03/27/2013 09:00 AM Senate FINANCE

SENATE BILL NO. 17                                                                                                            
                                                                                                                                
     "An Act extending the special education service                                                                            
     agency; and providing for an effective date."                                                                              
                                                                                                                                
9:06:57 AM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough MOVED to  ADOPT the proposed committee                                                                    
substitute  for  SB  17, Work  Draft  28-LS0289\P  (Mischel,                                                                    
3/20/13). There being NO OBJECTION, it was so ordered.                                                                          
                                                                                                                                
CHRISTINE MARASIGAN,  STAFF, SENATOR KEVIN  MEYER, explained                                                                    
the two  changes in the proposed  committee substitute (CS).                                                                    
She reported that  on Section 1, Page 1, line  6, the amount                                                                    
of $15.75 was changed to $18.65.  In Section 2, Page 2, line                                                                    
3, the  sunset year was changed  from June 30, 2021  to June                                                                    
30, 2017.                                                                                                                       
                                                                                                                                
Co-Chair Meyer  added that the Legislative  Budget and Audit                                                                    
recommended an eight year extension.  He believed the length                                                                    
of time was too long and cut the extension time in half.                                                                        
                                                                                                                                
PATRICK   PILAI,  EXECUTIVE   DIRECTOR,  SPECIAL   EDUCATION                                                                    
SERVICE AGENCY (SESA), JUNEAU, supported  the changes in the                                                                    
legislation.  The reduction  in  the reauthorization  period                                                                    
coupled with  the increased funding  was beneficial  for the                                                                    
agency. The agency did not  receive a funding increase in 15                                                                    
years and a layoff of four employees was imminent.                                                                              
                                                                                                                                
Senator  Dunleavy wondered  how  the bill  helped SESA.  Mr.                                                                    
Pilai responded  that the agency was  "diluting services" in                                                                    
order to operate with a  fund balance. The agency maintained                                                                    
an  average  fund  balance  of  $450  thousand.  The  agency                                                                    
received its funding four times  each year and 25 percent of                                                                    
its  grant  funding  up front,  which  required  expenditure                                                                    
after  reimbursement.  The agency  had  to  maintain a  $400                                                                    
thousand dollar balance to sustain  its cash flow. Without a                                                                    
funding  increase  the agency  was  going  to lay  off  four                                                                    
employees.  The increase  allowed the  agency to  retain two                                                                    
specialists. The board's  desire was to make  cuts to SESA'a                                                                    
administration  in  order  to maintain  services  to  school                                                                    
districts.  The agency  will lay  off one  administrator and                                                                    
one program assistant but retain the two specialists.                                                                           
                                                                                                                                
9:13:20 AM                                                                                                                    
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9:13:48 AM                                                                                                                    
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9:13:57 AM                                                                                                                    
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9:14:32 AM                                                                                                                    
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Ms.  Marasigan   explained  that  a  new   fiscal  note  was                                                                    
forthcoming.  The  original  version   of  the  bill  simply                                                                    
extended the  sunset date. The  CS added half of  the amount                                                                    
of the increment  (36 percent) recommended by the  LBA for a                                                                    
total  of  $375  thousand  ($18.75  multiplied  by  the  ADM                                                                    
(average  daily membership))  added to  the existing  fiscal                                                                    
note total of $2,035.5 million.                                                                                                 
                                                                                                                                
Vice-Chair Fairclough MOVED  to REPORT CSSB 17  (FIN) out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
SB  17  was REPORTED  out  of  committee  with a  "do  pass"                                                                    
recommendation and  with a new  fiscal impact note  from the                                                                    
Department of Education and Early Development.                                                                                  
                                                                                                                                
9:15:37 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:21:10 AM                                                                                                                    
RECONVENED