Legislature(1995 - 1996)

02/21/1995 03:04 PM House HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
          HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES                          
                       STANDING COMMITTEE                                      
                       February 21, 1995                                       
                           3:04 p.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Cynthia Toohey, Co-Chair                                       
 Representative Con Bunde, Co-Chair                                            
 Representative Gary Davis                                                     
 Representative Norman Rokeberg                                                
 Representative Caren Robinson                                                 
 Representative Tom Brice                                                      
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 Representative Al Vezey                                                       
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 BRIEFING:Impact Aid and Local Revenues, by Duane Guiley,                     
 Department of Education.                                                      
                                                                               
 HB 28:"An Act relating to the possession of weapons within the               
 grounds of or on the parking lot of preschools,                               
 elementary, junior high, and secondary schools or while                       
 participating in a school-sponsored event; requiring the                      
 expulsion or suspension of students possessing deadly                         
 weapons on school grounds; and relating to school lockers                     
 and other containers provided in a public or private                          
 school by the school or the school district."                                 
                                                                               
   PASSED OUT OF COMMITTEE                                                     
                                                                               
 HB 94:"An Act relating to the management of public schools by                
 a private agency."                                                            
                                                                               
   HEARD AND HELD                                                              
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 DUANE GUILEY, Director of School Finance                                      
 Department of Education                                                       
 Goldbelt Building                                                             
 801 W. 10th Street, Second Floor                                              
 Juneau, AK  99801                                                             
 Telephone:  (907) 465-8679                                                    
 POSITION STATEMENT:  Briefed HESS Committee members on Impact Aid             
                      and Local Revenues.                                      
                                                                               
 REPRESENTATIVE CON BUNDE                                                      
 Alaska State Legislature                                                      
 State Capitol, Room 108                                                       
 Juneau, AK  99801                                                             
 Telephone:  (907) 465-4843                                                    
 POSITION STATEMENT:  Testified for and provided sponsor statement             
                      for HB 28.                                               
                                                                               
 HELEN MEHRKENS, Health Education and Health Program Coordinator               
 Department of Education                                                       
 801 W. 10th Street                                                            
 Juneau, AK  99801                                                             
 Telephone:  (907) 465-8730                                                    
 POSITION STATEMENT:  Testified in support of HB 28.                           
                                                                               
 MARGOT KNUTH, Assistant Attorney General                                      
 Department of Law                                                             
 Court Building, Room 717                                                      
 Juneau, AK  99801                                                             
 Telephone:  (907) 465-3428                                                    
 POSITION STATEMENT:  Testified in support of HB 28.                           
                                                                               
 REPRESENTATIVE JEANNETTE JAMES                                                
 Alaska State Legislature                                                      
 State Capitol, Room 102                                                       
 Juneau, AK  99801                                                             
 Telephone:  (907) 465-3743                                                    
 POSITION STATEMENT:  Provided sponsor testimony for HB 94.                    
                                                                               
 MIKE FORD, Legislative Legal Counsel                                          
 Legislative Affairs Agency                                                    
 130 Seward Street, Suite 404                                                  
 Juneau, AK  99801                                                             
 Telephone:  (907) 3867                                                        
 POSITION STATEMENT:  Testified in support of HB 94.                           
                                                                               
 SHEILA PETERSON, Special Assistant                                            
 Department of Education                                                       
 801 West 10th Street, Suite 200                                               
 Juneau, AK  99801                                                             
 Telephone:  (907) 465-2803                                                    
 POSITION STATEMENT:  Listen only.                                             
                                                                               
 CARL ROSE, Executive Director                                                 
 Association of Alaska School Boards                                           
 316 W. 11th Street                                                            
 Juneau, AK  99801                                                             
 Telephone:  (907) 586-1083                                                    
 POSITION STATEMENT: Testified in support of HB 94.                            
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HB  28                                                               
 SHORT TITLE: POSSESSION OF GUNS ON SCHOOL PROPERTY                            
 SPONSOR(S): REPRESENTATIVE(S) BUNDE, Rokeberg, Green, Toohey, Kott,           
 Elton                                                                         
                                                                               
 JRN-DATE      JRN-PG              ACTION                                      
 01/06/95        28    (H)   PREFILE RELEASED                                  
 01/16/95        28    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/16/95        28    (H)   HES, JUD, FIN                                     
 01/18/95        75    (H)   COSPONSOR(S): GREEN                               
 01/20/95       104    (H)   COSPONSOR(S): TOOHEY                              
 01/27/95       161    (H)   COSPONSOR(S): KOTT, ELTON                         
 02/14/95              (H)   HES AT 03:00 PM CAPITOL 106                       
 02/14/95              (H)   MINUTE(HES)                                       
 02/21/95              (H)   HES AT 03:00 PM CAPITOL 106                       
                                                                              
