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CSSB 146(HES): "An Act relating to the public school funding program; relating to the definition of a school district, to the transportation of students, to school district layoff plans, to the special education service agency, and to the child care grant program; imposing an employment tax in the unorganized borough as a local contribution to public schools; and providing for an effective date."

00CS FOR SENATE BILL NO. 146(HES) 01 "An Act relating to the public school funding program; relating to the definition 02 of a school district, to the transportation of students, to school district layoff 03 plans, to the special education service agency, and to the child care grant 04 program; imposing an employment tax in the unorganized borough as a local 05 contribution to public schools; and providing for an effective date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. PURPOSE OF SECTION 2. The purpose of sec. 2 of this Act is to provide 08 a level of funding through the public school funding program that allows for an equitable level 09 of educational opportunities for those students attending the public schools of the state. 10 * Sec. 2. AS 14.17 is amended by adding new sections to read: 11 Article 1. State Funding to Public Schools. 12  Sec. 14.17.300. Public school account. (a) The public school account is 13 established. The account consists of appropriations for distribution to school districts, 14 the state boarding school, and for centralized correspondence study under this chapter.

01  (b) The money in the account may be used only in aid of public schools, 02 including community school programs, and for centralized correspondence study 03 programs under this chapter. 04  Sec. 14.17.400. State funding for districts. (a) The state funding for which 05 a school district is eligible in a fiscal year is equal to the amount for which a district 06 qualifies under AS 14.17.410. 07  (b) If the amount in the public school account is insufficient to meet the 08 amounts authorized under (a) of this section for a fiscal year, the department shall 09 reduce pro rata the state share of public school funding for which districts are eligible 10 by the necessary percentage as determined by the department. If the state share of 11 public school funding is reduced under this subsection, the department shall also 12 reduce state funding for centralized correspondence study and the state boarding school 13 by the same percentage. 14  Sec. 14.17.410. Public school funding. (a) A district is eligible for public 15 school funding in an amount equal to the sum calculated under (b) and (c) of this 16 section. 17  (b) Public school funding consists of a state share and a local contribution, 18 determined as follows: 19  (1) the state share equals state support minus local contribution; state 20 support equals the product obtained under (D) of this paragraph, multiplied by the base 21 student allocation set out at AS 14.17.475, plus any intensive services funding for 22 which the district qualifies under AS 14.17.420(a)(2); district adjusted ADM is 23 calculated as follows: 24  (A) the ADM of a funding community is multiplied by the 25 funding community size factor set out in AS 14.17.460; 26  (B) the product obtained under (A) of this paragraph is 27 multiplied by the funding community area cost factor described in 28 AS 14.17.470; 29  (C) if a funding community is the only funding community in 30 a district with an ADM of 900 or less, the product obtained under (B) of this 31 paragraph is multiplied by the appropriate factor set out in AS 14.17.460(b);

01  (D) the ADMs of each funding community in a district, as 02 adjusted according to (A) - (C) of this paragraph, are added; the sum is then 03 multiplied by the special needs factor set out in AS 14.17.420(a)(1); 04  (2) the local contribution of a city or borough school district is the 05 equivalent of a three mill tax levy on the full and true value of the taxable real and 06 personal property in the district as of January 1 of the second preceding fiscal year, 07 as determined by the Department of Community and Regional Affairs under 08 AS 14.17.510 and AS 29.45.110, not to exceed 100 percent of a district's state support 09 as determined under (1) of this subsection for the preceding fiscal year; 10  (3) the local contribution of a regional educational attendance area is 11 equal to the employment tax imposed under AS 43.42 that is collected from 12 individuals employed in the regional educational attendance area in the previous fiscal 13 year. 14  (c) In a district that receives a state share under (b) of this section, public 15 school funding includes assessment normalization funding determined by the following 16 formula: funding = Si/Sv - ((D/Bi) x Bs). In this subsection, 17  (1) "Bi" means the full and true value of the taxable real and personal 18 property in the state as of January 1 of the second preceding fiscal year, as determined 19 by the Department of Community and Regional Affairs under AS 14.17.510 and 20 AS 29.45.110; 21  (2) "Bs" means the equivalent of a three mill tax levy on the full and 22 true value of the taxable real and personal property in the state as of January 1 of the 23 second preceding fiscal year, as determined by the Department of Community and 24 Regional Affairs under AS 14.17.510 and AS 29.45.110; 25  (3) "D" means the full and true value of the taxable real and personal 26 property in the district as of January 1 of the second preceding fiscal year, as 27 determined by the Department of Community and Regional Affairs under 28 AS 14.17.510 and AS 29.45.110, except that, in a regional educational attendance area, 29 "D" equals zero; 30  (4) "Si" means the district's adjusted ADM; 31  (5) "Sv" means the statewide adjusted ADM multiplied by Bs.

01  (d) In the fiscal year following the fiscal year of collection, a regional 02 educational attendance area is, subject to appropriation, entitled to receive money 03 collected under AS 43.42 in that regional educational attendance area. 04  (e) Public school funding may not be provided to a school district if the local 05 contributions required under (b)(2) of this section have not been made. 06  Sec. 14.17.420. Special needs and intensive services funding. (a) As a 07 component of public school funding, a district is eligible for special needs funding and 08 may be eligible for intensive services funding as follows: 09  (1) special needs funding is available to a district to assist the district 10 in providing special education, gifted and talented education, vocational education, and 11 bilingual education to its students; a special needs funding factor of 1.20 shall be 12 applied as set out in AS 14.17.410(b)(1); 13  (2) in addition to the special needs funding for which a district is 14 eligible under (1) of this subsection, a district is eligible for intensive services funding 15 for each special education student who needs and receives intensive services and is 16 enrolled on the last day of the count period; for each such student, intensive services 17 funding is equal to $22,500 multiplied by the area cost factor of the funding 18 community in which the student is enrolled. 19  (b) A district is not eligible to receive funding under (a) of this section unless 20 the district has on file with the department a plan that indicates the special education, 21 gifted and talented education, vocational education, and bilingual education services 22 that will be provided to students. 23  (c) In this section, "intensive services" has the meaning given by the 24 department by regulation adopted under AS 14.30.180 - 14.30.350. 25  Sec. 14.17.430. State funding for correspondence study. Except as provided 26 in AS 14.17.400(b), funding for the state centralized correspondence study program or 27 a district that offers a statewide correspondence study program includes an allocation 28 from the public school account in an amount calculated by multiplying the ADM of 29 the correspondence program by the base student allocation and multiplying that product 30 by 65 percent. 31  Sec. 14.17.435. State funding for state boarding school. Except as provided

