Legislature(2017 - 2018)SENATE FINANCE 532

04/02/2018 03:00 PM FINANCE

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Audio Topic
03:02:17 PM Start
03:03:29 PM Regulatory Commission of Alaska Appointee Dr. Anthony Scott
03:35:46 PM SB216
04:19:29 PM SB104
04:37:37 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Time Change --
Consideration of Governor's Appointees
+ Regulatory Commission of Alaska: TELECONFERENCED
- Dr. Antony Scott
+= HB 286 APPROP: OPERATING BUDGET/LOANS/FUNDS TELECONFERENCED
Scheduled but Not Heard
<Pending Referral>
+ SB 216 SCHOOL FUNDING FOR CONSOLIDATED SCHOOLS TELECONFERENCED
Heard & Held
+= SB 104 EDUCATION CURRICULUM TELECONFERENCED
Heard & Held
-- Public Testimony Reopened for this Hearing --
-- Public Testimony <Limited to 2 Minutes> --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                       April 2, 2018                                                                                            
                         3:02 p.m.                                                                                              
                                                                                                                                
3:02:17 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  MacKinnon  called  the  Senate  Finance  Committee                                                                    
meeting to order at 3:02 p.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Anna MacKinnon, Co-Chair                                                                                                
Senator Click Bishop, Vice-Chair                                                                                                
Senator Peter Micciche                                                                                                          
Senator Gary Stevens                                                                                                            
Senator Natasha von Imhof                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Donny Olson                                                                                                             
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Dr.  Antony  Scott,   Appointee,  Regulatory  Commission  of                                                                    
Alaska;  Jonathan King,  Staff, Senator  Natasha Von  Imhof;                                                                    
Heidi  Teshner,  Director,   Finance  and  Support  Services                                                                    
Division,  Department of  Education  and Early  Development;                                                                    
Mindy Lobaugh, Specialist, School  of Finance and Facilities                                                                    
Section,  Department  of  Education and  Early  Development;                                                                    
Paul Prussing,  Director of Student Learning,  Department of                                                                    
Education   and  Early   Development;  Don   Enoch,  Special                                                                    
Education Administrator,  Department of Education  and Early                                                                    
Development.                                                                                                                    
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Jim  Anderson,  Chief  Financial Officer,  Anchorage  School                                                                    
District; Dr.  Mark Stock, Deputy  Superintendent, Anchorage                                                                    
School District.                                                                                                                
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 104    EDUCATION CURRICULUM                                                                                                  
                                                                                                                                
          SB 104 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
SB 216    SCHOOL FUNDING FOR CONSOLIDATED SCHOOLS                                                                               
                                                                                                                                
          SB 216 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
CSHB 286(FIN) AM(BRF SUP MAJ FLD)(EFD FLD)                                                                                      
          APPROP: OPERATING BUDGET/LOANS/FUNDS                                                                                  
                                                                                                                                
          CSHB 286(FIN) AM(BRF SUP MAJ FLD)(EFD FLD) was                                                                        
          SCHEDULED but not HEARD.                                                                                              
                                                                                                                                
REGULATORY COMMISSION OF ALASKA APPOINTEE DR. ANTHONY SCOTT                                                                     
                                                                                                                                
^REGULATORY  COMMISSION  OF  ALASKA  APPOINTEE  DR.  ANTHONY                                                                  
SCOTT                                                                                                                         
                                                                                                                                
3:03:29 PM                                                                                                                    
                                                                                                                                
DR.  ANTONY  SCOTT,   APPOINTEE,  REGULATORY  COMMISSION  OF                                                                    
ALASKA, introduced himself.  He gave a brief  history of his                                                                    
background  and   reason  for  desiring  to   serve  on  the                                                                    
Regulatory Commission of Alaska (RCA).                                                                                          
                                                                                                                                
