                                            
ACS students to Juneau.                                                                                                         
Ms. Miller affirmed  and explained those parents are  members of the                                                            
advisory committee  and gather annually  to assist in making  policy                                                            
and program changes  to better serve the students.  She assured that                                                            
while  testifying before  the Legislature,  these  parents were  not                                                            
compensated by ACS.                                                                                                             
Senator  Hoffman asked  if the  Association's  preference is  status                                                            
Ms. Miller responded  this committee substitute represents  the best                                                            
KEVIN  SWEENEY,  Special  Assistant,  Office  of  the Commissioner,                                                             
Department of Education  and Early Development, spoke to the reasons                                                            
behind intent  to eliminate  Alyeska Central  School. He  understood                                                            
that Alaskan  voters want  a "scaled down  government". Although  at                                                            
one time, ACS  offered the only statewide  correspondence  education                                                            
program,  he pointed  out  that  choices  in education  have  "grown                                                            
tremendously"  in the past ten years, exampling charter  schools and                                                            
the expected  addition of  another 20 to 25  charter schools  in the                                                            
State within five years.  He furthered that as well as the statewide                                                            
correspondence  programs operated  by some  school districts  others                                                            
also  offer district-wide  correspondence  programs.  Therefore,  he                                                            
surmised,  many options are  available and  that the elimination  of                                                            
ACS  would  allow districts  to  "take  over  the education  of  our                                                            
Mr. Sweeney  corrected that the annual  lease for ACS facilities  is                                                            
Senator  Hoffman  asked if  the Administration's  position  is  that                                                            
Alaskans' intentions for  scaled down government includes education.                                                            
Mr.  Sweeney  remarked  that no  one  wants to  reduce  funding  for                                                            
education;  however,  he opined  that  some programs  could  operate                                                            
without "any sever  interruption to people" and ACS  is one of those                                                            
programs. He disputed  that the State is the only  agency that could                                                            
successfully   operate  a  statewide   correspondence  program.   He                                                            
expressed confidence in the school districts to accomplish this.                                                                
After hearing  no objection, Co-Chair Wilken ordered  CS HB 174(FIN)                                                            
am MOVED from  Committee with fiscal  note #1: ($1,170,300)  for the                                                            
Foundation  Program component;  and fiscal  note #2: $4,339,000  for                                                            
the Alyeska Central School  component. [No motion was made to report                                                            
the bill from Committee.]                                                                                                       
     CS FOR HOUSE BILL NO. 210(RES)(efd fld S)                                                                                  
     "An Act relating to the Chitina dip net fishery."                                                                          
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Co-Chair Wilken  stated this bill,  "eliminates the $25 fee  for the                                                            
Chitina  dip net  fishing  permit  and requires  State  agencies  to                                                            
publicize  and mark  the  State land  that  provides  access to  the                                                            
RYNNIEVA MOSS, Staff to  Representative John Coghill, Jr., presented                                                            
the bill.                                                                                                                       
SFC 03 # 100, Side A 10:21 AM                                                                                                   
Ms. Moss continued that  this legislation addresses an equity issue,                                                            
explaining that  the Chitina dip net fishery is the  only fishery in                                                            
the State that assesses  a fee to participants. She noted the intent                                                            
of  the $25  fee  was  valid,  as it  compensated  the  two  private                                                            
property owners upon whose land was trespassed.                                                                                 
Ms. Moss reminded that  through the efforts of former Representative                                                            
John Davies and  former Senator Pete Kelly, funds  were appropriated                                                            
to survey the access to  the Chitina fishery. With the completion of                                                            
the survey,  she shared  that it  has been determined  that  over 60                                                            
percent  of access  to the  river is  public access  on State-owned                                                             
Co-Chair  Wilken  directed  the witness  to  identify  the areas  in                                                            
question on a map she possessed [copy on file].                                                                                 
Senator Bunde  asked if the participants would still  be required to                                                            
hold a sport-fishing license.                                                                                                   
Ms.  Moss replied  that  licenses  were not  required  in the  past,                                                            
although the Alaska Board  of Fisheries determined the fishery to be                                                            
personal   use   rather  than   subsistence,   and   licenses   were                                                            
subsequently required.                                                                                                          
Ms. Moss detailed the map  showing a section of the Copper River and                                                            
the areas of the dip net  fishery, in conjunction with the land that                                                            
is privately or publicly owned.                                                                                                 
