04/17/2002 08:00 AM House EDU

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* first hearing in first committee of referral
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ALASKA STATE LEGISLATURE HOUSE SPECIAL COMMITTEE ON EDUCATION April 17, 2002 8:00 a.m. MEMBERS PRESENT Representative Con Bunde, Chair Representative Brian Porter Representative Joe Green Representative Peggy Wilson Representative Gary Stevens Representative Reggie Joule Representative Gretchen Guess MEMBERS ABSENT All members present COMMITTEE CALENDAR HOUSE BILL NO. 478 "An Act relating to the Alaska teacher recruitment loan assumption program; and providing for an effective date." - MOVED CSHB 478(EDU) OUT OF COMMITTEE HOUSE BILL NO. 488 "An Act relating to an insurance tax credit for a gift to a school for math, science, and technology; and providing for an effective date." - HEARD AND HELD HOUSE BILL NO. 293 "An Act relating to the teachers' housing loan program in the Alaska Housing Finance Corporation; and providing for an effective date." - HEARD AND HELD HOUSE BILL NO. 464 "An Act relating to statewide school district correspondence study programs." - HEARD AND HELD PREVIOUS ACTION BILL: HB 478 SHORT TITLE:TEACHER LOAN ASSUMPTION PROGRAM SPONSOR(S): REPRESENTATIVE(S)GUESS Jrn-Date Jrn-Page Action 02/19/02 2316 (H) READ THE FIRST TIME - REFERRALS 02/19/02 2316 (H) EDU, HES, FIN 04/17/02 (H) EDU AT 8:00 AM HOUSE FINANCE 519 BILL: HB 488 SHORT TITLE:INS. CREDIT MATH, SCIENCE & TECH. STUDIES SPONSOR(S): REPRESENTATIVE(S)CHENAULT Jrn-Date Jrn-Page Action 02/19/02 2319 (H) READ THE FIRST TIME - REFERRALS 02/19/02 2319 (H) EDU, HES, FIN 02/19/02 2319 (H) REFERRED TO EDUCATION 04/17/02 (H) EDU AT 8:00 AM HOUSE FINANCE 519 BILL: HB 293 SHORT TITLE:AHFC LOANS TO TEACHERS SPONSOR(S): REPRESENTATIVE(S)ROKEBERG Jrn-Date Jrn-Page Action 01/14/02 1951 (H) PREFILE RELEASED 1/4/02

01/14/02 1951 (H) READ THE FIRST TIME - REFERRALS

01/14/02 1951 (H) 519 519 BILL: HB SHORT TITLE:CORRESPONDENCE STUDY PROGRAMS SPONSOR(S): REPRESENTATIVE(S)JAMES Jrn-Date Jrn-Page Action REFERRALS KOHRING, GREEN, Committee 519 WITNESS REGISTER ED McLAIN, Ed.D., Deputy Commissioner of Education Office of the Commissioner Department of Education and Early Development Juneau, Alaska 99801-1894 POSITION STATEMENT: Testified in support of 293. LOUISE PARRISH (No address provided) Valdez, Alaska POSITION STATEMENT: Testified that a loan forgiveness program such as encompassed in 488. JANET SEITZ, Staff to Representative Norman Rokeberg Alaska State Legislature Capitol Building Juneau, Alaska 99801 POSITION STATEMENT: Presented ACTION NARRATIVE TAPE 02-16, SIDE A Number 0001 CHAIR CON BUNDE called the House Special Committee on Education meeting to order at 8:00 a.m. Representatives Bunde, Porter, Wilson, Stevens, and Guess were present at the call to order. Representatives Green and Joule arrived as the meeting was in progress. HB CHAIR BUNDE announced that the first order of business would be HOUSE BILL NO. 478, "An Act relating to the Alaska teacher recruitment loan assumption program; and providing for an effective date." REPRESENTATIVE GUESS, Alaska State Legislature, speaking as the sponsor of HB program that was requested by the Department of Education and Early Development (EED). This loan assumption program would provide the freedom of a teaching incentive program regardless of the postsecondary school where the education was received and regardless of the entities from which the student loan was borrowed. She pointed out that the Alaska Commission on Postsecondary Education (ACPE) now attempts to obtain the best loan possible for people and thus the loans aren't always ACPE loans. CHAIR BUNDE asked if this legislation applied only to Alaska residents. REPRESENTATIVE GUESS deferred to the department. Number 0224 ED McLAIN, Ed.D., Deputy Commissioner of Education, Office of the Commissioner, Department of Education and Early Development, announced the department's support of 478 legislation is of a relatively modest cost with a relatively high return. In response to Chair Bunde's earlier question, Dr. McLain said that the department didn't conceive of the legislation only applying to Alaska residents. The desire is to be attractive to teachers from all over, he said. Currently, Alaska doesn't turn out the number of teachers necessary to fill the vacancies. REPRESENTATIVE STEVENS requested an explanation of the financial elements of HB Number 0505 DIANE BARRANS, Executive Director, Postsecondary Education Commission, Department of Education and Early Development, explained that while this legislation would provide a benefit that could attract nonresidents to the state, the benefit wouldn't be received until completion of a year of teaching in Alaska. Therefore, she presumed such individuals would've established residency in the state. With regard to the costs, the fiscal note she submitted has a zero fiscal impact for operating expenses. She explained that the commission would basically be a dispersing agent, which the commission believes can be done in a fairly automated manner and thus there are no plans to add staff. With respect to the actual benefit expense, the fiscal note is indeterminate because it would depend upon the amount of money available through appropriation to fund the benefits. The legislation, through its structure, suggests