Co-Chair  MacKinnon wondered  whether  there was  a bias  or                                                                    
conflict  of  interest, because  of  his  thesis. Mr.  Scott                                                                    
replied  that  he  did  not   believe  had  a  bias  against                                                                    
industry. He  stated that the  Regulatory Commission  made a                                                                    
decision  setting  pipeline   tariffs  on  the  Trans-Alaska                                                                    
Pipeline System  (TAPS) in 2002.  That decision  was largely                                                                    
echoed by  the Federal Energy Regulatory  Commission (FERC).                                                                    
His master's  thesis suggested  that if  standard regulatory                                                                    
theories were applied, pipeline  tariffs would result in the                                                                    
range that  both those regulatory bodies  found appropriate.                                                                    
the pipeline tariffs were  settled after approximately eight                                                                    
years  of litigation.  The tariffs  were settled,  the state                                                                    
explained,  in  large  part  because FERC  did  not  make  a                                                                    
decision. At the time, pipeline  tariffs were still high, so                                                                    
the  state came  to an  agreement  to set  tariffs under  an                                                                    
automatic procedure.                                                                                                            
                                                                                                                                
3:07:37 PM                                                                                                                    
                                                                                                                                
Senator von Imhof queried the  potential merger of the power                                                                    
companies. Mr.  Scott replied  that he  could not  speak too                                                                    
much on the merger.                                                                                                             
                                                                                                                                
Senator  von Imhof  stated that  she  was somewhat  familiar                                                                    
with how  Regulatory Commission of Alaska  helped to oversee                                                                    
the  entire  rail  line.  She  wondered  whether  there  was                                                                    
infrastructure  along  the rail  line,  and  whether it  had                                                                    
helped or hindered the economic  value for the end user. Mr.                                                                    
Scott  replied that  the infrastructure  that was  built was                                                                    
largely  confined  to  the generation  side.  He  wanted  to                                                                    
separation  the discussion,  because the  rail belt  had two                                                                    
different  sets of  business model  issues.  He shared  that                                                                    
there was  not a  good current  business model  for building                                                                    
transmission in  the rail belt.  He noted  that it may  be a                                                                    
historical   accident.   He   explained   that   there   was                                                                    
substantial  reliability  on   the  legislature  to  provide                                                                    
grants   to   help    fund   and   underwrite   transmission                                                                    
infrastructure development.                                                                                                     
                                                                                                                                
Senator  Micciche  noted  that the  experience  was  largely                                                                    
academic  from  a  state perspective.  He  queried  feelings                                                                    
about how the board was at a  period of time at the low side                                                                    
of  private  sector  experience. Mr.  Scott  responded  that                                                                    
having industry  experience in the Regulatory  Commission of                                                                    
Alaska was beneficial, helpful, and useful.                                                                                     
                                                                                                                                
3:15:51 PM                                                                                                                    
                                                                                                                                
Senator Micciche wondered how  that balance would occur with                                                                    
a  commission  with less  experience  in  the industry.  Mr.                                                                    
Scott responded that he had  considered that issue. He noted                                                                    
the need  for increased exposure of  staff and commissioners                                                                    
on an informal basis to  the day-to-day issues. He felt that                                                                    
people  could be  better  exposed to  the  operation of  the                                                                    
industry.                                                                                                                       
                                                                                                                                
Co-Chair  MacKinnon   wondered  whether  the   position  had                                                                    
changed  from the  original thesis  related to  tariffs. Mr.                                                                    
Scott replied  that his position  about the  TAPS settlement                                                                    
methodology  did  not  set rates  consistent  with  standard                                                                    
regulatory methodology had not changed.                                                                                         
                                                                                                                                
Co-Chair  MacKinnon wondered  whether Mr.  Scott "stood  by"                                                                    
his  thesis.  Mr.  Scott replied  that  there  were  details                                                                    
around  appropriate  rate of  return  that  he realized  was                                                                    
wrong.                                                                                                                          
                                                                                                                                
3:20:04 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  asked whether the  Regulatory Commission                                                                    
of  Alaska  should  have   oversight  over  the  state-owned                                                                    
pipeline.  Mr.  Scott replied  that  the  pipeline would  be                                                                    
preempted from having regulatory jurisdiction for tariffs.                                                                      
                                                                                                                                
Co-Chair  MacKinnon  wondered  whether that  was  consistent                                                                    
with a  belief of what  was right. Mr. Scott  responded that                                                                    
it  was reasonable  in the  case of  a natural  gas pipeline                                                                    
whose primary purpose was exports to Asia.                                                                                      
                                                                                                                                