Ms. Moss  clarified that  although the fee  would not be imposed,  a                                                            
permit would still  be necessary to participate in  the fishery. She                                                            
stated  this  is  to ensure  that  all  who  participate  receive  a                                                            
brochure  indicating   public  assess.   She  informed  that   funds                                                            
remaining from  the survey project would be utilized  to produce the                                                            
brochure  as well as  a "large  public sign"  indicating the  public                                                            
assess to the river.                                                                                                            
Ms. Moss qualified  that conflicts would continue,  as occur in many                                                            
other areas  of the  State where  people might  trespass on  private                                                            
land. She admitted  the local residents would be impacted;  however,                                                            
they  should  "take  advantage"  of  the  situation   and  undertake                                                            
economic  development.  She suggested  boat ramps,  campgrounds  and                                                            
other establishments to accommodate the fishers.                                                                                
Senator Taylor  asked if this legislation is identical  to a bill he                                                            
sponsored the previous legislative session.                                                                                     
Ms. Moss affirmed and reminded  that the original legislation passed                                                            
the  Senate but  did  not complete  the  House  of Representatives'                                                             
process before adjournment.                                                                                                     
Ms. Moss  reminded the  original legislation  contained a  provision                                                            
that would have retained  the $25 fee for one year and that Co-Chair                                                            
Wilken  testified,  "the  intent  of  the  fishery  is  to  have  an                                                            
accessible, productive  State fishery". She recalled Co-Chair Wilken                                                            
supported  the collection of  fees for one  year with the  knowledge                                                            
that an agreement would  be reached between the State and the Native                                                            
corporations that owned portions of the land.                                                                                   
Senator  Taylor asked  about  the issue  of adverse  possession.  He                                                            
understood  that   over  time  "prescriptive  easements"   could  be                                                            
acquired  to  allow  public  assess,   due  to  the  utilization  of                                                            
privately owned  land for several  years. He spoke to other  pending                                                            
legislation  that would eliminate  "any opportunity  to gain  any of                                                            
those access  rights across  that private  land". He cautioned  that                                                            
this  private  land would  never  become  accessible to  the  public                                                            
except through a licensing fee if the other legislation passes.                                                                 
Senator Hoffman asked the  ownership of the land nearest the parking                                                            
area indicated on the map.                                                                                                      
Ms. Moss responded  that Chitina and  Ahtna Native corporations  own                                                            
most of the private land in the area.                                                                                           
Senator Hoffman  asked if most participants in this  fishery utilize                                                            
this parking area.                                                                                                              
Ms. Moss replied  that "pavilion area" is used for  parking, as well                                                            
as a private campground at O'Brien Creek.                                                                                       
Senator Hoffman asked how the fees were utilized.                                                                               
Ms. Moss detailed  that $18 of the  fee [likely $8] was paid  to the                                                            
Native corporations  to compensate for trespassing;  $12 was used to                                                            
maintain portable  toilets and dumpsters;  and $2 remained  with the                                                            
Department of Fish and Game to administer the fee program.                                                                      
JESSE  VANDERZANDEN,  Executive Director,  Alaska  Outdoor  Council,                                                            
testified this bill is  one of the top priorities of the Council for                                                            
the  current  legislative  session.  He told  of  the approximately                                                             
12,000  collective  membership  of  hunters,  fishers  and  trappers                                                            
represented by  the Council, many of whom, he stated  participate in                                                            
the  Chitina dip  net  fishery. He  furthered  that  the Council  is                                                            
comprised of approximately  50 outdoor activities-related clubs, one                                                            
being the Chitina Dipnetters Association.                                                                                       
Mr. VanderZanden  characterized  this legislation  as a "well-timed                                                             
housekeeping proposal".  He pointed out that the survey of the lands                                                            
around  the Chitina  River was  completed  in the  Summer 2001,  and                                                            
conclusively  showed that at least  60 percent of the area  utilized                                                            
by the  dip netters  is public  land.  In addition,  he said  public                                                            
corridors  were identified  that would allow  dip netters access  to                                                            
fishing sites  without crossing private land. He remarked  that as a                                                            
result of this  recently identified  public access, the initial  $25                                                            
fee  instituted  by the  Legislature  in  the  year 2000  to  secure                                                            
trespass rights  across the private  lands, is no longer  necessary.                                                            