01 in AS 14.17.400(b), funding for the state boarding school established under 02 AS 14.16.010 includes an allocation from the public school account in an amount 03 calculated by multiplying the ADM of the state boarding school by the special needs 04 factor in AS 14.17.420(a)(1) and multiplying that product by the base student 05 allocation. The state boarding school is also eligible for intensive services funding 06 under AS 14.17.420(a)(2). 07  Sec. 14.17.440. Local contribution. (a) The required local contribution to 08 a school district is a district's local contribution as calculated according to 09 AS 14.17.410(b)(2) and (3). 10  (b) Nothing in this section prohibits a city or borough from contributing to its 11 district amounts in excess of the local contribution required under this section if the 12 local contribution is also in compliance with federal law. 13  Sec. 14.17.450. Funding communities. The department shall adopt 14 regulations defining funding communities within each district that reflect geographic 15 and attendance area factors. The regulations may not allow for funding communities 16 smaller than 10 ADM. 17  Sec. 14.17.460. Funding community size factor. (a) For purposes of 18 calculating a district's adjusted ADM to determine public school funding, the ADM 19 of each funding community in a district shall be multiplied by a funding community 20 size factor as set out in the following table: 21 ADM Funding Community Size Factor 22 10 - 20 2.75 23 21 - 40 2.20 24 41 - 80 1.90 25 81 - 160 1.55 26 161 - 360 1.40 27 361 - 1,000 1.10 28 over 1,000 1.00. 29  (b) For a district that consists of one funding community with an ADM of 900 30 or less, the district ADM shall be multiplied according to AS 14.17.410(b)(1) by the 31 appropriate factor as set out in the following table:

01 ADM Factor 02 1 - 250 1.12 03 251 - 525 1.08 04 526 - 900 1.06 05  Sec. 14.17.470. Area cost factors. For purposes of calculating a district's 06 adjusted ADM under AS 14.17.410(b)(1), the area cost factor for a funding community 07 in a school district is as follows: 08 DISTRICT FUNDING COMMUNITY AREA COST FACTOR 09 Alaska Gateway Alcan Border 1.14 10 Alaska Gateway Dot Lake 1.14 11 Alaska Gateway Eagle 1.14 12 Alaska Gateway Mentasta 1.14 13 Alaska Gateway Northway 1.14 14 Alaska Gateway Tanacross 1.14 15 Alaska Gateway Tetlin 1.14 16 Alaska Gateway Tok 1.14 17 Aleutians East Akutan 1.32 18 Aleutians East Cold Bay 1.32 19 Aleutians East False Pass 1.32 20 Aleutians East King Cove 1.32 21 Aleutians East Nelson Lagoon 1.32 22 Aleutians East Sand Point 1.32 23 Aleutians Region Atka 1.32 24 Alyeska Central School Alyeska Central School 1.00 25 Anchorage Anchorage 1.00 26 Anchorage Eagle River 1.00 27 Anchorage Girdwood 1.00 28 Annette Island Annette 1.05 29 Bering Strait Brevig Mission 1.40 30 Bering Strait Diomede 1.45 31 Bering Strait Elim 1.40

01 Bering Strait Gambell 1.55 02 Bering Strait Golovin 1.40 03 Bering Strait Koyuk 1.40 04 Bering Strait Savoonga 1.45 05 Bering Strait Shaktoolik 1.40 06 Bering Strait Shishmaref 1.40 07 Bering Strait St. Michael 1.40 08 Bering Strait Stebbins 1.40 09 Bering Strait Teller 1.40 10 Bering Strait Unalakleet 1.40 11 Bering Strait Wales 1.40 12 Bering Strait White Mountain 1.40 13 Bristol Bay Bristol Bay 1.40 14 Bristol Bay South Naknek 1.40 15 Chatham Angoon 1.05 16 Chatham Cube Cove 1.05 17 Chatham Elfin Cove 1.05 18 Chatham Gustavus 1.05 19 Chatham Hobart Bay 1.05 20 Chatham Klukwan 1.05 21 Chatham Tenakee Springs 1.05 22 Chugach Chenega Bay 1.14 23 Chugach Icy Bay 1.14 24 Chugach Tatitlek 1.14 25 Chugach Whittier 1.05 26 Chugach Yakataga 1.14 27 Copper River Chistochina 1.05 28 Copper River Copper Center 1.05 29 Copper River Gakona 1.05 30 Copper River Glennallen 1.05 31 Copper River Kenny Lake 1.05

01 Copper River Lottie Sparks 1.05 02 Copper River Slana 1.05 03 Cordova Cordova 1.14 04 Craig Craig 1.05 05 Delta/Greely Delta Junction 1.14 06 Delta/Greely Healy Lake 1.14 07 Denali Anderson 1.14 08 Denali Cantwell 1.14 09 Denali Healy 1.14 10 Dillingham Dillingham 1.32 11 Fairbanks Eielson 1.00 12 Fairbanks Fairbanks 1.00 13 Fairbanks North Pole 1.00 14 Fairbanks Salcha 1.05 15 Fairbanks Two Rivers 1.05 16 Galena Galena 1.32 17 Haines Haines 1.05 18 Haines Mosquito Lake 1.05 19 Hoonah Hoonah 1.05 20 Hydaburg Hydaburg 1.05 21 Iditarod Anvik 1.32 22 Iditarod Grayling 1.32 23 Iditarod Holy Cross 1.32 24 Iditarod Lake Minchumina 1.32 25 Iditarod Lime Village 1.32 26 Iditarod McGrath 1.32 27 Iditarod Nikolai 1.32 28 Iditarod Shageluk 1.32 29 Iditarod Takotna 1.32 30 Iditarod Telida 1.32 31 Juneau Juneau 1.00

01 Kake Kake 1.05 02 Kashunamiut Chevak 1.32 03 Kenai Peninsula Anchor Point 1.00 04 Kenai Peninsula Cooper Landing 1.00 05 Kenai Peninsula Homer 1.00 06 Kenai Peninsula Hope 1.00 07 Kenai Peninsula Kachemak Selo 1.05 08 Kenai Peninsula Kasilof 1.00 09 Kenai Peninsula Kenai 1.00 10 Kenai Peninsula McNeil Canyon 1.00 11 Kenai Peninsula Moose Pass 1.00 12 Kenai Peninsula Nanwalek 1.05 13 Kenai Peninsula Nikiski 1.00 14 Kenai Peninsula Nikolaevsk 1.05 15 Kenai Peninsula Ninilchik 1.00 16 Kenai Peninsula Port Graham 1.05 17 Kenai Peninsula Razdolna 1.05 18 Kenai Peninsula Seldovia 1.05 19 Kenai Peninsula Seward 1.00 20 Kenai Peninsula Soldotna 1.00 21 Kenai Peninsula Sterling 1.00 22 Kenai Peninsula Tyonek 1.05 23 Kenai Peninsula Voznesenka 1.05 24 Ketchikan Ketchikan 1.00 25 Klawock Klawock 1.05 26 Kodiak Island Akhiok 1.14 27 Kodiak Island Big Sandy Lake 1.14 28 Kodiak Island Chiniak 1.05 29 Kodiak Island Danger Bay 1.14 30 Kodiak Island Karluk 1.14 31 Kodiak Island Kodiak 1.05

