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CSSB 36(FIN) AM: "An Act relating to public schools; relating to the definition of a school district, to the transportation of students, to employment of chief school administrators, to school district layoff plans, to the special education service agency, and to the child care grant program; and providing for an effective date."

00CS FOR SENATE BILL NO. 36(FIN) am 01 "An Act relating to public schools; relating to the definition of a school district, 02 to the transportation of students, to employment of chief school administrators, to 03 school district layoff plans, to the special education service agency, and to the 04 child care grant program; and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. PURPOSE. The purposes of sec. 2 of this Act are to 07 (1) provide a level of funding through the public school funding program that 08 allows for an equitable level of educational opportunities for those students attending the 09 public schools of the state; 10 (2) provide an equitable level of funding to each school within a school 11 district; and 12 (3) give people in the unorganized borough the maximum opportunity to 13 organize as a municipality and to provide as much flexibility as possible in choosing a method 14 of making a local contribution to schools.

01 * Sec. 2. AS 14.17 is amended by adding new sections to read: 02 Article 1. State Funding to Public Schools. 03  Sec. 14.17.300. Public school account. (a) The public school account is 04 established. The account consists of appropriations for distribution to school districts, 05 the state boarding school, and for centralized correspondence study under this chapter. 06  (b) The money in the account may be used only in aid of public schools, 07 including community school programs, and for centralized correspondence study 08 programs under this chapter. 09  Sec. 14.17.400. State funding for districts. (a) The state funding for which 10 a school district is eligible in a fiscal year is equal to the amount for which a district 11 qualifies under AS 14.17.410. 12  (b) If the amount in the public school account is insufficient to meet the 13 amounts authorized under (a) of this section for a fiscal year, the department shall 14 reduce pro rata the state share of public school funding for which districts are eligible 15 by the necessary percentage as determined by the department. If the state share of 16 public school funding is reduced under this subsection, the department shall also 17 reduce state funding for centralized correspondence study and the state boarding school 18 by the same percentage. 19  Sec. 14.17.410. Public school funding. (a) A district is eligible for public 20 school funding in an amount equal to the sum calculated under (b) and (c) of this 21 section. 22  (b) Public school funding consists of a state share and a local contribution, 23 determined as follows: 24  (1) the state share equals state support minus a local contribution and 25 90 percent of eligible federal impact aid for that fiscal year; state support equals the 26 sum obtained under (D) of this paragraph, multiplied by the base student allocation set 27 out in AS 14.17.470; district adjusted ADM is calculated as follows: 28  (A) the ADM of each school in the district is calculated by 29 applying the school size factor to the student count as set out in AS 14.17.450; 30  (B) the number obtained under (A) of this paragraph is 31 multiplied by the district cost factor described in AS 14.17.460;

01  (C) the ADMs of each school in a district, as adjusted according 02 to (A) and (B) of this paragraph, are added; the sum is then multiplied by the 03 special needs factor set out in AS 14.17.420(a)(1); 04  (D) the number obtained for intensive services under 05 AS 14.17.420(a)(2) and the number obtained for correspondence study under 06 AS 14.17.430 are added to the number obtained under (C) of this paragraph; 07  (2) the local contribution of a city or borough school district is the 08 equivalent of a four mill tax levy on the full and true value of the taxable real and 09 personal property in the district as of January 1 of the second preceding fiscal year, 10 as determined by the Department of Community and Regional Affairs under 11 AS 14.17.510 and AS 29.45.110, not to exceed 100 percent of a district's state support 12 as determined under (1) of this subsection. 13  (c) In addition to the local contribution required under (b)(2) of this section, 14 a city or borough school district in a fiscal year may make a local contribution of not 15 more than the greater of 16  (1) the equivalent of a two mill tax levy on the full and true value of 17 the taxable real and personal property in the district as of January 1 of the second 18 preceding fiscal year, as determined by the Department of Community and Regional 19 Affairs under AS 14.17.510 and AS 29.45.110; or 20  (2) 23 percent of the district's state share of public school funding for 21 the fiscal year under (b)(1) of this section. 22  (d) Public school funding may not be provided to a city or borough school 23 district if the local contributions required under (b)(2) of this section have not been 24 made. 25  Sec. 14.17.420. Special needs and intensive services funding. (a) As a 26 component of public school funding, a district is eligible for special needs funding and 27 may be eligible for intensive services funding as follows: 28  (1) special needs funding is available to a district to assist the district 29 in providing special education, gifted and talented education, vocational education, and 30 bilingual education services to its students; a special needs funding factor of 1.20 shall 31 be applied as set out in AS 14.17.410(b)(1);