that the student loan corporation's return of capital payment might be a source of future funding. Although in the last three years those funds returned to the state have been expended in a variety of ways, the funds have typically been expended on educational programs. Ms. Barrans said she expects the return to be relatively flat and in the amount of $4-$5 million each year. Number 0700 CHAIR BUNDE informed the committee that the student loan program was, at one time, funded out of the general fund, which he characterized as burdensome. Therefore, the state gave the commission the loan portfolio. He inquired as to the amount the corporation would've capitalized. MS. BARRANS answered that the student loan corporation was capitalized to approximately $306 million in the form of outstanding loans. CHAIR BUNDE highlighted that then ACPE became self-sustaining, and made a profit. MS. BARRANS said the commission likes to think of it as reducing income. She informed the committee that this will be the third year in which the commission has had a return to the state. Including fiscal year 2003, the total return amounts to about $12 million. CHAIR BUNDE surmised that if HB 478. be insufficient for what is necessary [to recruit teachers to Alaska]. For instance, Montana is a state that educates individuals in education; however, those individuals are going elsewhere to work because of the incentives. Mr. Rose mentioned that he served on the task force which reviewed how a loan assumption program would be used. The task force reviewed a 50 percent assumption with 10 percent per year for five years, which it believed to be reasonable. However, that figure was changed. Mr. Rose reiterated that AASB supports although it believes the legislation is insufficient in comparison to what other states offer, particularly California. CHAIR BUNDE questioned, then, whether it's worth doing. He asked if the money would be better spent in the foundation formula. MR. ROSE said he really couldn't make that judgment, although he did say that if this legislation was sufficiently funded it would be helpful. Mr. Rose said, "I think the reason we're here is because of the way we've addressed the foundation formula over the last dozen years." CHAIR BUNDE, upon determining that no one else wished to testify, closed public testimony. Number 3420 CHAIR BUNDE moved that the committee adopt Amendment 1, which read: Page 5, line 12, following "program": Delete "." Insert ";" Page 5, following line 12: Insert a new [paragraph] to read: "(5) "board" means the Board of Education and Early Development." REPRESENTATIVE GREEN inquired as to how the Board of Education and Early Development would [define] a newly hired teacher who would be eligible for this loan assumption program. DR. McLAIN answered that it would be his recommendation that the reference to a an applicant first hired as a classroom teacher wouldn't refer to someone in the second or third year of an ongoing contract. With regard to moving from one district to another, Dr. McLain said he wouldn't consider someone moving to another district as a new hire. Dr. McLain argued that someone with experience in the Lower 48 who comes to Alaska for the first time to teach would fall under this legislation. In response to Representative Green, Dr. McLain said he understood the legislation to focus on the date first hired as a classroom teacher and the postsecondary expenses. Therefore, it wouldn't matter whether the individual changed majors during the second or third year of school. REPRESENTATIVE GREEN asked if this legislation is significant enough. DR. McLAIN agreed with earlier comments that this legislation is one more tool, and in that context AASB supports the legislation. However, he said that he would like to see additional dollars. Number 3900 CHAIR BUNDE directed attention to the language "newly hired teachers" and inquired as to Dr. McLain's thoughts on adding the language referring to newly hired teachers when first hired in Alaska. DR. McLAIN said he understood the legislation to apply to newly hired teachers when first hired in Alaska and thus he appreciated Chair Bunde's clarification. CHAIR BUNDE highlighted that this is a policy decision in which the committee must determine whether the legislation should apply to first time hires only or those teachers who move to a new district, particularly an underserved district. REPRESENTATIVE PORTER said that he didn't believe it is appropriate for state law to establish an advantage in the state of one district over another. CHAIR BUNDE agreed. However, he pointed out that the language "first hired in Alaska" would be equal whereas "newly would allow a teacher moving from one district to another to qualify for the program. REPRESENTATIVE PORTER opined that allowing teachers who moved [to a new district] to qualify for this program wouldn't be a good state policy. CHAIR BUNDE asked if the committee wanted the legislation to apply only to first-time hired teachers in Alaska or newly hired teachers, which would include teachers who move from one district to another. Number 4222 REPRESENTATIVE STEVENS asked if districts have the latitude to do this on their own, that is provide additional funds to new teachers. DR. McLAIN explained that through the teachers' negotiated agreement, teachers have a variety of ways to enhance their particular