01 Kodiak Island Larsen Bay 1.14 02 Kodiak Island Old Harbor 1.14 03 Kodiak Island Ouzinkie 1.14 04 Kodiak Island Port Lions 1.14 05 Kuspuk Aniak 1.32 06 Kuspuk Chuathbaluk 1.32 07 Kuspuk Crooked Creek 1.32 08 Kuspuk Lower Kalskag 1.32 09 Kuspuk Red Devil 1.32 10 Kuspuk Sleetmute 1.32 11 Kuspuk Stony River 1.32 12 Kuspuk Upper Kalskag 1.32 13 Lake and Peninsula Chignik Bay 1.32 14 Lake and Peninsula Chignik Lagoon 1.32 15 Lake and Peninsula Chignik Lake 1.32 16 Lake and Peninsula Egegik 1.32 17 Lake and Peninsula Igiugig 1.32 18 Lake and Peninsula Ivanof Bay 1.32 19 Lake and Peninsula Kokhanok 1.32 20 Lake and Peninsula Levelok 1.32 21 Lake and Peninsula Newhalen 1.32 22 Lake and Peninsula Nondalton 1.32 23 Lake and Peninsula Pedro Bay 1.32 24 Lake and Peninsula Perryville 1.32 25 Lake and Peninsula Pilot Point 1.32 26 Lake and Peninsula Port Alsworth 1.32 27 Lake and Peninsula Port Heiden 1.32 28 Lower Kuskokwim Akiuk 1.32 29 Lower Kuskokwim Akula 1.32 30 Lower Kuskokwim Atmautlauk 1.32 31 Lower Kuskokwim Bethel 1.32

01 Lower Kuskokwim Chefornak 1.32 02 Lower Kuskokwim Eek 1.32 03 Lower Kuskokwim Goodnews Bay 1.32 04 Lower Kuskokwim Kipnuk 1.32 05 Lower Kuskokwim Kongiganak 1.32 06 Lower Kuskokwim Kwethluk 1.32 07 Lower Kuskokwim Kwigillingok 1.32 08 Lower Kuskokwim Mekoryuk 1.40 09 Lower Kuskokwim Napakiak 1.32 10 Lower Kuskokwim Napaskiak 1.32 11 Lower Kuskokwim Newtok 1.32 12 Lower Kuskokwim Nightmute 1.32 13 Lower Kuskokwim Nunapitchuk 1.32 14 Lower Kuskokwim Oscarville 1.32 15 Lower Kuskokwim Platinum 1.32 16 Lower Kuskokwim Quinhagak 1.32 17 Lower Kuskokwim Toksook Bay 1.32 18 Lower Kuskokwim Tuntutuliak 1.32 19 Lower Kuskokwim Tununak 1.32 20 Lower Yukon Alakanak 1.32 21 Lower Yukon Emmonak 1.32 22 Lower Yukon Hooper Bay 1.32 23 Lower Yukon Kotlik 1.32 24 Lower Yukon Marshall 1.32 25 Lower Yukon Mountain Village 1.32 26 Lower Yukon Pilot Station 1.32 27 Lower Yukon Pitkas Point 1.32 28 Lower Yukon Russian Mission 1.32 29 Lower Yukon Scammon Bay 1.32 30 Lower Yukon Sheldon Point 1.32 31 Matanuska-Susitna Beryozava 1.05

01 Matanuska-Susitna Big Lake 1.00 02 Matanuska-Susitna Butte 1.00 03 Matanuska-Susitna Colony 1.00 04 Matanuska-Susitna Glacier View 1.00 05 Matanuska-Susitna Houston 1.00 06 Matanuska-Susitna Mat-Su Valley 1.00 07 Matanuska-Susitna Palmer 1.00 08 Matanuska-Susitna Pt. McKenzie 1.00 09 Matanuska-Susitna Skwentna 1.05 10 Matanuska-Susitna Sutton 1.00 11 Matanuska-Susitna Talkeetna 1.00 12 Matanuska-Susitna Trapper Creek 1.00 13 Matanuska-Susitna Wasilla 1.00 14 Matanuska-Susitna Willow 1.00 15 Mt. Edgecumbe Mt. Edgecumbe 1.00 16 Nenana Nenana 1.14 17 Nome Nome 1.32 18 North Slope Anaktuvuk Pass 1.45 19 North Slope Atqasuk 1.45 20 North Slope Barrow 1.45 21 North Slope Kaktovik 1.45 22 North Slope Nuiqsut 1.45 23 North Slope Point Hope 1.45 24 North Slope Point Lay 1.45 25 North Slope Wainwright 1.45 26 Northwest Arctic Ambler 1.45 27 Northwest Arctic Buckland 1.45 28 Northwest Arctic Deering 1.45 29 Northwest Arctic Kiana 1.45 30 Northwest Arctic Kivalina 1.45 31 Northwest Arctic Kobuk 1.45

01 Northwest Arctic Kotzebue 1.45 02 Northwest Arctic Noatak 1.45 03 Northwest Arctic Noorvik 1.45 04 Northwest Arctic Selawik 1.45 05 Northwest Arctic Shungnak 1.45 06 Pelican Pelican 1.05 07 Petersburg Petersburg 1.00 08 Pribilof St. George 1.40 09 Pribilof St. Paul 1.40 10 Sitka Sitka 1.00 11 Skagway Skagway 1.05 12 Southeast Island Craik 1.05 13 Southeast Island Edna Bay 1.05 14 Southeast Island Hollis 1.05 15 Southeast Island Howard Valentine 1.05 16 Southeast Island Jr. Gildersleeve 1.05 17 Southeast Island Kasaan 1.05 18 Southeast Island Naukati 1.05 19 Southeast Island Polk Inlet 1.05 20 Southeast Island Port Alexander 1.05 21 Southeast Island Port Protection 1.05 22 Southeast Island Thorne Bay 1.05 23 Southeast Island Whale Pass 1.05 24 Southwest Region Aleknagik North 1.32 25 Southwest Region Clarks Point 1.32 26 Southwest Region Ekwok 1.32 27 Southwest Region Koliganek 1.32 28 Southwest Region Manokotak 1.32 29 Southwest Region New Stuyahok 1.32 30 Southwest Region Portage 1.32 31 Southwest Region Togiak 1.32

