03/19/2013 01:30 PM House FINANCE

HOUSE BILL NO. 87                                                                                                             
                                                                                                                                
     "An Act extending the special education service                                                                            
     agency; and providing for an effective date."                                                                              
                                                                                                                                
1:33:36 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze   stated  that  committee   concerns  were                                                                    
addressed for HB 87 regarding  the Special Education Service                                                                    
Agency (SESA).                                                                                                                  
                                                                                                                                
Representative Wilson MOVED to  ADOPT the proposed committee                                                                    
substitute  for HB  87,  Work  Draft, 28-LS0392\O,  Mischel,                                                                    
3/18/13,(FIN). Co-Chair Stoltze OBJECTED for discussion.                                                                        
                                                                                                                                
Representative  Wilson  explained  that  the  Department  of                                                                    
Education  and  Early  Development  (DEED)  would  now  have                                                                    
oversight of  SESA versus the  former Governor's  Council of                                                                    
Disabilities  and   Special  Education.  The   findings  and                                                                    
recommendations  on the  audit report  were considered  when                                                                    
making  the  decision.  She   stressed  "whereby  state  and                                                                    
federal  law it  is  the requirement  of  the Department  of                                                                    
Education  and  Early  Development  to make  sure  that  the                                                                    
correct  services  were  brought to  our  special  education                                                                    
students." She noted that a  special education director from                                                                    
the department  met with SESA  on regular intervals  and the                                                                    
change  will allow  the legislature  to  better monitor  the                                                                    
organization and its needs.                                                                                                     
                                                                                                                                
REPRESENTATIVE  PETE  HIGGINS,  spoke  about  the  bill.  He                                                                    
appreciated  the committee  tackling  the  issue of  program                                                                    
oversight.                                                                                                                      
                                                                                                                                
Co-Chair Stoltze WITHDREW his OBJECTION..                                                                                       
                                                                                                                                
1:36:12 PM                                                                                                                    
                                                                                                                                
Representative  Kawasaki   MOVED  a   conceptual  amendment.                                                                    
Representative Wilson OBJECTED.                                                                                                 
                                                                                                                                
     TO: CSHB 87 (FIN) Work Draft 28-LS0392\O                                                                                   
                                                                                                                                
     Page 1, line 11:                                                                                                           
     Delete "$15.75"                                                                                                            
     Insert "$21.50 [$15.75]"                                                                                                   
                                                                                                                                
     Page 2, following line 6:                                                                                                  
     Insert a new bill section to read:                                                                                         
                                                                                                                                
     "*Sec. 2. AS 1430.650 is amended by adding a new                                                                           
     subsection to read:                                                                                                        
                                                                                                                                
     (b)  The funding  allocated under  (a) of  this section                                                                    
     shall be  adjusted annually  by multiplying  the amount                                                                    
     allocated in  the immediately preceding fiscal  year by                                                                    
     0.5 percent."                                                                                                              
                                                                                                                                
Representative  Kawasaki explained  the amendment.  He noted                                                                    
that recent  discussions with  Legislative Budget  and Audit                                                                    
(LB&A)  and DEED  led to  information about  SESA's funding.                                                                    
The funding had  not kept up with inflation  or Base Student                                                                    
Allocation  (BSA)  increases.  He  noted that  SESA  was  an                                                                    
agency that was  flat-funded for many years  while the total                                                                    
number of program  participants increased substantially. The                                                                    
$21.50 would allow the program to keep up with inflation.                                                                       
                                                                                                                                
Representative  Wilson  responded  that  the  $15.75  was  a                                                                    
minimum   requirement.   She   noted  that   the   education                                                                    
subcommittee  did   not  discuss   the  issue   because  the                                                                    
program's  oversight was  through the  Department of  Health                                                                    
and Social Services (DHSS). The  audit stated that the "plan                                                                    
did  not have  the number  of students  and school  district                                                                    
personnel receiving  services and all funding  sources." She                                                                    
noted that the education  subcommittee would detail the fund                                                                    
sources  during the  interim with  the oversight  located in                                                                    
DEED.                                                                                                                           
                                                                                                                                
Co-Chair Stoltze spoke against  the amendment because he was                                                                    
philosophically   opposed   to  indexing   the   appropriate                                                                    
channels when working through the budget process.                                                                               
                                                                                                                                
Representative  Gara  pointed  out   the  cost  per  special                                                                    
education  student   in  Anchorage   or  Fairbanks   of  $50                                                                    
thousand. He  wondered what rural school  districts received                                                                    
to   educate   special   education  students   with   severe                                                                    
handicaps.                                                                                                                      
                                                                                                                                
1:39:03 PM                                                                                                                    
                                                                                                                                
Representative Higgins replied that  the current funding was                                                                    
adequate, but the  organization would prefer not  to be flat                                                                    
funded.  The  SESA  board  understood  that  the  state  was                                                                    
operating  under   budget  constraints.  The  goal   of  the                                                                    
legislation   was  to   extend   the   sunset  utilizing   a                                                                    
subcommittee process to address the funding issue.                                                                              
                                                                                                                                
Representative Gara  clarified his question. He  wondered if                                                                    
rural areas received funding  for special education services                                                                    
in addition to SESA.                                                                                                            
                                                                                                                                
Representative  Higgins  did  not  know the  answer  to  the                                                                    
question.                                                                                                                       
                                                                                                                                