district. Therefore, a teacher could increase his/her salary due to the district's flexibility with the salary scale. REPRESENTATIVE STEVENS said he would be comfortable with the reference to first hired in Alaska with the realization that the districts have other options. REPRESENTATIVE PORTER inquired as to the sponsor's intent with regard to who this legislation would apply. DR. McLAIN answered that he understood the legislation to encourage qualified teachers to come into the state versus into the district. Barring other direction, Dr. McLain said that's how he would interpret this legislation. CHAIR BUNDE requested that Dr. McLain develop language to the above intent to insert on page 1, line 10. He then 478 HB CHAIR BUNDE announced that the next order of business would be HOUSE BILL NO. 488, "An Act relating to an insurance tax credit for a gift to a school for math, science, and technology; and providing for an effective date." CHAIR BUNDE announced that he didn't intend to move committee today. TAPE 02-16, SIDE B Number 4554 SHARALYN "SUE" WRIGHT, Staff to Representative Mike Chenault, Alaska State Legislature, paraphrased the sponsor statement which reads as follows: House Bill 488 establishes a tax credit for gifts to an institution for the study of math, science, and technology. It provides for calculation of the tax credit and establishes limits on an allowable credit. MS. WRIGHT noted that HB HB CHAIR BUNDE announced that the next order of business would be HOUSE BILL NO. 293, "An Act relating to the teachers' housing loan program in the Alaska Housing Finance Corporation; and providing for an effective date." CHAIR BUNDE announced that he didn't intend to move committee today. Number 3335 REPRESENTATIVE PORTER moved to adopt Version 22-LS1165\J, Cook, 3/28/02, as the working document. There being no objection, Version J was before the committee. CHAIR BUNDE moved that the committee adopt Amendment 1, which reads as follows: Page 2, line 9, following "section": Insert "and permit each vacant unit to be occupied by at least one individual who is not a certificated teacher but is employed in a public elementary or secondary school in the state. If the multi-family housing project still has an unacceptable vacancy level, the corporation may expand the waiver to permit other individuals to occupy vacant units" Page 2, line 10, following the first occurrence of "waiver": Insert "and any expansion of the waiver" Page 2, line 10, following "the waiver": Insert "or expansion" Page 2, line 11, following the first occurrence of "waiver": Insert "or expansion" Page 2, line 11, following "the waiver": Insert "or expansion" Number 3260 JANET SEITZ, Staff to Representative Norman Rokeberg, Alaska State Legislature, spoke on behalf of the sponsor of She explained that Amendment 1 ensures that there is a tiered system. The intent is that multi-family housing loans would be for units occupied by certificated teachers. This amendment allows vacant units to be filled by teachers in situations in which there aren't enough teachers to fill the units. Therefore, certificated teachers would fill the units first, then school employees, and then the occupants could be [anyone]. However, a waiver from the Alaska Housing Finance Corporation (AHFC) must be obtained before offering the units to anyone besides a certificated teacher or school employee. CHAIR BUNDE, upon determining there were no objections, announced that Amendment 1 had been adopted. Number 3210 CHAIR BUNDE moved that the committee adopt Amendment 2, which reads as follows: Page 2, line 5, following "housing": Insert "(A) located in a city or community with a population of 6,000 or less; and (B)" Page 2, line 9: Delete "(a)(2)" Insert "(a)(2)(B)" MS. SEITZ pointed out that Amendment 2 refers to the multi- family housing units. The intent of the sponsor is that the multi-family housing projects be for rural areas, and therefore Amendment 2 specifies a community with a population of 6,000 or less. Communities of that size include some of the communities that aren't Rural Education Attendance Areas (REAAs) while keeping the program unavailable to larger communities. CHAIR BUNDE, upon determining there were no objections, announced that Amendment 2 had been adopted. MS. SEITZ explained that this legislation establishes a loan program for teachers to purchase housing with no down payment as well as a multi-family housing program for the rural areas. The corporation, AHFC, will develop the program. Section 1 of the Version J specifies a suggested funding source. Number 2950 REPRESENTATIVE STEVENS asked if this legislation would cover a teacher who builds a house in an area where there is no housing. MS. SEITZ replied that she believes so, but deferred to AHFC representatives for a more definitive answer. Number 2852 JOHN BITNEY, Legislative Liaison, Alaska Housing Finance Corporation, Department of Revenue, began by noting AHFC's support of the legislation, although it recognizes concerns of the Alaska State Pension Investment Board (ASPIB). The question has been regarding the source of funds being used to make these loans, which has driven the search for setting up a cost of capital to lend out that is lower than what's available on the market today. In his experience, a kicker is necessary to lower the cost of capital in order to create an incentive