Co-Chair MacKinnon queried an opinion  on the portion of gas                                                                    
for instate use, and whether  there should be involvement by                                                                    
Regulatory Commission  of Alaska.  Mr. Scott replied  in the                                                                    
negative,  because it  was not  consistent with  the Natural                                                                    
Gas Act.  He did  not see  a huge need,  given the  depth of                                                                    
expertise  that had  been developed,  in  setting rates  for                                                                    
natural  gas  pipelines  for the  Regulatory  Commission  of                                                                    
Alaska to play any  particular role in regulating intrastate                                                                    
transport.                                                                                                                      
                                                                                                                                
Co-Chair MacKinnon wanted more  information about tariffs in                                                                    
Alaska  Gasline  Development  Corporation  (AGDC),  and  any                                                                    
issues about the state regulating  itself. Mr. Scott replied                                                                    
that  he did  not see  a problem,  because there  were well-                                                                    
established  laws an  precedents  about  how such  pipelines                                                                    
should  be  regulated. He  felt  that  it  was a  matter  of                                                                    
regulators   following  the   law   and  applying   standard                                                                    
practice.                                                                                                                       
                                                                                                                                
Co-Chair  MacKinnon  asked  what   would  occur  should  the                                                                    
pipeline  end at  Nikiski, with  a sales  agreement at  that                                                                    
point. She wondered whether  Regulatory Commission of Alaska                                                                    
or FERC  be involved  in that scenario.   Mr.  Scott replied                                                                    
that the  pipeline tariffs  would be  regulated by  FERC for                                                                    
offtakes in Nikiski for instate use.                                                                                            
                                                                                                                                
Co-Chair  MacKinnon wondered  if that  was true  for instate                                                                    
use.  Mr.  Scott stated  that  the  pipeline act  recognized                                                                    
federal preemption in that regard.                                                                                              
                                                                                                                                
Senator  Stevens   queried  the   reason  for   leaving  the                                                                    
commission. Mr. Scott  replied that he was  recruited out of                                                                    
the commission.                                                                                                                 
                                                                                                                                
                                                                                                                                
Co-Chair MacKinnon  noted that  the Cook Inlet  Recovery Act                                                                    
told  Regulatory  Commission  of  Alaska  to  diversify  gas                                                                    
supply  contracts.  She  wondered whether  there  should  be                                                                    
changes  to  that  agreement.  Mr.  Scott  replied  that  he                                                                    
supported  the  directive.  He felt  that  diversifying  the                                                                    
contracts would be good for competition and consumers.                                                                          
                                                                                                                                
Vice-Chair Bishop  MOVED to  ADVANCE Dr.  Antony Scott  to a                                                                    
Joint Legislative Session for consideration.                                                                                    
                                                                                                                                
3:27:53 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:35:46 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
SENATE BILL NO. 216                                                                                                           
                                                                                                                                
     "An Act  relating to the  calculation of state  aid for                                                                    
     schools    that    consolidate;   relating    to    the                                                                    
     determination of  the number of schools  in a district;                                                                    
     and providing for an effective date."                                                                                      
                                                                                                                                
3:35:46 PM                                                                                                                    
                                                                                                                                
Senator  Micciche MOVED  to ADOPT  the committee  substitute                                                                    
for SB 216, Work Draft 30-LS1483\N (Laffen 3/30/18).                                                                            
                                                                                                                                
Co-Chair MacKinnon OBJECTED for discussion.                                                                                     
                                                                                                                                