Mr. VanderZanden  read portions of a letter from then  Governor Tony                                                            
Knowles to the  Chitina Native Corporation dated April  25, 2002, as                                                            
     …Last summer,  DOT&PF [Department of Transportation  and Public                                                            
     Facilities]  staff completed this legislatively  funded survey,                                                            
     which  held  that at  least 60  percent  of the  length of  the                                                            
     right-of-way  between  O'Brien Creek  and  Haley Creek  affords                                                            
     legal  public access to the Copper  River… The results  of this                                                            
     survey places  the State in the awkward position  of collecting                                                            
     fees from  a personal users in the Chitina Subsistence  Fishery                                                            
     to pay  for access that is not  needed in order to participate                                                             
     in  the  fishery…  ADF&G  [Department  of  Fish  and  Game]  is                                                            
     considering a proposal that would repeal the access fee.                                                                   
Mr. VanderZanden next read  from an August 25, 2002 letter from then                                                            
Department of  Natural Resources Commissioner Pat  Pourchot and then                                                            
Department of Fish and  Game Commissioner Frank Rue addressed to the                                                            
Ahtna Native Corporation as follows.                                                                                            
     …The  current   year-to-year  compensation   process  has  been                                                            
     difficult  for  all  parties  and given  information  from  the                                                            
     survey  and other  developments,  we  do not  believe that  the                                                            
     current arrangement  is sustainable… A bill seeking a repeal of                                                            
     the  fee passed  the Senate  18 to  one and  would likely  have                                                            
     passed  the House as  well if it had  not been so close  to the                                                            
     end of the session.                                                                                                        
Mr.   VanderZanden   furthered    that   this   bill   addresses   a                                                            
public/private  lands  issue  that  would resolve  issues  for  both                                                            
private landowners  and fishers.  He pointed  out that public  lands                                                            
have already  been posted in the Chitina  corridor, specifically  to                                                            
Haley Creek.  He understood  that adequate  funds remained  from the                                                            
survey   project  to  produce   and  widely   distribute   brochures                                                            
delineating public and private lands.                                                                                           
Mr. VanderZanden  surmised  that by delineating  these public  lands                                                            
would reduce  the impact  to private lands  caused by trespass,  and                                                            
also allow  private  landowners to  charge a fee  for access  across                                                            
their  land. He  noted this  currently  occurs in  nearby  fisheries                                                            
under similar  circumstances. He asserted  that because private  and                                                            
public  lands  had not  been  identified  and  posted in  the  past,                                                            
fishers  were  unable to  discern  trespass  on private  land,  thus                                                            
necessitating  the  trespass fee  to allow  access  for all  fishery                                                            
participants.  He remarked  that  proper identification  of  private                                                            
land  would  allow   landowners  to  prosecuting  for   knowing  and                                                            
egregious trespass, were it to occur.                                                                                           
Mr. VanderZanden stated  this bill would "get the Department of Fish                                                            
and Game out of  the waste and trash removal business."  He asserted                                                            
that the time  spent on contracting for these services  was valuable                                                            
and  could  have better  been  spent  on managing  the  fishery.  He                                                            
admitted  this bill  does not address  the matter  of funding  these                                                            
services,  however,  he  stressed  it should  be  discussed  in  the                                                            
"regulatory  arena" rather than the  "statutory arena," as  no other                                                            
fishery or access matter contains statutorily mandated fee.                                                                     
BYRON HALEY,  President, Chitina Dipnetters  Association,  testified                                                            
via teleconference  from  Fairbanks,  in support  of passage of  the                                                            
bill. He stressed there  is no need to charge one group of people to                                                            
use  public  lands  to  access  the  Copper  River.  He  noted  that                                                            
participants  must purchase a sport-fishing  license. He  reiterated                                                            
earlier testimony  regarding the survey's findings  of 60 percent of                                                            
the land in  the fishery area is publicly  owned. He gave  a history                                                            
of the fee,  which initially was ten  dollars but was raised  at the                                                            
request of the affected Native Corporations.                                                                                    
PAUL  HOLLAND,   Board  Member,  Chitina   Dipnetters  Association,                                                             
testified  on his own behalf  via teleconference  from Fairbanks  in                                                            
support  of the legislation.  He  described the  seven-mile area  in                                                            
which the  fishery occurs,  referencing the  aforementioned  map. He                                                            
surmised  that approximately  90 percent of  the dip netters  access                                                            
the fishery through public land.                                                                                                
MARK  HEM,  Owner, Chitina  One-Stop  grocery  store,  Hem  Charters                                                            