 BILL:  HB  94                                                                
 SHORT TITLE: PRIVATE MANAGEMENT OF PUBLIC SCHOOLS                             
 SPONSOR(S): REPRESENTATIVE(S) JAMES                                           
                                                                               
 JRN-DATE     JRN-PG               ACTION                                      
 01/18/95        69    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/18/95        70    (H)   HES, JUD, FIN                                     
 02/09/95              (H)   HES AT 03:00 PM CAPITOL 106                       
 02/09/95              (H)   MINUTE(HES)                                       
 02/21/95              (H)   HES AT 03:00 PM CAPITOL 106                       
                                                                               
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 95-8, SIDE A                                                             
 Number 052                                                                    
                                                                               
 CO-CHAIR CON BUNDE called the meeting of the House Health,                    
 Education and Social Services (HESS) Standing Committee to order at           
 3:04 p.m.  Present at the call to order were Representatives Bunde,           
 Toohey, Rokeberg and Davis.  Co-Chair Bunde announced that a quorum           
 was present and read the calendar.                                            
                                                                               
 HHES - 02/21/95                                                              
 BRIEFING ON IMPACT AID AND LOCAL REVENUES                                    
                                                                               
 Number 098                                                                    
                                                                               
 DUANE GUILEY, Director of School Finance, Department of Education             
 (DOE) introduced fellow staff member Eddie Jeans, Project                     
 Administrator, who does the calculations of federal disparity and             
 presents the information to the U.S. Office of Impact Aid annually            
 and negotiates any changes in the DOE's disparity trust                       
 calculations with that office.                                                
                                                                               
 MR. GUILEY had provided the HESS Committee members with two                   
 handouts.  One handout referred to basic need and the DOE's                   
 disparity formula, and the other contained the actual calculations            
 of the DOE's federal disparity for 1993.  Mr. Guiley said that                
 basically, under the federal law, disparity is the recognition of             
 difference in either revenue or expense available to support each             
 student at individual school districts within each state.                     
                                                                               
 MR. GUILEY continued that the methodologies and procedures had been           
 established in regulation prior to October 1994.  When the federal            
 law was reauthorized in October 1994, the definition of disparity             
 and the procedural calculations were moved into federal law.  The             
 disparity limit and the year of data to be used to measure                    
 disparity was also changed within the federal law. Prior to October           
 1994, disparity had been set at a maximum of 25 percent, and it               
 used current year data to determine whether or not a state was in             
 compliance.  Under the new federal law, the 25 percent applies to             
 fiscal years 1995, 1996 and 1997, and then it is reduced to 20                
 percent in fiscal years (FY) 98 and 99.  The federal law further              
 provides that the data a state will use is from two fiscal years              
 prior.                                                                        
                                                                               
 MR. GUILEY explained that the law took effect in October 1994,                
 which was partly into FY 95 and then stated that 1993 data would be           
 used to determine if the DOE was in compliance in 1995.  So the               
 1993 data was used twice, once for FY 93 and once for FY 95.  In              
 1996, that data will be the first data used for a 20 percent year,            
 which is 1998.  There is an exception in the federal law, which               
 says that if a state substantially revises its funding formula and            
 submits that revision to the U.S. Secretary along with preliminary            
 or estimated data that shows the state intends to keep disparity to           
 a maximum 20 percent limit, and further provides an assurance that            
 if based on audited data after the year ends the state is not                 
 within the 20 percent disparity limit, the state will refund any              
 amounts deducted from districts that received impact aid.                     
                                                                               
 MR. GUILEY said that if the state is willing to provide that                  
 application to the U.S. Secretary, then the U.S. Secretary can                
 allow the state an exception from the two year data rule and allow            
 current year data to be used under the new formula.                           
                                                                               
 Number 350                                                                    
                                                                               
 MR. GUILEY continued that there is the possibility of either                  
 maintaining disparity at less than 20 percent during FY 96, or in             
 fact having a new formula in place to be implemented for FY 98 and            
 therefore, disparity can go up as high as 25 percent in FYs 96 and            
 97 and not be out of compliance in FY 98.                                     
                                                                               