01  (2) in addition to the special needs funding for which a district is 02 eligible under (1) of this subsection, a district is eligible for intensive services funding 03 for each special education student who needs and receives intensive services and is 04 enrolled on the last day of the count period; for each such student, intensive services 05 funding is equal to ADM multiplied by five. 06  (b) A district is not eligible to receive funding under (a) of this section unless 07 the district has on file with the department a plan that indicates the special education, 08 gifted and talented education, vocational education, and bilingual education services 09 that will be provided to students. 10  (c) In this section, "intensive services" has the meaning given by the 11 department by regulation adopted under AS 14.30.180 - 14.30.350. 12  Sec. 14.17.430. State funding for correspondence study. Except as provided 13 in AS 14.17.400(b), funding for 14  (1) the state centralized correspondence study program or a district that 15 offers a statewide correspondence study program includes an allocation from the public 16 school account in an amount calculated by multiplying the ADM of the correspondence 17 program by the base student allocation and multiplying that product by 65 percent; and 18  (2) a district correspondence program includes an allocation from the 19 public school account in an amount calculated by multiplying the ADM of the district 20 correspondence program by the base student allocation. 21  Sec. 14.17.440. State funding for state boarding schools. (a) Except as 22 provided in AS 14.17.400(b), funding for state boarding schools established under 23 AS 14.16.010 includes an allocation from the public school account in an amount 24 calculated by 25  (1) determining the ADM of state boarding schools by applying the 26 school size factor to the student count as described in AS 14.17.450; 27  (2) multiplying the number obtained under (1) of this subsection by the 28 special needs factor in AS 14.17.420(a)(1) and multiplying that product by the base 29 student allocation; and 30  (3) multiplying the product determined under (2) of this subsection by 31 the district cost factor that is applicable to calculation of the public school funding for

01 the adjacent school district under AS 14.17.460. 02  (b) State boarding schools are also eligible for intensive services funding under 03 AS 14.17.420(a)(2). 04  Sec. 14.17.450. School size factor. For purposes of calculating a school's 05 ADM to determine public school funding, the ADM of each school in a district shall 06 be computed by applying the following formula: 07 If the student count The adjusted student count is 08 in a school is The number of 09 students in 10 At least But less than Base Multiplier excess of 11 1 - 20 39.6 12 20 - 30 39.6 + (1.62 x 20) 13 30 - 75 55.8 + (1.49 x 30) 14 75 - 150 122.85 + (1.27 x 75) 15 150 - 250 218.1 + (1.08 x 150) 16 250 - 400 326.1 + (0.97 x 250) 17 400 - 750 471.6 + (0.92 x 400) 18 750 or over 793.6 + (0.84 x 750) 19  Sec. 14.17.460. District cost factors. (a) For purposes of calculating a 20 district's adjusted ADM under AS 14.17.410(b)(1), the district cost factor for a school 21 district is as follows: 22 DISTRICT DISTRICT COST FACTOR 23 Alaska Gateway 1.291 24 Aleutians East 1.423 25 Aleutians Region 1.736 26 Alyeska Central School 1.000 27 Anchorage 1.000 28 Annette Island 1.011 29 Bering Strait 1.525 30 Bristol Bay 1.262 31 Chatham 1.120

01 Chugach 1.294 02 Copper River 1.176 03 Cordova 1.096 04 Craig 1.010 05 Delta/Greely 1.106 06 Denali 1.313 07 Dillingham 1.254 08 Fairbanks 1.039 09 Galena 1.348 10 Haines 1.008 11 Hoonah 1.055 12 Hydaburg 1.085 13 Iditarod 1.470 14 Juneau 1.005 15 Kake 1.025 16 Kashunamiut 1.389 17 Kenai Peninsula 1.004 18 Ketchikan 1.000 19 Klawock 1.017 20 Kodiak Island 1.093 21 Kuspuk 1.434 22 Lake and Peninsula 1.558 23 Lower Kuskokwim 1.491 24 Lower Yukon 1.438 25 Matanuska-Susitna 1.010 26 Mt. Edgecumbe 1.000 27 Nenana 1.270 28 Nome 1.319 29 North Slope 1.504 30 Northwest Arctic 1.549 31 Pelican 1.290