SENATOR VON  IMHOF, SPONSOR, explained the  legislation. She                                                                    
stated that the  bill was created when  the Anchorage School                                                                    
District presented to the  Anchorage legislators. She shared                                                                    
that she  was previously  a member  of the  Anchorage School                                                                    
Board. She  stated that there  was a school  capacity study,                                                                    
that found that there was  migration and movement within the                                                                    
Anchorage  elementary schools  that left  some schools  over                                                                    
capacity  and some  schools under  capacity. She  noted that                                                                    
there  was some  halting of  state aid,  so there  were some                                                                    
schools  that delayed  some  renovation and  reconstruction.                                                                    
She  stated  that in  the  last  fall the  Anchorage  School                                                                    
District  had   done  calculations  to   evaluate  different                                                                    
scenarios  of consolidating  older  elementary schools  with                                                                    
excess capacity,  and moving  students to  nearby elementary                                                                    
school with  excess capacity; and the  hypothesis of closing                                                                    
an elementary  school. It  was found that  when there  was a                                                                    
school of  approximately 250 students,  there was  a certain                                                                    
school-size  cost factor  of  the  average daily  membership                                                                    
that was  greater than moving  students to a  larger school.                                                                    
It  was found  that the  revenue  did not  exceed the  costs                                                                    
saved for closing  that school. It was  suggested that there                                                                    
be  an allowance  for an  adjustment  in the  intent of  the                                                                    
school.                                                                                                                         
                                                                                                                                
3:40:07 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  requested the  changes in  the committee                                                                    
substitute. Co-Chair MacKinnon deferred to Mr. King.                                                                            
                                                                                                                                
3:40:24 PM                                                                                                                    
                                                                                                                                
JONATHAN KING,  STAFF, SENATOR NATASHA VON  IMHOF, discussed                                                                    
the Explanation of Changes (copy on file):                                                                                      
                                                                                                                                
     Page 3,  line 14 and  Page 5, lines  5, 9, 11,  12: All                                                                    
     references to "state aid"  within subparagraphs (H) and                                                                    
     (I)  are  changed  to read  "basic  need"  to  properly                                                                    
     define  the  section  of  statute  that  this  bill  is                                                                    
     affecting.                                                                                                                 
                                                                                                                                
     Page  5,  lines  22-24:  Section  (M)  is  reworded  to                                                                    
     clarify  the   information  that   would  need   to  be                                                                    
     submitted  by school  districts  to  the Department  of                                                                    
     Education  to calculate  the consolidation  transition.                                                                    
     Instead of the  more generic "appropriate calculations"                                                                    
    the bill specifies "schools and corresponding ADM."                                                                         
                                                                                                                                
     Page  5: Section  (N), which  defined "community,"  was                                                                    
     deleted. This term is  already appropriately defined in                                                                    
     the   Department   of   Education's   funding   formula                                                                    
     regulations.                                                                                                               
                                                                                                                                
Co-Chair MacKinnon WITHDREW the OBJECTION.                                                                                      
                                                                                                                                
3:43:00 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:43:25 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Mr.  King  discussed  the   presentation,  "SB  216:  School                                                                    
Consolidation  Transition"  (copy  on file).  He  looked  at                                                                    
slide  2,  "Alaska's  School  Size  Factor  Adjustment."  He                                                                    
stated that  the school size  adjustment was a  component of                                                                    
the  broader school  financing calculation  contained in  AS                                                                    
14.17.410, that adjusted the  average daily membership based                                                                    
upon the size of the school.  He noted that moving from left                                                                    
to right on  the curve showed that the  amount of adjustment                                                                    
declined as  the school  increased in  size. He  stated that                                                                    
every  individual student  counted less  toward funding  the                                                                    
school. He  shared that it incentivized  districts to create                                                                    
smaller  schools  and  made  a   challenge  for  schools  to                                                                    
consolidate schools.                                                                                                            
                                                                                                                                
3:45:00 PM                                                                                                                    
                                                                                                                                
Mr. King  highlighted slide  3, "Effect  of the  School Size                                                                    
Factor  on Consolidation  Example  1."  The distribution  of                                                                    
dots was  the distribution  of schools within  the Anchorage                                                                    
School District. He  noted that the left  hand vertical axis                                                                    
showed the  school size factor, with  was the multiplicative                                                                    
factor  used  in  determining  school  funding.  The  bottom                                                                    
showed the  actual enrollment as  a proxy for  average daily                                                                    
memberships. He  stressed that there was  a downward sloping                                                                    
curve,  which meant  that as  the  school grew  there was  a                                                                    
smaller coefficient that was used in the funding formula.                                                                       
                                                                                                                                
Mr. King addressed slide 4, "What the Bill Does":                                                                               
                                                                                                                                