01 Southwest Region Twin Hills 1.32 02 St. Mary's St. Mary's 1.32 03 Tanana Tanana 1.40 04 Unalaska Unalaska 1.32 05 Valdez Valdez 1.05 06 Wrangell Wrangell 1.00 07 Yakutat Yakutat 1.14 08 Yukon Flats Arctic Village 1.45 09 Yukon Flats Beaver 1.45 10 Yukon Flats Birch Creek 1.45 11 Yukon Flats Central 1.32 12 Yukon Flats Chalkyitsik 1.45 13 Yukon Flats Circle 1.32 14 Yukon Flats Fort Yukon 1.45 15 Yukon Flats Northern Lights 1.32 16 Yukon Flats Rampart 1.45 17 Yukon Flats Stevens Village 1.45 18 Yukon Flats Venetie 1.45 19 Yukon/Koyukuk Allakaket 1.40 20 Yukon/Koyukuk Bettles 1.40 21 Yukon/Koyukuk Hughes 1.40 22 Yukon/Koyukuk Huslia 1.40 23 Yukon/Koyukuk Kaltag 1.40 24 Yukon/Koyukuk Koyukuk 1.40 25 Yukon/Koyukuk Manley Hot Springs 1.40 26 Yukon/Koyukuk Minto 1.32 27 Yukon/Koyukuk Nulato 1.40 28 Yukon/Koyukuk Ruby 1.40 29 Yupiit Akiachak 1.32 30 Yupiit Akiak 1.32 31 Yupiit Tuluksak 1.32

01  Sec. 14.17.475. Base student allocation. (a) The base student allocation is 02 $4,020. 03  (b) The department shall prepare and submit to the legislature by January 15 04 of each fiscal year a proposed base student allocation. In determining the proposed 05 base student allocation, the department shall consider cost-of-living changes as 06 measured by the Anchorage Consumer Price Index for all urban consumers. 07 Article 2. Preparation of Public School Funding Budget. 08  Sec. 14.17.500. Student count estimate. (a) A district shall prepare and 09 submit to the department by November 5 of each fiscal year, in the manner and on 10 forms prescribed by the department, an estimate of its ADM and other student count 11 data for the succeeding fiscal year upon which computations can be made to estimate 12 the amount of public school funding for which the district may be eligible under 13 AS 14.17.400 in the succeeding fiscal year. In making its report, the district shall 14 consider its ADM, other student count data, the pattern of growth or decline of the 15 student population in preceding years, and other pertinent information available to the 16 district. 17  (b) Part-time students and district correspondence students shall be included 18 in the student count data in accordance with regulations adopted by the department. 19  Sec. 14.17.505. Fund balance in school operating fund. (a) A district may 20 not accumulate in a fiscal year an unreserved portion of its year-end fund balance in 21 its school operating fund, as defined by department regulations, that is greater than 10 22 percent of its expenditures for that fiscal year. 23  (b) The department shall review each district's annual audit under AS 14.14.050 24 for the preceding fiscal year to ascertain its year-end operating fund balance. The 25 amount by which the unreserved portion of that balance exceeds the amount permitted 26 in (a) of this section shall be deducted from the public school funding that would 27 otherwise be paid to the district in the current fiscal year. 28  Sec. 14.17.510. Determination of full and true value by Department of 29 Community and Regional Affairs. (a) To determine the amount of required local 30 contribution under AS 14.17.440 and to aid the department and the legislature in 31 planning, the Department of Community and Regional Affairs, in consultation with the

01 assessor for each district in a city or borough, shall determine the full and true value 02 of the taxable real and personal property in each district in a city or borough. If there 03 is no local assessor or current local assessment for a city or borough school district, 04 then the Department of Community and Regional Affairs shall make the determination 05 of full and true value from information available. In making the determination, the 06 Department of Community and Regional Affairs shall be guided by AS 29.45.110. 07 The determination of full and true value shall be made by October 1 and sent by 08 certified mail, return receipt requested, on or before that date to the president of the 09 school board in each city or borough school district. Duplicate copies shall be sent to 10 the commissioner. The governing body of a city or borough that is a school district 11 may obtain judicial review of the determination. The superior court may modify the 12 determination of the Department of Community and Regional Affairs only upon a 13 finding of abuse of discretion or upon a finding that there is no substantial evidence 14 to support the determination. 15  (b) Motor vehicles subject to the motor vehicle registration tax under 16 AS 28.10.431 shall be treated as taxable property under this section. 17 Article 3. Procedure for Payments of Public School Funding. 18  Sec. 14.17.600. Student counting periods. (a) Within two weeks after the 19 end of the 20-school-day period ending the fourth Friday in October, each district shall 20 transmit a report to the department that, under regulations adopted by the department, 21 reports its ADM for that counting period and other student count information that will 22 aid the department in making a determination of its state aid under the public school 23 funding program. If it makes the district eligible for more state aid under the program, 24 a district may transmit, within two weeks after the 20-school-day period ending the 25 second Friday in February, a similar report for that counting period. For centralized 26 correspondence study, the October report shall be based on the period from July 1 27 through the fourth Friday in October, except that summer school students shall be 28 counted as a proportionate fraction as determined by the department. The department 29 may make necessary corrections in the report submitted and shall notify the district of 30 changes made. The commissioner shall notify the governor of additional 31 appropriations the commissioner estimates to be necessary to fully finance the public

01 school funding program for the current fiscal year. 02  (b) Upon written request and for good cause shown, the commissioner may 03 permit a district to use a 20-school-day counting period other than the periods set out 04 in (a) of this section. However, a counting period approved under this subsection must 05 be 20 consecutive school days unless one or more alternate counting periods are 06 necessary to permit a district to implement flexible scheduling that meets the district's 07 needs and goals without jeopardizing the public school funding for which the district 08 would be ordinarily be eligible under this chapter. 09  Sec. 14.17.610. Distribution of public school funding. (a) The department 10 shall determine the public school funding for each school district in a fiscal year on 11 the basis of the district's student count data reported under AS 14.17.600. On or 12 before the 15th day of each of the first nine months of each fiscal year, one-twelfth 13 of each district's public school funding shall be distributed on the basis of the data 14 reported for the preceding fiscal year. On or before the 15th day of each of the last 15 three months of each fiscal year, one-third of the balance of each district's public 16 school funding shall be distributed, after the balance has been recomputed on the basis 17 of student count and other data reported for the current fiscal year. 18  (b) Distribution of public school funds under (a) of this section shall be made 19 as required under AS 14.17.410. If a district receives more public school funding than 20 it is entitled to receive under this chapter, the district shall immediately remit the 21 amount of overpayment to the commissioner, to be returned to the public school 22 account. 23  (c) Upon an adequate showing of a cash flow shortfall of a district, and in the 24 discretion of the commissioner, the department may make advance payments to a 25 district. The total of advance payments may not exceed the amount of public school 26 funding for which the district is eligible for the fiscal year. 27 Article 4. General Provisions. 28  Sec. 14.17.900. Construction and implementation of chapter. (a) This 29 chapter does not create a debt of the state. Each district shall establish, maintain, and 30 operate under a balanced budget. The state is not responsible for the debts of a school 31 district.