01 Petersburg 1.000 02 Pribilof 1.419 03 Sitka 1.000 04 Skagway 1.143 05 Southeast Island 1.124 06 Southwest Region 1.423 07 St. Mary's 1.351 08 Tanana 1.496 09 Unalaska 1.245 10 Valdez 1.095 11 Wrangell 1.000 12 Yakutat 1.046 13 Yukon Flats 1.668 14 Yukon/Koyukuk 1.502 15 Yupiit 1.469 16  (b) The department shall monitor the cost factors established under (a) of this 17 section and shall prepare and submit to the legislature by January 15 of every other 18 fiscal year proposed district cost factors. In determining the proposed district cost 19 factors, the department shall consider cost-of-living changes as measured by the 20 Anchorage Consumer Price Index for all urban consumers. 21  Sec. 14.17.470. Base student allocation. The base student allocation is 22 $3,944. 23 Article 2. Preparation of Public School Funding Budget. 24  Sec. 14.17.500. Student count estimate. (a) A district shall prepare and 25 submit to the department by November 5 of each fiscal year, in the manner and on 26 forms prescribed by the department, an estimate of its ADM and other student count 27 data, including per school student count data, for the succeeding fiscal year upon 28 which computations can be made to estimate the amount of public school funding for 29 which the district may be eligible under AS 14.17.400 in the succeeding fiscal year. 30 In making its report, the district shall consider its ADM, other student count data, the 31 pattern of growth or decline of the student population in preceding years, and other

01 pertinent information available to the district. 02  (b) Part-time students shall be included in the student count data in accordance 03 with regulations adopted by the department. 04  Sec. 14.17.505. Fund balance in school operating fund. (a) A district may 05 not accumulate in a fiscal year an unreserved portion of its year-end fund balance in 06 its school operating fund, as defined by department regulations, that is greater than 10 07 percent of its expenditures for that fiscal year. 08  (b) The department shall review each district's annual audit under 09 AS 14.14.050 for the preceding fiscal year to ascertain its year-end operating fund 10 balance. The amount by which the unreserved portion of that balance exceeds the 11 amount permitted in (a) of this section shall be deducted from the public school 12 funding that would otherwise be paid to the district in the current fiscal year. 13  Sec. 14.17.510. Determination of full and true value by Department of 14 Community and Regional Affairs. (a) To determine the amount of required local 15 contribution under AS 14.17.410(b)(2) and to aid the department and the legislature 16 in planning, the Department of Community and Regional Affairs, in consultation with 17 the assessor for each district in a city or borough, shall determine the full and true 18 value of the taxable real and personal property in each district in a city or borough. 19 If there is no local assessor or current local assessment for a city or borough school 20 district, then the Department of Community and Regional Affairs shall make the 21 determination of full and true value from information available. In making the 22 determination, the Department of Community and Regional Affairs shall be guided by 23 AS 29.45.110. The determination of full and true value shall be made by October 1 24 and sent by certified mail, return receipt requested, on or before that date to the 25 president of the school board in each city or borough school district. Duplicate copies 26 shall be sent to the commissioner. The governing body of a city or borough that is a 27 school district may obtain judicial review of the determination. The superior court 28 may modify the determination of the Department of Community and Regional Affairs 29 only upon a finding of abuse of discretion or upon a finding that there is no substantial 30 evidence to support the determination. 31  (b) Motor vehicles subject to the motor vehicle registration tax under

01 AS 28.10.431 shall be treated as taxable property under this section. 02  Sec. 14.17.520. Minimum expenditure for instruction. (a) A district shall 03 budget for and spend a minimum of 70 percent of its school operating expenditures in 04 each fiscal year on the instructional component of the district budget. 05  (b) The commissioner shall reject a district budget that does not comply with 06 (a) of this section and, unless a waiver has been granted by the board under (d) of this 07 section, shall withhold payments of state aid from that district, beginning with the 08 payment for the second full month after rejection and continuing until the school board 09 of the district revises the district budget to comply with (a) of this section. 10  (c) The commissioner shall review the annual audit of each district for 11 compliance with the expenditure requirements of (a) of this section. If the 12 commissioner determines that a district does not meet those requirements, the 13 commissioner shall advise the district of the determination, calculate the amount of the 14 deficiency, and deduct that amount from state aid paid to the district for the current 15 fiscal year. A deduction in state aid required under this subsection begins with the 16 payment for the second full month after the determination, unless a waiver has been 17 granted by the board under (d) of this section. 18  (d) A district that has been determined by the commissioner to be out of 19 compliance with the requirements of this section may, within 20 days of the 20 commissioner's determination, request a waiver by the board of the imposition by the 21 commissioner of any reduction in state aid payments under (b) or (c) of this section. 22 The request must be in writing and must include an analysis of the reasons and causes 23 for the district's inability to comply with the requirements of this section. The board 24 shall either grant or deny the waiver. The request must also be submitted to the 25 Legislative Budget and Audit Committee, which shall review the district's request and 26 forward the committee's recommendations on it to the board. 27  (e) The commissioner shall submit an annual report on actions taken by the 28 commissioner or the board under this section to the Legislative Budget and Audit 29 Committee by April 15 of each year. 30  (f) In this section, "instructional component" includes expenditures for teachers 31 and for pupil support services.