     Section 1                                                                                                                  
                                                                                                                                
          Section 1 removes a disincentive to school                                                                            
          consolidation:                                                                                                        
                                                                                                                                
          ? Four-year transition period for consolidating                                                                       
          schools                                                                                                               
          ? Years 1 and 2 preserve 100 percent pre-                                                                             
          consolidation per student funding.                                                                                    
          ? Year 3 provides standard funding plus 66                                                                            
          percent of pre/post difference.                                                                                       
          ? Year 4 provides standard funding plus 33                                                                            
          percent of pre/post difference.                                                                                       
          ? After Year 4 provide standard funding per AS                                                                        
          14.17.410.                                                                                                            
                                                                                                                                
Senator Micciche  asked for  a restatement  of the  last two                                                                    
bullets. Mr. King replied:                                                                                                      
                                                                                                                                
          ?  Year  4  provides   standard  funding  plus  33                                                                    
          percent of pre/post difference.                                                                                       
          ?  After Year  4 provide  standard funding  per AS                                                                    
          14.17.410.                                                                                                            
                                                                                                                                
3:50:21 PM                                                                                                                    
                                                                                                                                
Mr. King highlighted slide 5, "What the Bill Does Not Do":                                                                      
                                                                                                                                
     Section 1                                                                                                                  
                                                                                                                                
          The Bill does not:                                                                                                    
                                                                                                                                
          ? Change the school size formula (AS 14.17.450);                                                                      
          ?  Change state  aid  calculations (AS  14.17.410)                                                                    
          for any  school or  district that is  not involved                                                                    
          in a consolidation;                                                                                                   
          ?  Encourage districts  to build  new schools  for                                                                    
          the purposes of consolidating existing schools;                                                                       
          ?  Allow  schools   to  reopen  and  reconsolidate                                                                    
          schools in  order to take  inappropriate advantage                                                                    
          of the consolidation transition.                                                                                      
                                                                                                                                
Mr. King discussed slide 6, "What the Bill Does":                                                                               
                                                                                                                                
     Section 2                                                                                                                  
                                                                                                                                
          Section  2   provides  an  incentive   for  single                                                                    
          community  schools to  fully utilize  the capacity                                                                    
         of K-12 school buildings in rural Alaska.                                                                              
                                                                                                                                
          ?  Corrects  a  provision in  AS  14.17.905  where                                                                    
          communities  with  a   single  K-12  schools  lose                                                                    
          funding when their  average daily membership (ADM)                                                                    
          exceeds  425  even  when the  facility's  capacity                                                                    
          exceeds 425.                                                                                                          
                                                                                                                                
          Under  the  current  provision,  schools  in  this                                                                    
          circumstance  are  treated  as 2  facilities  when                                                                    
          their ADM  is 425 and  below, but when  they reach                                                                    
          426 they  are treated at one  facility for funding                                                                    
          purposes.   This  switch   lowers  state   aid  by                                                                    
          hundreds  of   thousands  of  dollars   and  could                                                                    
          increase the  incentive to build  another facility                                                                    
          to recapture lost funding.                                                                                            
                                                                                                                                
3:54:28 PM                                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon queried  information about  slide 9.  He                                                                    
stated  that it  was an  expected savings  using a  previous                                                                    
example he noted that on slide  8 there was an example where                                                                    
a district  with a cost  factor of 1 consolidates  5 schools                                                                    
into 4  schools. The slide  covered the total state  aid and                                                                    
the total  savings attributable  to the  treasury associated                                                                    
with consolidation.  He explained  that slide 9  showed that                                                                    
if there  were five  schools totaling  1,720, the  base year                                                                    
would contribute  $15.07 million in  state aid to  the local                                                                    
school district.  He shared  that consolidating  the schools                                                                    
to  four  schools  would  result  in  state  aid  of  $14.42                                                                    
million.                                                                                                                        
                                                                                                                                