guided dip net fishing,  a café, and private property in the Chitina                                                            
area, and Vice President,  Chitina Dipnetters Association, testified                                                            
via teleconference  from Fairbanks about his business  operations in                                                            
the Chitna  area. He shared  that he has had  his land surveyed  and                                                            
developed to  lessen trespass on his  property. He stressed  that if                                                            
the State continues collecting  fees from a user group for potential                                                            
trespass on private property,  he should receive payment as well. He                                                            
opined the fee  collection sets a "bad precedent"  for the State and                                                            
he urged passage of this bill.                                                                                                  
Senator Hoffman  noted a portion of  the fees was expended  on waste                                                            
removal and  similar services. He  asked as a resident of  the area,                                                            
if the witness  was concerned with  the trash of 8,000 visitors  not                                                            
being removed.                                                                                                                  
Mr. Hem  was concerned  but  emphasized  that the  matter should  be                                                            
addressed   differently.   He  characterized   the  fee   collection                                                            
primarily addresses trespass on private property.                                                                               
Senator Hoffman commented  that the $40,000 expense of waste removal                                                            
has not been otherwise addressed.                                                                                               
Ms. Moss  injected that  the House Finance  Committee discussed  the                                                            
expense of  waste removal and that  the co-chairs of that  Committee                                                            
committed to finding  a solution.  She stated that  waste removal is                                                            
undertaken in  relation to other fisheries and that  the Chitina dip                                                            
net fishery should be treated equally.                                                                                          
Senator Taylor clarified  that the Alaska Board of Fisheries changed                                                            
the definition  of the fishery from subsistence to  sport and that a                                                            
sport fishing license would be required to participate.                                                                         
Ms. Moss corrected  the classification was changed  from subsistence                                                            
to personal use.                                                                                                                
Senator Taylor  surmised that subsistence  is personal use  and that                                                            
if  the  fishery  was  classified  as  subsistence  no  resident  of                                                            
Fairbanks could participate.                                                                                                    
Ms. Moss  was unfamiliar  with the  details of  the Alaska Board  of                                                            
Fisheries decisions.                                                                                                            
Senator Taylor  offered a motion to  report the bill from  Committee                                                            
with individual recommendations and accompanying fiscal notes.                                                                  
Without objection  CS HB  210 (RES) MOVED  from Committee with  zero                                                            
fiscal  note  #1  from  the  Department  of  Natural  Resources  and                                                            
($172,800) fiscal note #3 from the Department of Fish and Game.                                                                 
     HOUSE BILL NO. 225                                                                                                         
     "An  Act  relating to  certain  civil  actions brought  by  the                                                            
     attorney   general  under  monopoly  and  restraint   of  trade                                                            
     statutes;  relating to the award of damages in  actions brought                                                            
     under those statutes; and providing for an effective date."                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Senator Taylor  offered a motion to  report the bill from  Committee                                                            
with individual recommendations and accompanying fiscal note.                                                                   
Co-Chair  Wilken explained  this bill sponsored  by the House  Rules                                                            
Committee as  the request of the Governor,  "updates Alaska's  anti-                                                            
trust statutes  in response to a recent United States  Supreme Court                                                            
precedent.  This  legislation will  allow  the Attorney  General  to                                                            
bring an action on behalf  of consumers for violation of the State's                                                            
anti-trust laws and to recover damages."                                                                                        
DAVID MARQUEZ,  Assistant Attorney  General, Office of the  Attorney                                                            
General, Department of Law deferred to Mr. Sniffen.                                                                             
ED SNIFFEN,  Assistant  Attorney  General, Fair  Business  Practices                                                            
Section,   Civil  Division,   Department  of   Law,  testified   via                                                            
teleconference  from an off net location  that this bill  allows the                                                            
Attorney  General  to  represent  consumers   in actions   involving                                                            
indirect purchases.  He referenced  a flow chart distributed  by the                                                            
Department of  Law [copy on file, that details a situation  in which                                                            
a  conspiracy  or other  illegal  anti-trust  behavior  might  occur                                                            
between two  companies resulting in  an artificially inflated  price                                                            
passed along  through an  importer, a distributor,  a wholesaler,  a                                                            
retailer  and ultimately  to  consumers. He  informed  that in  this                                                            
instance, the  consumer is considered an indirect  purchaser because                                                            
the product was  not purchased directly from the "anti-trust  wrong-                                                            