01 Article 3. Procedure for Payments of Public School Funding. 02  Sec. 14.17.600. Student counting periods. (a) Within two weeks after the 03 end of the 20-school-day period ending the fourth Friday in October, each district shall 04 transmit a report to the department that, under regulations adopted by the department, 05 reports its ADM for that counting period and other student count information that will 06 aid the department in making a determination of its state aid under the public school 07 funding program. If it makes the district eligible for more state aid under the program, 08 a district may transmit, within two weeks after the 20-school-day period ending the 09 second Friday in February, a similar report for that counting period. For centralized 10 correspondence study, the October report shall be based on the period from July 1 11 through the fourth Friday in October, except that summer school students shall be 12 counted as a proportionate fraction as determined by the department. The department 13 may make necessary corrections in the report submitted and shall notify the district of 14 changes made. The commissioner shall notify the governor of additional 15 appropriations the commissioner estimates to be necessary to fully finance the public 16 school funding program for the current fiscal year. 17  (b) Upon written request and for good cause shown, the commissioner may 18 permit a district to use a 20-school-day counting period other than the periods set out 19 in (a) of this section. However, a counting period approved under this subsection must 20 be 20 consecutive school days unless one or more alternate counting periods are 21 necessary to permit a district to implement flexible scheduling that meets the district's 22 needs and goals without jeopardizing the public school funding for which the district 23 would be ordinarily be eligible under this chapter. 24  Sec. 14.17.610. Distribution of public school funding. (a) The department 25 shall determine the public school funding for each school district in a fiscal year on 26 the basis of the district's student count data reported under AS 14.17.600. On or 27 before the 15th day of each of the first nine months of each fiscal year, one-twelfth 28 of each district's public school funding shall be distributed on the basis of the data 29 reported for the preceding fiscal year. On or before the 15th day of each of the last 30 three months of each fiscal year, one-third of the balance of each district's public 31 school funding shall be distributed, after the balance has been recomputed on the basis

01 of student count and other data reported for the current fiscal year. 02  (b) Distribution of public school funds under (a) of this section shall be made 03 as required under AS 14.17.410. If a district receives more public school funding than 04 it is entitled to receive under this chapter, the district shall immediately remit the 05 amount of overpayment to the commissioner, to be returned to the public school 06 account. The department may make adjustments to a district's public school funding 07 to correct underpayments made in previous fiscal years. 08  (c) Upon an adequate showing of a cash flow shortfall of a district, and in the 09 discretion of the commissioner, the department may make advance payments to a 10 district. The total of advance payments may not exceed the amount of public school 11 funding for which the district is eligible for the fiscal year. 12 Article 4. General Provisions. 13  Sec. 14.17.900. Construction and implementation of chapter. (a) This 14 chapter does not create a debt of the state. Each district shall establish, maintain, and 15 operate under a balanced budget. The state is not responsible for the debts of a school 16 district. 17  (b) Money to carry out the provisions of this chapter may be appropriated 18 annually by the legislature into the public school account. If the amount in the 19 account is insufficient to meet the allocations authorized under AS 14.17.400 - 20 14.17.470 for a fiscal year, public school funding shall be reduced according to 21 AS 14.17.400(b). 22  Sec. 14.17.910. Restrictions governing receipt and expenditure of district 23 money. (a) Each district shall maintain complete financial records of the receipt and 24 disbursement of public school funding, money acquired from local effort, and other 25 money received or held by the district. The records must be in the form required by 26 the department and are subject to audit by the department at a time and place 27 designated by the department. 28  (b) Public school funding provided under this chapter is for general operational 29 purposes of the district. All district money, including public school funding, shall be 30 received, held, allocated, and expended by the district under applicable local law and 31 state and federal constitutional provisions, statutes, and regulations, including those