Co-Chair  MacKinnon  wondered  whether the  model  had  been                                                                    
stress   tested  on   different   sizes   of  schools   with                                                                    
consolidation numbers. Mr. King  replied that slide 3 showed                                                                    
an example  of a stress test  for a larger school.  He noted                                                                    
that the consolidation of two  larger schools would save the                                                                    
state  approximately $1  million. He  noted the  stress test                                                                    
for  the  elementary  school showed  a  savings  of  between                                                                    
400,000  and $600,000  per year  depending  on the  original                                                                    
size  of  the  schools,  and   how  many  schools  would  be                                                                    
distributing those children over.                                                                                               
                                                                                                                                
3:59:00 PM                                                                                                                    
                                                                                                                                
Senator  Stevens wondered  how  the bill  would benefit  the                                                                    
children.  Mr. King  replied that  the finances  matter, but                                                                    
the  primary  purpose  of  the  educational  system  was  to                                                                    
educate  children.  He noted  that  many  of the  elementary                                                                    
schools   had  half-time   or  third-time   special  subject                                                                    
teachers,  who  spent  time shuttling  between  clusters  of                                                                    
schools.  He  felt  that  consolidating  the  schools  would                                                                    
result  in  that teacher  being  in  residence at  a  single                                                                    
school.                                                                                                                         
                                                                                                                                
Senator  Stevens  wondered  whether the  districts  had  any                                                                    
negative response to the legislation.  Mr. King replied that                                                                    
he  had not  heard any  negative feelings,  but stated  that                                                                    
there may be some in public testimony.                                                                                          
                                                                                                                                
Senator  von  Imhof  added  that it  would  be  a  voluntary                                                                    
program.                                                                                                                        
                                                                                                                                
Senator Micciche  surmised that there would  be less dollars                                                                    
for infrastructure,  and more dollars in  the classroom. Mr.                                                                    
King agreed.                                                                                                                    
                                                                                                                                
4:03:49 PM                                                                                                                    
                                                                                                                                
JIM  ANDERSON,  CHIEF  FINANCIAL OFFICER,  ANCHORAGE  SCHOOL                                                                    
DISTRICT  (via teleconference),  stated that  he had  worked                                                                    
closely with the  sponsor. He shared that when  there was an                                                                    
initial  examination of  the  declining student  population,                                                                    
there was  a calculation.  He shared  that, currently,  if a                                                                    
school was closed for consolidation  there was a significant                                                                    
number of  students who would need  transportation. He noted                                                                    
that taking students  from one school would  result with the                                                                    
distribution among  many schools. He noted  that there would                                                                    
be a loss of $500,000 dollars for any closed school.                                                                            
                                                                                                                                
Senator Stevens  queried the impact on  the Anchorage School                                                                    
District. Mr.  Anderson replied that  that a  consultant had                                                                    
been hired  to establish  a plan. The  initial brief  to the                                                                    
school board would be more than one school.                                                                                     
                                                                                                                                
Senator Micciche  requested a copy  of that analysis  on the                                                                    
associated  costs with  school  consolidation. Mr.  Anderson                                                                    
agreed to provide that information.                                                                                             
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
4:08:42 PM                                                                                                                    
                                                                                                                                
HEIDI  TESHNER,  DIRECTOR,   FINANCE  AND  SUPPORT  SERVICES                                                                    
DIVISION,  DEPARTMENT OF  EDUCATION  AND EARLY  DEVELOPMENT,                                                                    
stated that she had worked  with the bill sponsor to provide                                                                    
feedback.  She   felt  that   the  conversations   had  been                                                                    
incorporated into the committee  substitute, and allowed for                                                                    
the calculations to work for the districts.                                                                                     
                                                                                                                                
Co-Chair  MacKinnon  queried a  position  on  the bill.  She                                                                    
wondered  whether school  districts would  benefit from  the                                                                    
policy.  Ms. Teshner  replied that  Department of  Education                                                                    
and Early  Development (DEED)  was supportive  of additional                                                                    
tools for districts, and the  bill was seen as an additional                                                                    
tool to maximize their facilities.                                                                                              
                                                                                                                                
Co-Chair  MacKinnon  queried the  benefit  of  the bill  for                                                                    
rural communities.                                                                                                              
                                                                                                                                