01  (b) Money to carry out the provisions of this chapter may be appropriated 02 annually by the legislature into the public school account. If the amount in the 03 account is insufficient to meet the allocations authorized under AS 14.17.400 - 04 14.17.475 for a fiscal year, public school funding shall be reduced according to 05 AS 14.17.400(b). 06  Sec. 14.17.910. Restrictions governing receipt and expenditure of district 07 money. (a) Each district shall maintain complete financial records of the receipt and 08 disbursement of public school funding, money acquired from local effort, and other 09 money received or held by the district. The records must be in the form required by 10 the department and are subject to audit by the department at a time and place 11 designated by the department. 12  (b) Public school funding provided under this chapter is for general operational 13 purposes of the district. All district money, including public school funding, shall be 14 received, held, allocated, and expended by the district under applicable local law and 15 state and federal constitutional provisions, statutes, and regulations, including those 16 related to ethical standards and accounting principles. 17  Sec. 14.17.920. Regulations. The department shall adopt regulations to 18 interpret and implement this chapter. 19  Sec. 14.17.990. Definitions. In this chapter, unless the context requires 20 otherwise, 21  (1) "ADM or average daily membership" means the aggregate number 22 of full-time equivalent students enrolled in a funding community during the student 23 count period for which a determination is being made, divided by the actual number 24 of days that school is in session for the student count period for which the 25 determination is being made; 26  (2) "district" means a city or borough school district or a regional 27 educational attendance area; 28  (3) "district adjusted ADM" means the number resulting from the 29 calculations under AS 14.17.410(b)(1); 30  (4) "district ADM" means the sum of the ADMs in a district; 31  (5) "local contribution" means appropriations and the value of in-kind

01 services made by a city or borough to its district or money collected under AS 43.42 02 in the relevant regional educational attendance area; 03  (6) "public school funding" means money provided under the public 04 school funding program established in this chapter; 05  (7) "taxable real and personal property" means all real and personal 06 property taxable under the laws of the state. 07 * Sec. 3. AS 14.03.120(g) is amended to read: 08  (g) In this section, "district" has the meaning given in AS 14.17.990 09 [AS 14.17.250]. 10 * Sec. 4. AS 14.03.125(e) is amended to read: 11  (e) In this section, "district" has the meaning given in AS 14.17.990 12 [AS 14.17.250]. 13 * Sec. 5. AS 14.03.150(c) is amended to read: 14  (c) The department may not award a school construction or major maintenance 15 grant under AS 14.11 to a municipality that is a school district or a regional 16 educational attendance area that is not in compliance with (a) of this section. The 17 department shall reduce the amount of public school funding [STATE FOUNDATION 18 AID] under AS 14.17.400 [AS 14.17.021] for which a school district may qualify [,] 19 by the amount, if any, paid by the department under (b) of this section. 20 * Sec. 6. AS 14.03.160(f)(2) is amended to read: 21  (2) "district" has the meaning given in AS 14.17.990 [AS 14.17.250]. 22 * Sec. 7. AS 14.03.260(c) is amended to read: 23  (c) The charter school shall provide the financial and accounting information 24 requested by the local school board or the Department of Education [,] and shall 25 cooperate with the local school district or the department in complying with the 26 requirements of AS 14.17.910 [AS 14.17.190]. 27 * Sec. 8. AS 14.11.008(b) is amended to read: 28  (b) The required participating share for a municipal school district is based on 29 the district's full value per average daily membership ( ADM ) , which is calculated 30 by dividing the full and true value of the taxable real and personal property in the 31 district, calculated as described in AS 14.17.510 [AS 14.17.025(a)(1),] by the district

01 ADM [AVERAGE DAILY MEMBERSHIP (ADM)] as defined in AS 14.17.990 02 [AS 14.17.250], for the same fiscal year for which the valuation was made. The 03 municipal district's full value per ADM determines the district's required participating 04 share, as follows: 05 Full Value Per ADM District Participating Share 06 $1 - $100,000 5 percent 07 100,001 - 200,000 10 percent 08 200,001 - 600,000 30 percent 09 over 600,000 35 percent. 10 * Sec. 9. AS 14.14.115(c)(2) is amended to read: 11  (2) "district" has the meaning given in AS 14.17.990 [AS 14.17.250]. 12 * Sec. 10. AS 14.16.050(a)(2) is amended to read: 13  (2) requirements relating to the public school funding program 14 [STATE FINANCIAL ASSISTANCE FOR EDUCATION] and the receipt and 15 expenditure of that funding [ASSISTANCE]: 16  (A) AS 14.17.500 [AS 14.17.080] (relating to student count 17 estimates); 18  (B) AS 14.17.505 [AS 14.17.082] (relating to school operating 19 fund balances); 20  (C) AS 14.17.500 - 14.17.910 [AS 14.17.160 - 14.17.220] 21 (setting out the procedure for payment of public school funding [FINANCIAL 22 ASSISTANCE,] and imposing general requirements and limits on money paid); 23 * Sec. 11. AS 14.16.080(a) is amended to read: 24  (a) AS 14.17.435 [AS 14.17.024] applies to the calculation of public school 25 funding [STATE AID] payable for operation of a state boarding school. 26 * Sec. 12. AS 14.20.177(a) is amended to read: 27  (a) A school district may implement a layoff plan under this section if it is 28 necessary for the district to reduce the number of tenured teachers because 29  (1) school attendance in the district has decreased; [OR] 30  (2) the state support for [BASIC NEED OF] the school district 31 determined under AS 14.17.410(b)(1) [AS 14.17.021(c) AND ADJUSTED UNDER