01 related to ethical standards and accounting principles. 02  Sec. 14.17.920. Regulations. The department shall adopt regulations necessary 03 to implement this chapter. 04  Sec. 14.17.990. Definitions. In this chapter, unless the context requires 05 otherwise, 06  (1) "ADM or average daily membership" means the aggregate number 07 of full-time equivalent students enrolled in a school district during the student count 08 period for which a determination is being made, divided by the actual number of days 09 that school is in session for the student count period for which the determination is 10 being made; 11  (2) "district" means a city or borough school district or a regional 12 educational attendance area; 13  (3) "district adjusted ADM" means the number resulting from the 14 calculations under AS 14.17.410(b)(1); 15  (4) "district ADM" means the sum of the ADMs in a district; 16  (5) "local contribution" means appropriations and the value of in-kind 17 services made by a district; 18  (6) "public school funding" means money provided under the public 19 school funding program established in this chapter; 20  (7) "taxable real and personal property" means all real and personal 21 property taxable under the laws of the state. 22 * Sec. 3. AS 14.03.120(d) is amended to read: 23  (d) Each public school shall, by May 31 of each year, prepare a report on the 24 school's performance and the performance of the school's students. The report shall 25 be presented to parents, students, and community members at a public meeting [AND 26 FORWARDED TO THE CHIEF SCHOOL ADMINISTRATOR OF THE DISTRICT]. 27 * Sec. 4. AS 14.03.120(g) is amended to read: 28  (g) In this section, "district" has the meaning given in AS 14.17.990 29 [AS 14.17.250]. 30 * Sec. 5. AS 14.03.125(e) is amended to read: 31  (e) In this section, "district" has the meaning given in AS 14.17.990

01 [AS 14.17.250]. 02 * Sec. 6. AS 14.03.150(c) is amended to read: 03  (c) The department may not award a school construction or major maintenance 04 grant under AS 14.11 to a municipality that is a school district or a regional 05 educational attendance area that is not in compliance with (a) of this section. The 06 department shall reduce the amount of public school funding [STATE FOUNDATION 07 AID] under AS 14.17.400 [AS 14.17.021] for which a school district may qualify [,] 08 by the amount, if any, paid by the department under (b) of this section. 09 * Sec. 7. AS 14.03.160(f)(2) is amended to read: 10  (2) "district" has the meaning given in AS 14.17.990 [AS 14.17.250]. 11 * Sec. 8. AS 14.03.260(c) is amended to read: 12  (c) The charter school shall provide the financial and accounting information 13 requested by the local school board or the Department of Education [,] and shall 14 cooperate with the local school district or the department in complying with the 15 requirements of AS 14.17.910 [AS 14.17.190]. 16 * Sec. 9. AS 14.08.101 is amended by adding a new paragraph to read: 17  (11) employ a chief school administrator. 18 * Sec. 10. AS 14.08.111(3) is amended to read: 19  (3) [EMPLOY A CHIEF SCHOOL ADMINISTRATOR AND] approve 20 the employment of the professional administrators, teachers, and noncertificated 21 personnel necessary to operate its schools; 22 * Sec. 11. AS 14.09.010(b) is repealed and reenacted to read: 23  (b) A school district that enters into a contract described under (a)(1) of this 24 section shall be reimbursed for 25  (1) at least 90 percent of the cost of operating the student transportation 26 system if the transportation is provided by the school district; and 27  (2) 100 percent of the cost of operating the student transportation 28 system when the transportation is provided under a contract with the school district. 29 * Sec. 12. AS 14.11.008(b) is amended to read: 30  (b) The required participating share for a municipal school district is based on 31 the district's full value per average daily membership ( ADM ) , which is calculated

01 by dividing the full and true value of the taxable real and personal property in the 02 district, calculated as described in AS 14.17.510 [AS 14.17.025(a)(1),] by the district 03 ADM [AVERAGE DAILY MEMBERSHIP (ADM)] as defined in AS 14.17.990 04 [AS 14.17.250], for the same fiscal year for which the valuation was made. The 05 municipal district's full value per ADM determines the district's required participating 06 share, as follows: 07 Full Value Per ADM District Participating Share 08 $1 - $100,000 5 percent 09 100,001 - 200,000 10 percent 10 200,001 - 600,000 30 percent 11 over 600,000 35 percent. 12 * Sec. 13. AS 14.14.115(c)(2) is amended to read: 13  (2) "district" has the meaning given in AS 14.17.990 [AS 14.17.250]. 14 * Sec. 14. AS 14.14.130(a) is amended to read: 15  (a) A [EACH] school board may [SHALL] select and employ a qualified 16 person as the chief school administrator for the district. In this subsection, "employ" 17 includes employment by contract. 18 * Sec. 15. AS 14.14.130(b) is amended to read: 19  (b) If the district employs a [THE] chief school administrator , the 20 administrator [OF THE DISTRICT] shall administer the district in accordance with 21 the policies that the school board prescribes by bylaw. 22 * Sec. 16. AS 14.14.130(c) is amended to read: 23  (c) If the district employs a [THE] chief school administrator , the 24 administrator shall select, appoint, and otherwise control all school district employees 25 that serve under the chief school administrator subject to the approval of the school 26 board. 27 * Sec. 17. AS 14.16.020(2) is amended to read: 28  (2) [EMPLOY CHIEF SCHOOL ADMINISTRATORS AND] approve 29 the employment of [OTHER] personnel necessary to operate state boarding schools; 30 * Sec. 18. AS 14.16.050(a)(2) is amended to read: 31  (2) requirements relating to the public school funding program