Mr. Sniffen  pointed out  that under current  State anti-trust  law,                                                            
the consumer  has no ability to bring  an anti-trust action  in this                                                            
situation  and  therefore  has no  remedy  to recover.  Instead,  he                                                            
stated the  consumer must  rely on entities  "further up the  chain"                                                            
i.e.  importer,  distributor,   wholesaler  or  retailer,  to  bring                                                            
Mr. Sniffen  assured  this matter  is not a  "theoretical  exercise"                                                            
stressing  that this  occurs  in Alaska  at  a cost  of hundreds  of                                                            
thousands  of  dollars.  He  told  of  one  case  involving  vitamin                                                            
manufacturers  conspiring to  keep the cost  of their products  high                                                            
that  was   eventually  settled  as   a  result  of  a  multi-state                                                             
litigation.  He   informed  that  States  with  similar   anti-trust                                                            
statutes to this  legislation were able to recover  approximately $1                                                            
million each  in fines and  penalties and  that states without  such                                                            
statutes  received nothing,  although Alaska  was able to  negotiate                                                            
with the settlement committee  to receive approximately $100,000. He                                                            
pointed out that Alaska,  as a participant in this litigation, could                                                            
have collected  an additional  $900,000 if  this legislation  was in                                                            
place. He furthered  that other situations  exist involving  women's                                                            
shoes and pharmaceuticals;  however  the State has not taken  action                                                            
due to lack of authority.                                                                                                       
Mr.  Sniffen  told of  the  US Supreme  Court  case  Illinois  Brick                                                          
Company versus Illinois, which established the current rules.                                                                 
Senator  Taylor commented  it was "fascinating"  that the  Committee                                                            
would move a bill relating  to collecting damages. He did not object                                                            
to the passage of this bill from Committee.                                                                                     
Without  objection HB  225 MOVED  from Committee  with accompanying                                                             
fiscal note  #1 in an indeterminate  amount  from the Department  of                                                            
     CS FOR HOUSE BILL NO. 154(FIN)                                                                                             
     "An Act relating to advancement in public schools of children                                                              
     under school age; and providing for an effective date for the                                                              
     Act of July 1, 2004."                                                                                                      
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Co-Chair  Wilken   stated  this  bill  "upgrades  school   students,                                                            
sponsored  by  the  [House]  Rules   Committee  at  request  of  the                                                            
Governor. House  Bill 154 removes  the school districts'  ability to                                                            
offer  early entry  to  four-year-olds  as  a standard  practice  to                                                            
access  the foundation  formula and  provide State  funds to  school                                                            
programs.  Currently districts  can enroll  four-year-olds and  then                                                            
enroll them  as kindergarten students  in the next school  year. The                                                            
result  to the State  is an additional  per pupil  funding per  year                                                            
equating to approximately $3.9 million."                                                                                        
EDDY JEANS,  School Finance Manager,  School Finance and  Facilities                                                            
Section,  Education Support  Services, Department  of Education  and                                                            
Early Development,  clarified the intent of this legislation  is not                                                            
to prohibit four-year-olds  who are ready to begin their educational                                                            
career, from entering kindergarten  early. Rather, he emphasized the                                                            
intent is to eliminate  school districts' ability to offer two years                                                            
of kindergarten and receive State foundation funding to do so.                                                                  
Mr. Jeans interpreted  the statues  "envisioned" a student  enrolled                                                            
in  the State  public  school  system for  approximately  13  years;                                                            
kindergarten  through 12   grade. However,  upon collecting  student                                                            
level data  from school districts,  he reported that some  districts                                                            
are  enrolling  all  four-year-olds  into  a two-year  kindergarten                                                             
program.  He stated this  is occurring under  AS 14.03.080  Right to                                                            
Attend School., which he cited as followed.                                                                                     
          (c) A child under school age may be admitted to the                                                                   
     public  school in the school  district in which the  child is a                                                            
     resident  at the discretion of the governing  body if the child                                                            
     meets  the minimum  standards  prescribed by  the school  board                                                            
     evidencing that the  child has a mental, physical and emotional                                                            
     capacity to perform  satisfactorily for the educational program                                                            
     being offered.                                                                                                             
Mr. Jeans pointed  out that "the educational program  being offered"                                                            
is  "a pretty  broad  term".  He assured  this  legislation  "brings                                                            
clarity  to  that   section  of  statute"  by  requiring   that  the                                                            