01 AS 14.17.225(b)] decreases by three percent or more from the previous year ; or 02  (3) the state share of public school funding is reduced under 03 AS 14.17.400(b) by three percent or more in a fiscal year . 04 * Sec. 13. AS 14.30.305 is amended to read: 05  Sec. 14.30.305. State support of programs for children hospitalized or 06 confined to their homes. A child who is hospitalized or confined to home and who 07 receives at least 10 hours of special education and related services per week may be 08 counted as a pupil in average daily membership when computing state support under 09 the public school funding [FOUNDATION] program. 10 * Sec. 14. AS 14.30.347 is amended to read: 11  Sec. 14.30.347. Transportation of exceptional children. When transportation 12 is required to be provided as related services, an exceptional child [CHILDREN] shall 13 be carried with other children if the district provides transportation to other 14 children in the district [,] except when the nature of the [THEIR] physical or mental 15 disability [DISABILITIES] is such that it is in the best interest of the exceptional 16 child [CHILDREN], as determined by the school district, that the child [THEY] be 17 transported separately. State reimbursement for transportation of exceptional children 18 shall be as provided for transportation of all other pupils except that eligibility for 19 reimbursement is not subject to restriction based on the minimum distance between the 20 school and the residence of the exceptional child. 21 * Sec. 15. AS 14.30.650 is amended to read: 22  Sec. 14.30.650. Funding. Each fiscal year the department shall allocate to the 23 agency not less than $470 [$85] for each special education student in the state 24 included in the federal count of special education students in the state made in the 25 second preceding fiscal year, excluding students reported as learning disabled and 26 speech impaired [IN AVERAGE DAILY MEMBERSHIP OR THE EQUIVALENT 27 OF TWO PERCENT OF THE FUNDS APPROPRIATED FOR SPECIAL 28 EDUCATION FOR THAT FISCAL YEAR, WHICHEVER IS GREATER]. The 29 amount allocated to the agency shall be reduced each fiscal year by the amount 30 contributed by the department to the Teachers' Retirement System (AS 14.25) or the 31 Public Employees' Retirement System (AS 39.35) on behalf of employees of the

01 agency. 02 * Sec. 16. AS 14.36.030(a) is amended to read: 03  (a) A district operating a community school program under an approved plan 04 of operation may receive an annual grant from the state of one-half of one percent of 05 its public school funding [FOUNDATION SUPPORT] or $10,000, whichever is 06 greater. 07 * Sec. 17. AS 29.45.020(a) is amended to read: 08  (a) If a municipality levies and collects property taxes, the governing body 09 shall provide the following notice: 10 "NOTICE TO TAXPAYER 11 For the current fiscal year the (city)(borough) has been allocated the following amount 12 of state aid for school and municipal purposes under the applicable financial assistance 13 Acts: 14 PUBLIC SCHOOL FUNDING [FOUNDATION] 15 PROGRAM [ASSISTANCE] (AS 14.17) $ 16 STATE AID FOR RETIREMENT OF SCHOOL 17  CONSTRUCTION DEBT (AS 14.11.100) $ 18 MUNICIPAL TAX RESOURCE EQUALIZATION 19  (AS 29.60.010 - 29.60.080) $ 20 PRIORITY REVENUE SHARING FOR 21  MUNICIPAL SERVICES (AS 29.60.100 - 29.60.180) $ 22 REVENUE SHARING FOR SAFE COMMUNITIES 23  (AS 29.60.350 - 29.60.375) $ 24 TOTAL AID $ 25 The millage equivalent of this state aid, based on the dollar value of a mill in the 26 municipality during the current assessment year and for the preceding assessment year, 27 is: 28 MILLAGE EQUIVALENT 29 PREVIOUS YEAR THIS YEAR 30 PUBLIC SCHOOL FUNDING 31  [FOUNDATION] PROGRAM

01  ASSISTANCE . . . . MILLS . . . . MILLS 02 STATE AID FOR RETIREMENT 03   OF SCHOOL CONSTRUCTION 04  DEBT . . . .MILLS . . . .MILLS 05 MUNICIPAL TAX RESOURCE 06  EQUALIZATION . . . .MILLS . . . .MILLS 07 PRIORITY REVENUE FOR SHARING 08 MUNICIPAL SERVICES . . . .MILLS . . . .MILLS 09 REVENUE SHARING FOR SAFE 10 COMMUNITIES . . . .MILLS . . . .MILLS 11 TOTAL MILLAGE 12 EQUIVALENT . . . .MILLS . . . .MILLS" 13 Notice shall be provided by 14  (1) [BY] furnishing a copy of the notice with tax statements mailed for 15 the fiscal year for which aid is received; or 16  (2) [BY] publishing in a newspaper of general circulation in the 17 municipality a copy of the notice once each week for a period of three successive 18 weeks, with publication to occur not later than 45 days after the final adoption of the 19 municipality's budget. 20 * Sec. 18. AS 29.60.030(d) is amended to read: 21  (d) The full and true assessed property value shall be determined by the 22 department in the manner provided for the computation of state aid to education under 23 AS 14.17.510 [AS 14.17.140]. When the determination of locally generated revenue 24 includes revenue of a utility received under AS 29.60.010(c)(1)(E), the full and true 25 assessed property value must include the computed assessed value of the utility, 26 determined by dividing the amount of the payment in place of taxes made by the 27 utility by the millage rate that would apply to the utility if the utility were subject to 28 levy and collection of taxes under AS 29.45. 29 * Sec. 19. AS 36.10.090(b) is amended to read: 30  (b) A local government or school district covered by the provisions of this 31 chapter that is found to be in violation of these provisions may be required to forfeit

01 all or part of the state aid made available for the project in which the violation occurs 02 and in addition may be denied up to 12 months of state revenue sharing or public 03 school funding [FOUNDATION MONEY]. A state department or agency head found 04 to be in violation of this chapter may be required to forfeit the position of department 05 or agency head. 06 * Sec. 20. AS 36.10.125(c) is amended to read: 07  (c) In an action brought under (b) of this section , the court may, in its 08 discretion, order denial of state revenue sharing or public school funding 09 [FOUNDATION MONEY], forfeiture of office or position, or injunctive or other 10 relief. If the court finds for the plaintiff in an action brought under (b) of this section, 11 it may award the plaintiff an amount equal to the actual costs and attorney fees 12 incurred by the plaintiff. 13 * Sec. 21. AS 43 is amended by adding a new chapter to read: 14 Chapter 42. Unorganized Borough Employment Tax. 15  Sec. 43.42.010. Tax imposed. In each calendar year, there is levied an 16 employment tax upon each individual who receives compensation for services 17 performed in the unorganized borough outside of a home rule or first class city as an 18 employee or receives self-employment earnings from business activities conducted in 19 the unorganized borough outside of a home rule or first class city. The tax on an 20 individual is three percent of 21  (1) compensation paid to that individual by an employer who has a 22 business situs in the unorganized borough outside of a home rule or first class city for 23 services performed in the unorganized borough outside of a home rule or first class 24 city in the calendar year as an employee of that employer; 25  (2) that individual's self-employment earnings from business activities 26 conducted in the unorganized borough outside of a home rule or first class city in the 27 calendar year. 28  Sec. 43.42.020. Determination of business situs. For purposes of 29 AS 43.42.010, an employer has a business situs in the unorganized borough outside 30 of a home rule or first class city if, at any time in the calendar year, an individual 31 performs services in the unorganized borough outside of a home rule or first class city