1:40:42 PM                                                                                                                    
                                                                                                                                
Representative Wilson  responded that  the $15 was  based on                                                                    
the average daily attendance and  the numbers of students in                                                                    
the state.                                                                                                                      
                                                                                                                                
Representative  Kawasaki reiterated  that the  SESA baseline                                                                    
budget  was   established  15  years  ago.   He  noted  that                                                                    
inflation alone decreased the value  by over 36 percent. The                                                                    
sum was  small and  affected the  most vulnerable  people in                                                                    
rural Alaska who might not  have the assets available within                                                                    
their own  school districts. He  pointed out that  the joint                                                                    
legislative education  task force  recommendations advocated                                                                    
for  an  increase  for  the  intensive  needs  resources  to                                                                    
schools.  He noted  that not  every intensive-needs  student                                                                    
qualified  for SESA,  but  he believed  that  the money  was                                                                    
wisely spent  and impacted  those kids  who needed  the most                                                                    
help.                                                                                                                           
                                                                                                                                
Representative Wilson maintained her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Gara, Kawasaki                                                                                                        
OPPOSED:  Thompson, Costello, Edgmon, Neuman, Wilson,                                                                           
          Holmes, Munoz, Stoltze and Austerman                                                                                  
                                                                                                                                
The conceptual amendment failed (2/9).                                                                                          
                                                                                                                                
1:43:39 PM                                                                                                                    
                                                                                                                                
Representative Costello  detailed one  fiscal note  for CSHB
 showing an impact of  $2,035,500 for fiscal year 2014 for                                                                    
every fiscal year following.                                                                                                    
                                                                                                                                
Co-Chair Stoltze  asked a department  member if  fiscal note                                                                    
was correct.                                                                                                                    
                                                                                                                                
MARCY  HERMAN, SPECIAL  ASSISTANT,  DEPARTMENT OF  EDUCATION                                                                    
AND EARLY DEVELOPMENT, responded yes.                                                                                           
                                                                                                                                
Representative Wilson MOVED  to REPORT CSHB 87  (FIN) out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
Representative Kawasaki  OBJECTED in  favor of  hearing from                                                                    
DEED  about  the  implication of  the  legislation  and  the                                                                    
change in oversight from the council to the department.                                                                         
                                                                                                                                
MS.  ELIZABETH SWEENEY  NUDELMAN, DIRECTOR,  SCHOOL FINANCES                                                                    
AND   FACILITIES,   DEPARTMENT   OF  EDUCATION   AND   EARLY                                                                    
DEVELOPMENT, stated that the costs  shown in the fiscal note                                                                    
would remain accurate if SESA continued to operate.                                                                             
                                                                                                                                
Representative Kawasaki wondered  how the substantive change                                                                    
in  oversight would  affect the  program because  DEED would                                                                    
take over administration and governance of the program.                                                                         
                                                                                                                                
Ms. Nudleman replied  that the SESA organization  was run by                                                                    
a  board of  directors  and the  board,  with the  executive                                                                    
director  would continue  to operate  the organization.  She                                                                    
stated that  the fiscal note  would carry the same  costs it                                                                    
had  in  prior  years.  She  referred  to  the  sponsor  for                                                                    
questions regarding the CS.                                                                                                     
                                                                                                                                
Co-Chair  Stoltze wished  that  Representative Kawasaki  had                                                                    
followed  protocol by  raising  the point  when  the CS  was                                                                    
discussed.                                                                                                                      
                                                                                                                                
Representative  Kawasaki asked  if  SESA's nonprofit  status                                                                    
impacted   the   department's   ability  to   regulate   the                                                                    
organization.                                                                                                                   
                                                                                                                                
Ms. Nudelman responded that  the legislation consolidated by                                                                    
eliminating  oversight   from  the  Governor's   Council  on                                                                    
Disabilities  and  Special  Education. She  was  unaware  of                                                                    
further changes. The nonprofit was administered by a board.                                                                     
                                                                                                                                
1:50:27 PM                                                                                                                    
                                                                                                                                
Representative Gara  stated that  he did not  understand the                                                                    
decision to consolidate the agencies governing SESA.                                                                            
                                                                                                                                
Co-Chair   Stoltze   explained   that   the   audit   report                                                                    
recommendations were considered when making the decision.                                                                       
                                                                                                                                
Representative   Wilson   clarified   that   the   education                                                                    
subcommittee  discussed  the  matter at  great  length.  The                                                                    
council did  not have  the authority, if  the money  was not                                                                    
spent  correctly, to  do  anything about  it.  With new  and                                                                    
specific laws regulating special  education, the decision to                                                                    
give DEED  full oversight was  prudent. She stated  that the                                                                    
council would  continue to review programs.  The only change                                                                    
was  providing authority  to the  department to  ensure that                                                                    
the  students got  the help  they need  and money  was spent                                                                    
correctly. The authority was also  provided to DEED to bring                                                                    
the item forth in their budget for future program needs.                                                                        
                                                                                                                                
Representative Gara appreciated the explanation.                                                                                
                                                                                                                                
Representative Kawasaki WITHDREW his OBJECTION                                                                                  
                                                                                                                                
CSHB 87(FIN) was REPORTED out  of committee with a "do pass"                                                                    
recommendation  and  with  one previously  published  fiscal                                                                    
impact note: FN1 (EED).                                                                                                         
                                                                                                                                
1:54:59 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:55:21 PM                                                                                                                    
RECONVENED