to meet the problem. However, there are also other issues besides finances. For example, in villages there are title restrictions on property. There are also turnover issues in rural communities where teachers aren't necessarily living in the community year round. Mr. Bitney pointed out that AHFC is trying to find ways in which to use existing programs. For example, AHFC currently has the "rural loan program," which is a revolving loan fund that makes loans in small communities at a 1 percent discounted rate from the taxable or conventional loan rate. This existing program includes a multi-family piece for up to eight plexes if the owner doesn't occupy the building. However, something is missing in the existing program. He noted that the rural districts don't want to be in the housing business. Furthermore, in many cases the teachers in the small communities form a large economic sector of the community and thus the question becomes how one can establish a program such that the economic benefit of that group is captured. MR. BITNEY pointed out that if a low cost to capital program is created there is no desire to use up the program with existing teachers using the program to refinance homes they already have. The intent seems to be to create new housing opportunities. With regard to Representative Stevens' question, Mr. Bitney related that the industry standard is that AHFC and the loan program would offer a commitment at an interest rate for construction for a specified amount of time. Once the commitment is in place, the borrower takes the commitment and borrows from a bank based on that commitment. At the time of completion, when all requirements are satisfied, the loan is taken out with that commitment. Number 2236 REPRESENTATIVE STEVENS related that the villages with which he is familiar the districts own the housing and provide the housing to the teachers. However, in many cases the housing is substandard and thus it's difficult to obtain teachers who are willing to move to the community. He asked if this program would include loans to districts to provide housing to teachers. MR. BITNEY said that he wasn't familiar with the types of authorizations that would be required for a district to enter into such an agreement. From AHFC's perspective, if the loan is a good loan AHFC would like to make the loan. However, he questioned what statutory restrictions are in place for districts when entering into certain types of debt agreements. REPRESENTATIVE GREEN asked if there is any possibility of using an "arm". MR. BITNEY said he wasn't familiar with an "arm". that generally the bond covenants for the source of capital on a lending program have restrictions regarding the types of loans being made. He said he would be happy to look into this. Number 1914 DEBBIE OSSIANDER, Legislative Chair, Anchorage School Board, Anchorage School District, reminded the committee that this topic arose several times in the hearings many months ago. The [board] seems to think that this legislation has some merit. And in discussions with school board members in California and Nevada, it has come to light that any kind of housing incentive has been remarkably effective in recruiting and retaining people. Ms. Ossiander noted support of HB HB CHAIR BUNDE returned to HOUSE BILL NO. 478, "An Act relating to the Alaska teacher recruitment loan assumption program; and providing for an effective date." ED McLAIN, Ed.D., Deputy Commissioner of Education, Office of the Commissioner, Department of Education and Early Development, suggested, in order to clarify the intent of the legislation, the following change: Page 1, line 10, following "teachers": Insert "upon their first hire in the state" Page 1, line 12: Delete "in those schools" Insert "in the state" CHAIR BUNDE moved that the committee adopt [Amendment 2] as specified by Dr. McLain. There being no objection, it was so ordered. Number 0950 REPRESENTATIVE WILSON moved that the committee adopt Amendment 3, which reads as follows: Page 1, line 1, following "program": Insert ", the nurse recruitment loan assumption program" Page 1, line 9, following "program": Insert "and the nurse recruitment loan assumption program" REPRESENTATIVE WILSON explained that Amendment 3 addresses the nurse shortage in the state, which is worse than the teacher shortage. She noted that [Amendment 3] includes language changes as appropriate throughout the legislation. CHAIR BUNDE objected because he believes that if the legislation was expanded to include nurses more additions could occur. For instance, there is a shortage of aircraft mechanics. He indicated that additions to legislation can often be its demise. A roll call vote was taken. Representatives Wilson and Stevens voted in favor of Amendment 3. Representatives Porter, Green, and Bunde voted against it. Therefore, Amendment 3 failed by a vote of 2-3. Number 0710 REPRESENTATIVE PORTER moved to report HB CHAIR BUNDE announced that the last order of business would be HOUSE BILL NO. 464, "An Act relating to statewide school district correspondence study programs." [Before the committee is CSHB CHAIR BUNDE moved that the committee adopt Amendment 1, which reads as follows: Page 1, lines 9-12: Delete all material and insert: "(1) shall specify that once the department has approved an initial statewide correspondence program application, the district