01 [STATE FINANCIAL ASSISTANCE FOR EDUCATION] and the receipt and 02 expenditure of that funding [ASSISTANCE]: 03  (A) AS 14.17.500 [AS 14.17.080] (relating to student count 04 estimates); 05  (B) AS 14.17.505 [AS 14.17.082] (relating to school operating 06 fund balances); 07  (C) AS 14.17.500 - 14.17.910 [AS 14.17.160 - 14.17.220] 08 (setting out the procedure for payment of public school funding [FINANCIAL 09 ASSISTANCE,] and imposing general requirements and limits on money paid); 10 * Sec. 19. AS 14.16.080(a) is amended to read: 11  (a) AS 14.17.440 [AS 14.17.024] applies to the calculation of public school 12 funding [STATE AID] payable for operation of a state boarding school. 13 * Sec. 20. AS 14.20.025 is amended to read: 14  Sec. 14.20.025. Limited teacher certificates. Notwithstanding 15 AS 14.20.020(b), a person may be issued a limited certificate, valid only in the area 16 of expertise for which it is issued, to teach Alaska Native language or culture, military 17 science, or a vocational or technical course for which the board determines by 18 regulation that baccalaureate degree training is not sufficiently available. A limited 19 certificate may be issued under this section only if the school board of the district or 20 regional educational attendance area in which the person will be teaching 21 [, THROUGH THE CHIEF SCHOOL ADMINISTRATOR,] has requested its issuance. 22 A person who applies for a limited certificate shall demonstrate, as required by 23 regulations adopted by the board, instructional skills and subject matter expertise 24 sufficient to ensure the public that the person is competent as a teacher. The board 25 may require a person issued a limited certificate to undertake academic training as may 26 be required by the board by regulation and make satisfactory progress in the academic 27 training. 28 * Sec. 21. AS 14.20.147(a) is amended to read: 29  (a) When an attendance area is transferred from a currently operating district 30 to, or absorbed into, a new or existing school district, the teachers for the attendance 31 area also shall be transferred unless otherwise mutually agreed by the teacher or

01 teachers and the chief school administrator of the new district if the district employs 02 a chief school administrator . Accumulated or earned benefits, including [BUT NOT 03 LIMITED TO,] seniority, salary level, tenure, leave, and retirement, accompany the 04 teacher who is transferred. 05 * Sec. 22. AS 14.20.148 is amended to read: 06  Sec. 14.20.148. Intradistrict teacher reassignments. When a teacher is 07 involuntarily transferred or reassigned to a position for which the teacher is qualified, 08 within the district, the teacher's moving expenses shall be paid unless the one-way 09 driving distance is 20 miles or less from the teacher's present place of residence, or 10 unless otherwise mutually agreed by the teacher and chief school administrator of the 11 district if the district employs a chief school administrator . 12 * Sec. 23. AS 14.20.177(a) is amended to read: 13  (a) A school district may implement a layoff plan under this section if it is 14 necessary for the district to reduce the number of tenured teachers because 15  (1) school attendance in the district has decreased; or 16  (2) the state support for [BASIC NEED OF] the school district 17 determined under AS 14.17.410(b)(1) [AS 14.17.021(c) AND ADJUSTED UNDER 18 AS 14.17.225(b)] decreases by three percent or more from the previous year. 19 * Sec. 24. AS 14.30.305 is amended to read: 20  Sec. 14.30.305. State support of programs for children hospitalized or 21 confined to their homes. A child who is hospitalized or confined to home and who 22 receives at least 10 hours of special education and related services per week may be 23 counted as a pupil in average daily membership when computing state support under 24 the public school funding [FOUNDATION] program. 25 * Sec. 25. AS 14.30.347 is amended to read: 26  Sec. 14.30.347. Transportation of exceptional children. When transportation 27 is required to be provided as related services, an exceptional child [CHILDREN] shall 28 be carried with other children if the district provides transportation to other 29 children in the district [,] except when the nature of the [THEIR] physical or mental 30 disability [DISABILITIES] is such that it is in the best interest of the exceptional 31 child [CHILDREN], as determined by the school district, that the child [THEY] be