01 as an employee of that employer. 02  Sec. 43.42.030. Collection, reporting, and remittance of tax on employee 03 compensation. (a) An employer making payment of compensation for services 04 performed in the unorganized borough outside of a home rule or first class city shall 05 withhold from the payment the tax levied by this chapter. The employer shall 06 withhold three percent of each payment of compensation and shall file a return and 07 remit the taxes as required by (b) or (c) of this section. 08  (b) Except as provided in (c) of this section, the return required by this section 09 must be filed, and the withheld taxes remitted, by the date the employer's regular 10 quarterly report of employment security contributions under AS 23.20 is required to 11 be filed. The employer shall file a return by reporting amounts withheld under this 12 section during the preceding calendar quarter, and any additional information required 13 by regulation adopted under AS 43.42.040(a), to the Department of Labor on forms 14 provided by the Department of Labor together with the employer's regular quarterly 15 report of employment security contributions under AS 23.20. With each return filed 16 under this subsection, the employer shall remit the taxes required to be withheld under 17 this section during the preceding calendar quarter. 18  (c) An employer who is required to withhold and remit taxes under this section 19 but who is not subject to the reporting requirements of AS 23.20 shall file a return and 20 remit the taxes as required by this subsection. On or before the last day of the month 21 following each calendar quarter in which taxes were withheld under this section, the 22 employer shall file with the department a return on forms provided by the department 23 and shall remit the taxes required to be withheld during the preceding calendar quarter. 24 In the return, the employer shall report amounts withheld under this section during the 25 preceding calendar quarter and any additional information required by regulation 26 adopted under AS 43.42.040(a). 27  Sec. 43.42.040. Administration of tax on employee compensation. (a) After 28 consultation with the Department of Labor, the department shall prescribe, by 29 regulation, any additional information that must be included in a return filed under 30 AS 43.42.030 in order for the department to calculate, determine, collect, or enforce 31 the tax levied by this chapter. The Department of Labor shall include, on forms for

01 reporting under AS 23.20, space designated for reporting amounts withheld under 02 AS 43.42.030 and for providing any additional information required by department 03 regulations. The department shall coordinate with the Department of Labor to 04 maximize the use of existing reports to the department and to the Department of 05 Labor. 06  (b) The Department of Labor shall provide to the department the information 07 collected under AS 43.42.030 that relates to the tax levied by this chapter. 08  (c) The Department of Labor shall report to the department a failure of an 09 employer to timely report or remit the tax levied by this chapter. The Department of 10 Labor may not use the provisions of AS 23.20 to enforce the collection or remittance 11 of the tax levied by this chapter. Reporting forms and other records relating to the tax 12 levied by this chapter that are maintained by the Department of Labor are prima facie 13 evidence of timely reporting and remittance, or failure to timely report or remit, under 14 AS 43.42.030. 15  Sec. 43.42.050. Administration and payment of tax on self-employment 16 earnings. (a) An individual who is subject to the tax on self-employment earnings 17 levied by this chapter shall file a return with the department, and with the return shall 18 pay the tax, in the manner required by this section. The return must be filed on a form 19 provided by the department. 20  (b) The individual shall file a return for each calendar quarter in which the 21 individual had self-employment earnings and make a payment of three percent of the 22 individual's self-employment earnings in that quarter. 23  (c) Returns must be filed and payments made, as required by (b) of this 24 section, on or before the following dates: 25  (1) April 15, for the first calendar quarter of a year; 26  (2) July 15, for the second calendar quarter of a year; 27  (3) October 15, for the third calendar quarter of a year; 28  (4) January 15 of the following year, for the fourth calendar quarter of 29 a year. 30  Sec. 43.42.060. Record of tax withheld from employees; refunds. (a) An 31 employer who withholds tax under AS 43.42.030 shall furnish to the employee before

01 February 1 of each calendar year a record of the amount of tax withheld from that 02 employee's compensation in the preceding calendar year. The employer shall pay to 03 the department a penalty of $10 for each failure to provide the record required by this 04 subsection. 05  (b) On or before April 15 of a calendar year, an individual may file with the 06 department, on forms provided by the department, a claim for the refund of excess tax 07 withheld or paid for the preceding calendar year. The individual shall attach the 08 records provided by employers or other proof of payment acceptable to the department 09 to support the refund claim. 10  Sec. 43.42.070. Disposition of and accounting for tax proceeds. (a) The 11 money collected by the department under this chapter shall be deposited in the general 12 fund of the state, and the proceeds from the tax shall be separately accounted for by 13 regional educational attendance area. The legislature may appropriate the estimated 14 balance of the account to the public school account established under AS 14.17.300. 15  (b) In this section, "regional educational attendance area" means an area of the 16 unorganized borough specified as an educational service area under AS 14.08.031(a). 17  Sec. 43.42.080. Regulations. The department may adopt regulations to 18 interpret and implement this chapter. 19  Sec. 43.42.099. Definitions. In this chapter, 20  (1) "business activities" means activities or acts of a commercial, 21 occupational, professional, or like nature, that are engaged in or caused to be engaged 22 in with the object of financial or pecuniary gain, profit, or benefit; "business activities" 23 does not include 24  (A) providing services as an employee; 25  (B) furnishing or selling of property, services, substances, or 26 things by a person who does not represent to be regularly engaging in those 27 transactions; 28  (C) an individual's investment or banking activities relating to 29 that individual's personal property; 30  (2) "calendar quarter" means each of the three-month periods ending 31 March 31, June 30, September 30, and December 31;