districts'   educational  program   must  prescribe  that   underage                                                            
students  advance through  the  curriculum  and grade  level by  the                                                            
following   fiscal  year.   He  explained   that  this  legislation                                                             
essentially  "puts  all school  districts  on notice  that the  real                                                            
intent here  is 13 years of funding  through the foundation  program                                                            
not 14."                                                                                                                        
Senator  Hoffman  asked if  all of  the  communities  where this  is                                                            
occurring have access to a Head Start program.                                                                                  
Mr. Jeans replied that some do, although others do not.                                                                         
Senator  Hoffman  characterized   this  as  a  parody  issue:  those                                                            
communities with access  to Head Start offer an unfair advantage for                                                            
their students entering  school if the communities without access to                                                            
Head Start are prohibited from a two-year kindergarten program.                                                                 
Senator Bunde  asked for assurance  that this legislation  would not                                                            
prevent districts  from implementing age requirements;  specifically                                                            
that students  must reach the age  of five by a certain date  before                                                            
eligible to enroll in kindergarten.                                                                                             
Mr. Jeans responded  that the age requirement to enter  kindergarten                                                            
is established  elsewhere in statute and provides  that a child must                                                            
be five  years old by August  15 of that  school year. He  clarified                                                            
this   legislation   would   not   prohibit   the   evaluation   and                                                            
determination  by a school district that a child is  truly ready for                                                            
kindergarten,  with the expectation that the child  would advance to                                                            
first grade in  the subsequent school year, and allowing  that child                                                            
to enroll in kindergarten.                                                                                                      
Senator Bunde  asked if the  current practice  of districts  is that                                                            
this determination  is made without the honest expectation  that the                                                            
four-year old child would advance to first grade.                                                                               
Co-Chair  Wilken  suggested  this  was  an unfair  question  to  the                                                            
witness, as  he could not be expected  to know the intent  of school                                                            
Senator Taylor  expressed concern that the language  is not specific                                                            
enough.  He  asked  if  every  underage  student  enrolled  must  be                                                            
advanced  to first grade  the next year regardless  of whether  that                                                            
child is ready.                                                                                                                 
Mr. Jeans assured  that the Department does not intend  to apply the                                                            
stipulations  "so black  and white".  He understood  that  districts                                                            
would determine  some children  have the ability  to advance  to the                                                            
next grade level  the following year and would enroll  them, only to                                                            
later learn these  children are not ready. He pointed  out that some                                                            
five year olds  enter kindergarten and are not ready  to advance the                                                            
following year. He stressed  this legislation is intended to address                                                            
the  matter of  districts  enrolling every  four-year  old into  the                                                            
public school system and collecting State foundation funding.                                                                   
Senator Taylor  asked what  would prevent  a district to  continuing                                                            
the practice,  claiming intent  to advance  each student. He  opined                                                            
this is  a manipulation of  the foundation  funds by certain  school                                                            
districts  to obtain  more  money.   He recalled  earlier  practices                                                            
before the  passage of  SB 36, establishing  the current  foundation                                                            
funding formula, in which  some districts claimed gifted students at                                                            
a rate 2,000 percent  higher than any other community  in the United                                                            
States. He elaborated about other misuses.                                                                                      
Mr.  Jeans assured  the  testimony on  this  legislation  adequately                                                            
establishes  intent and that  if the Department  discovers  a school                                                            
district is "blanketly"  enrolling four-year olds, it would have the                                                            
authority to deny funding in the subsequent school year.                                                                        
Senator Taylor  offered a motion to  report the bill from  Committee                                                            
with individual recommendations and accompanying fiscal note.                                                                   
Without objection  CS HB 154 (FIN) MOVED from Committee  with fiscal                                                            
note #2  from the  Department of  Education  and Early Development,                                                             
which reflected a reduced expense of $3,916,200 in FY 05.                                                                       
Co-Chair Wilken announced  the Committee would recess to the call of                                                            
the chair.                                                                                                                      
AT EASE 10:57 AM / 2:26 PM                                                                                                      
Co-Chair Gary Wilken adjourned the meeting at 02:26 PM                                                                          

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