4:10:29 PM                                                                                                                    
                                                                                                                                
MINDY LOBAUGH, SPECIALIST, SCHOOL  OF FINANCE AND FACILITIES                                                                    
SECTION,  DEPARTMENT  OF  EDUCATION AND  EARLY  DEVELOPMENT,                                                                    
looked at  Section 2, which  was an  unintended consequence.                                                                    
She  shared that  originally the  formula  had initially  an                                                                    
adjustment of  750, so  a community  under 750  received the                                                                    
appropriate  adjustments for  the  single  site. She  shared                                                                    
that  when  there  was  a  change in  2001,  there  was  the                                                                    
possibility of  a fix to a  community, but there was  not an                                                                    
opportunity  to revisit  the issue.  She shared  that Hooper                                                                    
Bay was  part of that issue,  so the language would  put the                                                                    
formula on a stronger track.                                                                                                    
                                                                                                                                
Co-Chair  MacKinnon asked  for  more  information about  the                                                                    
fiscal note.                                                                                                                    
                                                                                                                                
Ms. Teshner explained the fiscal note.                                                                                          
                                                                                                                                
Senator Micciche explained the fiscal note.                                                                                     
                                                                                                                                
4:15:15 PM                                                                                                                    
                                                                                                                                
Senator  Micciche  felt  that   the  fiscal  note  had  some                                                                    
reflection of the reduced eventual  payout from the state to                                                                    
the districts.  He wondered how  that reduced  funding would                                                                    
be   assessed,   so   there   could   be   a   philosophical                                                                    
understanding of a  reduction associated with consolidation.                                                                    
Ms. Teshner  replied that, because  there was an  unknown of                                                                    
what  schools  would come  forward,  but  there would  be  a                                                                    
reduction in year three.                                                                                                        
                                                                                                                                
Senator  Micciche wondered  whether the  primary purpose  of                                                                    
the  bill  was for  consolidation  to  not adversely  impact                                                                    
school districts,  but noted that  there would be  a reduced                                                                    
costs to the state. Ms. Teshner replied in the affirmative.                                                                     
                                                                                                                                
Co-Chair MacKinnon  announced that  amendments would  be due                                                                    
the following day.                                                                                                              
                                                                                                                                
SB  216  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
SENATE BILL NO. 104                                                                                                           
                                                                                                                                
     "An Act relating to the duties of the state Board of                                                                       
     Education and Early Development; and relating to                                                                           
     school curriculum."                                                                                                        
                                                                                                                                
4:19:29 PM                                                                                                                    
                                                                                                                                
PAUL PRUSSING,  DIRECTOR OF STUDENT LEARNING,  DEPARTMENT OF                                                                    
EDUCATION AND EARLY DEVELOPMENT, introduced himself.                                                                            
                                                                                                                                
DON  ENOCH, SPECIAL  EDUCATION ADMINISTRATOR,  DEPARTMENT OF                                                                    
EDUCATION AND EARLY DEVELOPMENT, introduced himself.                                                                            
                                                                                                                                
Co-Chair  MacKinnon stated  that there  were some  questions                                                                    
about Individualized Education Programs (IEPs).                                                                                 
                                                                                                                                
Senator  Stevens  wondered  whether all  IEPs  were  equally                                                                    
valid. He was concerned about  the possible savings of time.                                                                    
He  wondered whether  a school  district with  an IEP  would                                                                    
want to  change that IEP.  He wondered whether an  IEP would                                                                    
be  considered  a  finished  absolute  document.  Mr.  Enoch                                                                    
replied  that the  IEP was  transferrable  from district  to                                                                    
district.  He asserted  that  some  districts had  different                                                                    
standards allowed for  a district level. He  stated that, at                                                                    
that time,  the district  would have an  abbreviated meeting                                                                    
to address  those small  points. He  noted that,  because of                                                                    
the  differences  in  paperwork between  districts,  it  was                                                                    
slightly more labor intensive.                                                                                                  
                                                                                                                                
Senator  Micciche   noted  it  was   an  atmosphere-specific                                                                    
document,    because   of    the   different    specialties,                                                                    
instructors, and  setting. He felt  that the document  was a                                                                    
"starting point" at a new school,  when a child arrives at a                                                                    
new district.  Mr. Enoch replied  that the IEP  was designed                                                                    
to be as flexible as necessary.                                                                                                 
                                                                                                                                