will not be required to submit a new application (A) more frequently than every five years if the program is designated as distinguished or successful under AS (B) more frequently than every ten years if the program is designated as distinguished or successful under AS accredited by the Northwest Association of schools and Colleges." Page 1, line 13, following "monitored": Delete "at periodic intervals as established by the school district" Insert "by a certified teacher; the monitoring must include at least monthly student-teacher of teacher-parent contact, and quarterly review of the student's work or progress in the Individual Learning Plan;" Page 2, line 4, following "the": Delete "purchase" Insert "review, selection." Page 2, line 5, following "materials": Delete "purchased by the school district or Alyeska Central School" Insert "before they are introduced into the correspondence curriculum" Page 2, line 8, following "work": Insert "by certified teachers" Page 2, line 9, Delete all material. Page 1, line 5, following "study": Delete "(a)" Page 2, line 9: Insert a new bill section to read: "*Sec. 2. AS Sec. 14.07.050. Selection of textbooks. Textbooks for use in the public schools of the sate, including a district offered statewide correspondence study program, shall be selected by district boards for district schools." Page 2, line 7: Insert a new bill section to read: "*Sec. 3. AS (9) establish procedures for the review and selection of all textbooks and instructional materials including textbooks and curriculum materials for statewide correspondence programs before they are introduced into the school curriculum; the review includes a review for violations of AS (9) establish procedures for the review and selection of all textbooks and instructional materials including textbooks and curriculum materials for statewide correspondence programs before they are introduced into the school curriculum; the review includes a review for violations of HB this legislation has been a struggle in the legislature and in the public arena. She surmised that this struggle is due to the new phenomena of computers, which has created a different system of education. Furthermore, there is the federal mandate to leave no child behind. If the state is to follow that mandate, then students should have the opportunity to do whatever works and the state has a responsibility to be sure that every child is learning. Therefore, the question becomes where the line is drawn with regard to pupil-teacher ratios; that is when is it appropriate for a certificated teacher to be involved. She agreed that oversight and passage of the benchmark exams and the High School Qualifying Exam are necessary. Regarding the amendment, Representative James turned to the area of accreditation and said that were she convinced of what accreditation does for a school, she would want every school in the state to be accredited. She pointed out that with this amendment this would be the only place in statute where accreditation is mentioned. She said she would be willing for accreditation to be included if it was available for other schools as well. CHAIR BUNDE said that if the accreditation portion was eliminated, it would eliminate a tool from correspondence schools. REPRESENTATIVE JAMES pointed out that Amendment 1 inserts the language specifying that the once a correspondence program application is approved by the department the program won't be required to submit a new application more frequently than every ten years if the program is designated as distinguished or successful under AS by the Northwest Association of Schools and Colleges. She questioned how much more successful do "we" want them to be. CHAIR BUNDE surmised that Representative James would rather eliminate subparagraph (A) from the new material being inserted on page 1, lines 9-12. REPRESENTATIVE JAMES said that she wasn't that hung up on the five year requirement, but believes that deleting all of subparagraph (B) would be appropriate. CHAIR BUNDE inquired as to the wish of the committee. Number 2310 REPRESENTATIVE GREEN pointed out that accreditation is voluntary and thus he didn't see a problem with including it. CHAIR BUNDE noted that part of the challenge has been that there has been a significant level of discomfort between the department and the correspondence people. Chair Bunde said that he didn't want to add to the level of distrust. REPRESENTATIVE JAMES said that she didn't want to make the rules for review any stricter than those for charter schools. DR. McLAIN answered that correspondence schools and charter schools aren't an exact apples to apples comparison. For instance, charter schools are required to have a specific academic council review and set policy and direction, which isn't currently required of the correspondence programs. Furthermore, charter schools, not correspondence programs, are required to obtain local school board approval as well as the approval from the state board. The application renewal for charter schools was recently changed to every ten years, he mentioned. CHAIR BUNDE announced that next week discussion of the amendment would continue. [HB ADJOURNMENT There being no further business before the committee, the House Special Committee on Education meeting was adjourned at 10:04 a.m.

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