01 transported separately. State reimbursement for transportation of exceptional children 02 shall be as provided for transportation of all other pupils except that eligibility for 03 reimbursement is not subject to restriction based on the minimum distance between the 04 school and the residence of the exceptional child. 05 * Sec. 26. AS 14.30.650 is amended to read: 06  Sec. 14.30.650. Funding. Each fiscal year the department shall allocate to the 07 agency not less than $85 for each special education student in the state in average 08 daily membership or the equivalent of two percent of the funds appropriated for special 09 education for that fiscal year, whichever is greater. Money to carry out the 10 provisions of this section may be appropriated annually by the legislature. If 11 amounts are insufficient to meet the allocation authorized under this section for 12 a fiscal year, the allocation shall be reduced pro rata. The amount allocated to the 13 agency shall be reduced each fiscal year by the amount contributed by the department 14 to the Teachers' Retirement System (AS 14.25) or the Public Employees' Retirement 15 System (AS 39.35) on behalf of employees of the agency. 16 * Sec. 27. AS 14.36.030(a) is amended to read: 17  (a) A district operating a community school program under an approved plan 18 of operation may receive an annual grant from the state of one-half of one percent of 19 its public school funding [FOUNDATION SUPPORT] or $10,000, whichever is 20 greater. 21 * Sec. 28. AS 29.45.020(a) is amended to read: 22  (a) If a municipality levies and collects property taxes, the governing body 23 shall provide the following notice: 24 "NOTICE TO TAXPAYER 25 For the current fiscal year the (city)(borough) has been allocated the following amount 26 of state aid for school and municipal purposes under the applicable financial assistance 27 Acts: 28 PUBLIC SCHOOL FUNDING [FOUNDATION] 29 PROGRAM [ASSISTANCE] (AS 14.17) $ 30 STATE AID FOR RETIREMENT OF SCHOOL 31  CONSTRUCTION DEBT (AS 14.11.100) $

01 MUNICIPAL TAX RESOURCE EQUALIZATION 02  (AS 29.60.010 - 29.60.080) $ 03 PRIORITY REVENUE SHARING FOR 04  MUNICIPAL SERVICES (AS 29.60.100 - 29.60.180) $ 05 REVENUE SHARING FOR SAFE COMMUNITIES 06  (AS 29.60.350 - 29.60.375) $ 07 TOTAL AID $ 08 The millage equivalent of this state aid, based on the dollar value of a mill in the 09 municipality during the current assessment year and for the preceding assessment year, 10 is: 11 MILLAGE EQUIVALENT 12 PREVIOUS YEAR THIS YEAR 13 PUBLIC SCHOOL FUNDING 14  [FOUNDATION] PROGRAM 15  ASSISTANCE . . . . MILLS . . . . MILLS 16 STATE AID FOR RETIREMENT 17   OF SCHOOL CONSTRUCTION 18  DEBT . . . .MILLS . . . .MILLS 19 MUNICIPAL TAX RESOURCE 20  EQUALIZATION . . . .MILLS . . . .MILLS 21 PRIORITY REVENUE FOR SHARING 22 MUNICIPAL SERVICES . . . .MILLS . . . .MILLS 23 REVENUE SHARING FOR SAFE 24 COMMUNITIES . . . .MILLS . . . .MILLS 25 TOTAL MILLAGE 26 EQUIVALENT . . . .MILLS . . . .MILLS" 27 Notice shall be provided by 28  (1) [BY] furnishing a copy of the notice with tax statements mailed for 29 the fiscal year for which aid is received; or 30  (2) [BY] publishing in a newspaper of general circulation in the 31 municipality a copy of the notice once each week for a period of three successive

01 weeks, with publication to occur not later than 45 days after the final adoption of the 02 municipality's budget. 03 * Sec. 29. AS 29.60.030(d) is amended to read: 04  (d) The full and true assessed property value shall be determined by the 05 department in the manner provided for the computation of state aid to education under 06 AS 14.17.510 [AS 14.17.140]. When the determination of locally generated revenue 07 includes revenue of a utility received under AS 29.60.010(c)(1)(E), the full and true 08 assessed property value must include the computed assessed value of the utility, 09 determined by dividing the amount of the payment in place of taxes made by the 10 utility by the millage rate that would apply to the utility if the utility were subject to 11 levy and collection of taxes under AS 29.45. 12 * Sec. 30. AS 36.10.090(b) is amended to read: 13  (b) A local government or school district covered by the provisions of this 14 chapter that is found to be in violation of these provisions may be required to forfeit 15 all or part of the state aid made available for the project in which the violation occurs 16 and in addition may be denied up to 12 months of state revenue sharing or public 17 school funding [FOUNDATION MONEY]. A state department or agency head found 18 to be in violation of this chapter may be required to forfeit the position of department 19 or agency head. 20 * Sec. 31. AS 36.10.125(c) is amended to read: 21  (c) In an action brought under (b) of this section , the court may, in its 22 discretion, order denial of state revenue sharing or public school funding 23 [FOUNDATION MONEY], forfeiture of office or position, or injunctive or other 24 relief. If the court finds for the plaintiff in an action brought under (b) of this section, 25 it may award the plaintiff an amount equal to the actual costs and attorney fees 26 incurred by the plaintiff. 27 * Sec. 32. AS 44.47.305(c) is amended to read: 28  (c) A grant under (a) of this section may not exceed $50 per month for each 29 child the child care facility cares for, or for each full-time equivalent, as determined 30 by the department. The grant shall be adjusted on a geographic basis by the same 31 factor [PERCENTAGES] as funding for a school district is [INSTRUCTIONAL