Senator Stevens  queried the online advantages  versus a 30-                                                                    
page paper.  Mr. Enoch replied  that software  companies had                                                                    
developed ways to guide people  through certain scenarios to                                                                    
ensure  compliance-accurate responses.  The largest  problem                                                                    
for most teachers was the paperwork.                                                                                            
                                                                                                                                
Senator Stevens  wondered whether  the state  agencies dealt                                                                    
with IEPs  or whether  the districts completely  oversaw the                                                                    
IEPs. Mr. Enoch replied that the IEPs were reviewed on a 4-                                                                     
year rotation for  all the small districts;  and annually in                                                                    
all the large districts.                                                                                                        
                                                                                                                                
4:24:20 PM                                                                                                                    
                                                                                                                                
Senator von  Imhof noted  that it  was a  recommendation per                                                                    
the performance review  of DEED in 2016. She  shared that it                                                                    
was  found  that  there  were  multiple  software  platforms                                                                    
utilized by  the 53 school  districts across the  state, and                                                                    
it   was   found   to  be   an   inefficient   system.   The                                                                    
recommendation  was for  a more  standard software  platform                                                                    
initiated by DEED available to districts.                                                                                       
                                                                                                                                
Co-Chair   MacKinnon  noted   the  document   outlining  the                                                                    
benefits for parents, teachers,  schools, districts, and the                                                                    
state.  She  noted  that  parents  had  complete  access  to                                                                    
student files at all time. She highlighted the benefits.                                                                        
                                                                                                                                
Senator Micciche explained the fiscal note.                                                                                     
                                                                                                                                
4:31:07 PM                                                                                                                    
                                                                                                                                
DR.  MARK  STOCK,  DEPUTY SUPERINTENDENT,  ANCHORAGE  SCHOOL                                                                    
DISTRICT (via  teleconference) felt that it  was appropriate                                                                    
that all Alaskan students had  the best curriculum materials                                                                    
available within  budget. He used a  construction analogy to                                                                    
explain the  bill. He  felt that the  bill helped  to ensure                                                                    
the  best  infrastructure  available. He  hoped  that  there                                                                    
would be realistic expectations.                                                                                                
                                                                                                                                
Vice-Chair  Bishop queried  the monetary  value to  evaluate                                                                    
the  curriculum. Dr.  Stock replied  that the  K-5 materials                                                                    
were approximately  $6 million.  He furthered  that millions                                                                    
of  dollars would  be spent  for  implementation. He  stated                                                                    
that  grant  funds  would  be  used  to  hire  instructional                                                                    
coaches to ensure that the materials were used properly.                                                                        
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony                                                                                      
                                                                                                                                
SB  104  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
CSHB 286(FIN) AM(BRF SUP MAJ FLD)(EFD FLD)                                                                                    
                                                                                                                                
     "An  Act making  appropriations for  the operating  and                                                                    
     loan  program  expenses  of state  government  and  for                                                                    
     certain   programs;    capitalizing   funds;   amending                                                                    
     appropriations;      and       making      supplemental                                                                    
     appropriations."                                                                                                           
                                                                                                                                
CSHB 286(FIN) AM(BRF SUP MAJ FLD)(EFD FLD) was SCHEDULED                                                                        
but not HEARD.                                                                                                                  
                                                                                                                                
Co-Chair MacKinnon discussed the following day's agenda.                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
4:37:37 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 4:37 p.m.                                                                                          

Document Name Date/Time Subjects
SB 216 School Consolidation Presentation-Senate Finance.pdf SFIN 4/2/2018 3:00:00 PM
SB 216
SB 216 Sponsor Statement.pdf SFIN 4/2/2018 3:00:00 PM
SB 216
SB 216 Sectional Analysis-Sen Fin.pdf SFIN 4/2/2018 3:00:00 PM
SB 216
SB 104 SFIN Request - Special Education Plan Benefits.pdf SFIN 4/2/2018 3:00:00 PM
SB 104
SB 104 Position 3-18.pdf SFIN 4/2/2018 3:00:00 PM
SB 104
SB 216 Lower Yukon School District Support Letter.pdf SFIN 4/2/2018 3:00:00 PM
SB 216