01  (3) "compensation for services" means gross wages, salaries, tips, and 02 other remuneration paid to an employee by an employer; "compensation for services" 03 does not include 04  (A) remuneration for attendance at events such as trade shows, 05 conventions, or educational or scientific workshops or seminars; or 06  (B) compensation earned by a prisoner under AS 33 at a rate 07 less than the minimum wage established under AS 23.10; 08  (4) "employer" means a person making payment of compensation for 09 services who is required to deduct and withhold income taxes under provisions of 10 26 U.S.C. (Internal Revenue Code); 11  (5) "individual" means a natural person who was 19 years of age or 12 older on January 1 of a calendar year; 13  (6) "self-employment earnings" means gross receipts from a business 14 activity that are not paid by an employer less the expenses incurred to produce the 15 gross receipts; 16  (7) "tax" means the employment tax levied by this chapter. 17 * Sec. 22. AS 44.47.305(c) is amended to read: 18  (c) A grant under (a) of this section may not exceed $50 per month for each 19 child the child care facility cares for, or for each full-time equivalent, as determined 20 by the department. The grant shall be adjusted on a geographic basis by the same 21 percentages as funding communities [INSTRUCTIONAL UNIT ALLOTMENTS] are 22 adjusted under AS 14.17.470 [AS 14.17.051]. 23 * Sec. 23. AS 14.17.010, 14.17.021, 14.17.022, 14.17.024, 14.17.025, 14.17.026, 14.17.031, 24 14.17.041, 14.17.043, 14.17.045, 14.17.047, 14.17.051, 14.17.056, 14.17.080, 14.17.082, 25 14.17.140, 14.17.160, 14.17.170, 14.17.190, 14.17.200, 14.17.210, 14.17.220, 14.17.225, 26 14.17.250; and AS 14.30.315(a) are repealed. 27 * Sec. 24. AS 14.17.460 and 14.17.470 are repealed July 1, 2000. 28 * Sec. 25. TRANSITION: TRANSITION FUNDING. (a) Notwithstanding the provisions 29 of secs. 1 - 24 of this Act and except as provided in (c) of this section, if, for a fiscal year 30 beginning July 1, 1998, through July 1, 2001, a school district would receive less public 31 school funding under AS 14.17.410, enacted by sec. 2 of this Act, than the district would have

01 received as state aid for the fiscal year beginning July 1, 1998, and, if a city or borough 02 school district, the district meets the requirements of (b) of this section, the district is eligible 03 to receive instead a percentage of the state aid the district would have received for the fiscal 04 year beginning July 1, 1998, according to the following table: 05 For the fiscal year beginning Percentage of state aid for the fiscal year beginning July 1, 1998 06 July 1, 1998 100 07 July 1, 1999 98 08 July 1, 2000 95 09 July 1, 2001 90 10 (b) A school district in a city or borough is not entitled to the transition funding 11 percentage set out in (a) of this section for a fiscal year unless the city or borough makes a 12 local contribution to the district for that fiscal year as required under this subsection. For the 13 transition funding for the fiscal year beginning July 1, 1998, the required local contribution 14 is the equivalent of a four mill tax levy; for the fiscal year beginning July 1, 1999, the 15 required local contribution is the equivalent of a five mill tax levy; for the fiscal year 16 beginning July 1, 2000, the required local contribution is the equivalent of a six mill tax levy; 17 and for the fiscal year beginning July 1, 2001, the required local contribution is the equivalent 18 of a seven mill tax levy. 19 (c) For the purposes of the reduction required under AS 14.17.400(b), enacted by 20 sec. 2 of this Act, transition funding authorized under (a) and (b) of this section is treated the 21 same as the state share of public school funding under AS 14.17.410, enacted by sec. 2 of this 22 Act. 23 (d) For purposes of this section, "state aid" means state foundation aid distributed 24 under the provisions of AS 14.17, repealed by this Act, and additional district support 25 appropriated by the legislature. 26 * Sec. 26. TRANSITION: REGULATIONS. To the extent the regulations are not 27 inconsistent with the language and purposes of this Act, regulations relating to state aid for 28 public schools adopted by the Department of Education before the effective date of this 29 section remain in effect as valid regulations implementing this Act; all other regulations 30 relating to state aid for public schools adopted by the Department of Education before the 31 effective date of this section are annulled. The Department of Education may administer and

01 enforce those previously adopted regulations relating to state foundation aid for public schools. 02 * Sec. 27. TRANSITION: BASE STUDENT ALLOCATION. Notwithstanding 03 AS 14.17.475, enacted in sec. 2 of this Act, the base student allocation is as follows: 04 For the fiscal year beginning Base student allocation 05 July 1, 1998 3,800 06 July 1, 1999 3,905 07 July 1, 2000 3,945 08 July 1, 2001 3,975 09 * Sec. 28. TRANSITION: FUNDING COMMUNITIES. For purposes of determining 10 funding communities under AS 14.17.450, enacted under sec. 2 of this Act, the students in a 11 funding community smaller than 10 ADM on the effective date of this section shall be 12 included in the largest funding community in the school district existing on the effective date 13 of this section. 14 * Sec. 29. REQUIRED REPORT; ENACTMENT OF COST FACTORS. (a) The chairs 15 of the House and Senate Health, Education and Social Services Committees shall form a joint 16 committee for the purpose of conducting a study of funding community size factors under 17 AS 14.17.460, enacted by sec. 2 of this Act, and area cost factors under AS 14.17.470, 18 enacted by sec. 2 of this Act. The members of the joint committee shall be selected from the 19 members of the House and Senate Health, Education and Social Services committees and shall 20 include a representative from the Department of Education selected by the commissioner of 21 education. The Department of Education shall, upon request of the joint committee, provide 22 technical assistance or staff necessary to complete the study described in this subsection. 23 (b) The study required under (a) of this section must be completed by December 31, 24 1999, and must include recommendations for funding, community size and area cost factors, 25 school size, school location, and school curriculum. The study may not include 26 recommendations on the manner in which a school is governed. The recommended factors 27 contained in the study may be enacted by the legislature, but may not be enacted by the 28 legislature in amended form. 29 * Sec. 30. APPLICABILITY OF UNORGANIZED BOROUGH EMPLOYMENT TAX. 30 AS 43.42 enacted by sec. 21 of this Act, applies to compensation and self-employment 31 earnings income received on or after January 1, 1999.

01 * Sec. 31. REGULATIONS. Notwithstanding sec. 32 of this Act, the Department of 02 Revenue may proceed to adopt regulations to implement or interpret AS 43.42, enacted by sec. 03 21 of this Act. Regulations adopted under this section take effect under AS 44.62 04 (Administrative Procedure Act), but not before the effective date of sec. 21 of this Act. 05 * Sec. 32. AS 14.17.410(b)(3), added by sec. 2 of this Act, and AS 43.42, enacted by sec. 06 21 of this Act, take effect January 1, 1999. 07 * Sec. 33. Sec. 31 of this Act takes effect immediately as provided under AS 01.10.070(c). 08 * Sec. 34. Except as provided in sec. 32 and sec. 33 of this Act, this Act takes effect July 09 1, 1998.