01 UNIT ALLOTMENTS ARE] adjusted under AS 14.17.460 [AS 14.17.051]. 02 * Sec. 33. AS 14.16.050(a)(1)(G); AS 14.17.010, 14.17.021, 14.17.022, 14.17.024, 03 14.17.025, 14.17.026, 14.17.031, 14.17.041, 14.17.043, 14.17.045, 14.17.047, 14.17.051, 04 14.17.056, 14.17.080, 14.17.082, 14.17.140, 14.17.160, 14.17.170, 14.17.190, 14.17.200, 05 14.17.210, 14.17.220, 14.17.225, 14.17.250; and AS 14.30.315(a) are repealed. 06 * Sec. 34. TRANSITION: TRANSITION FUNDING. (a) Except as provided in (b) and 07 (c) of this section, if, for a fiscal year beginning July 1, 1998, or July 1, 1999, a city or 08 borough school district or a regional educational attendance area would receive less public 09 school funding under AS 14.17.410, enacted by sec. 2 of this Act, than the district or area 10 would have received as state aid for the fiscal year beginning July 1, 1998, the district or area 11 is eligible to receive additional public school funding equal to a percentage of the difference 12 between the state aid the district or area would have received for the fiscal year beginning 13 July 1, 1998, and the public school funding the district or area is eligible to receive under 14 AS 14.17.410, enacted by sec. 2 of this Act, according to the following table: 15 For the fiscal year beginning Percentage of difference 16 July 1, 1998 75 17 July 1, 1999 50. 18 (b) A city or borough school district is not eligible for additional funding authorized 19 under (a) of this section unless, during the fiscal year beginning July 1, 1997, the district 20 received the local contribution described under AS 14.17.025(a)(1), as that provision existed 21 on the day before the effective date of this Act. 22 (c) For the purposes of the reduction required under AS 14.17.400(b), enacted by sec. 23 2 of this Act, transition funding authorized under (a) of this section is treated the same as the 24 state share of public school funding under AS 14.17.410, enacted by sec. 2 of this Act. 25 (d) For purposes of this section, "state aid" means state foundation aid distributed 26 under the provisions of AS 14.17, if those provisions had not been repealed by this Act, and 27 additional district support appropriated by the legislature. 28 * Sec. 35. TRANSITION: REGULATIONS. (a) To the extent the regulations are not 29 inconsistent with the language and purposes of this Act, regulations relating to state aid for 30 public schools adopted by the Department of Education before the effective date of this 31 section remain in effect as valid regulations implementing this Act; all other regulations

01 relating to state aid for public schools adopted by the Department of Education before the 02 effective date of this section are annulled. The Department of Education may administer and 03 enforce those previously adopted regulations relating to state foundation aid for public schools. 04 (b) The Department of Education shall, by regulation, define the term "school" for 05 purposes of AS 14.17. 06 * Sec. 36. TRANSITION: PROPOSED DISTRICT COST FACTORS. The Department 07 of Education shall submit the initial proposed district cost factors, required under 08 AS 14.17.460(b), enacted in sec. 2 of this Act, to the Alaska State Legislature by January 15, 09 2001. 10 * Sec. 37. TRANSITION: BASE STUDENT ALLOCATION. Notwithstanding 11 AS 14.17.470, enacted in sec. 2 of this Act, the base student allocation is as follows: 12 For the fiscal year beginning Base student allocation 13 July 1, 1998 $3,855 14 July 1, 1999 $3,888. 15 * Sec. 38. TRANSITION: SMALL SCHOOLS. For purposes of determining the school 16 size factor under AS 14.17.450, enacted under sec. 2 of this Act, the students in a school 17 smaller than 10 ADM on the effective date of this section shall be included in the largest 18 school in the district existing on the effective date of this section. 19 * Sec. 39. TRANSITION: MINIMUM EXPENDITURE FOR INSTRUCTION. 20 Notwithstanding AS 14.17.520, enacted in sec. 2 of this Act, the minimum expenditure for the 21 instructional component of the school district budget is as follows: 22 For the fiscal year beginning Minimum expenditure 23 July 1, 1998 60 percent 24 July 1, 1999 65 percent. 25 * Sec. 40. This Act takes effect July 1, 1998.