 Number 379                                                                    
                                                                               
 MR. GUILEY said that disparity is calculated differently in the               
 state of Alaska than in other states because this state's method of           
 distributing revenue to school districts is based on an                       
 Instructional Unit (IU), not based on a per-student standard.  If             
 the DOE is successful in a reauthorization of the federal impact              
 aid to have a section put into the law to allow the DOE to use the            
 IU formula, Alaska's disparity will be measured based on the IU,              
 which is the relative value of each IU at each of Alaska's 54                 
 districts and Mt. Edgecumbe.  DOE is allowed to ignore the top 5              
 percent of the wealthiest Ius, and the lowest 5 percent of the                
 poorest units.  Disparity is therefore measured based on the 90               
 percent of the units that are left.  Disparity is measured based on           
 revenue and not expense because the Alaska law does not control               
 expenditures, it only controls the method of distributing revenue.            
                                                                               
 MR. GUILEY said that unique to the state of Alaska, the actual                
 disparity standard is the difference in revenue available to                  
 support each IU at each of the 54 districts and Mt. Edgecumbe                 
 within the state based upon local, state and certain federal                  
 revenues.                                                                     
                                                                               
 Number 470                                                                    
                                                                               
 MR. GUILEY showed HESS Committee members one of the handouts which            
 showed that one adjusted IU is worth $61,000.  The potential                  
 sources of that $61,000 include state foundation aid, federal                 
 impact aid, and in the case of city and borough districts, the                
 required four mill local contribution.  Those are the three sources           
 that contribute to the $61,000.  Basic need, under the state law,             
 is simply the total number of units multiplied by the area                    
 differential unique to that district, multiplied by the unit value.           
 The unit value is set in statute at $61,000.                                  
                                                                               
 MR. GUILEY said current statute allows city and borough districts             
 that have resource to tax, to contribute an amount in excess of               
 basic need which is not to exceed 23 percent of the basic need                
 calculation.  Or, based on unit value, that is another $14,030.               
 This is on top of the minimum state aid, the federal impact aid and           
 that four mills minimum local contribution.  He said that some                
 people have come to think of local caps as being four mills plus              
 two mills equals six mills, but they are confusing two issues.                
                                                                               
 MR. GUILEY explained that the four mills comprises the minimum                
 local contribution, the 23 percent of basic need accounts for the             
 allowable excess.  Also included in state law is for those                    
 districts that have extreme tax wealth, if they first reach 35                
 percent of basic need before they reach four mills, they will                 
 contribute 35 percent, as a minimum, and then they are allowed a              
 two mill excess.  So it is a combination of the two ideas that                
 brings people to the six mills figure, but the six is not set forth           
 in statute.                                                                   
                                                                               
 MR. GUILEY continued that therefore, 23 percent is the allowable              
 excess that he was speaking of.  Twenty-three percent correlates              
 closely with disparity but does not mean that is what the state's             
 disparity is.  Over the last several years the state's disparity              
 has ranged from about 23.4 percent to 19.25 percent.  Throughout              
 the life of this current formula, which came into effect for FY 98,           
 the excess local contribution allowed began at 21 percent.  Then it           
 increased to 23 percent based on pressure to want to contribute               
 more at the local level.  So while the local contribution cap has             
 been at 23 percent, the actual disparity has exceeded 23 percent.             
                                                                               
 MR. GUILEY said that part of the reason for this is that the local            
 cap does not control, or, as an example, transfers into the general           
 fund from other funds.  It only controls the amount of excess local           
 contributions that can happen.  So there are other activities that            
 take place at the school district level that are outside of this              
 cap.                                                                          
                                                                               
 MR. GUILEY presented the final page of his handout.  It showed that           
 the total value, including the excess local on the unit basis of              
 $75,030, is what is controlled within state statute.  So the DOE              
 simply makes a comparison of the top end unit value with the low              
 end unit value.  The difference is calculated and then the                    
 disparity is calculated from that figure.  The low end unit value             
 is normally set by the Regional Education Attendance Area (REAA)              
 districts, or those districts that do not have access to local                
 taxes.  The high end value traditionally is set by one of the city            
 and borough districts that has access to local contributions.                 
                                                                               
 Number 697                                                                    
                                                                               
 MR. GUILEY presented one more document which was a copy of the                
 actual disparity calculation for FY 93.                                       
                                                                               
 CO-CHAIR BUNDE asked for examples of top and bottom end districts.            
                                                                               
 MR. GUILEY answered that in 1993, the top end was Ketchikan, at               
 $75,025.  The low end district was the lower Kuskokwim school                 
 district at $ 62,621.                                                         
                                                                               
 CO-CHAIR BUNDE asked if there were any school districts that                  
 actually made the $61,000 figure.                                             
                                                                               
 MR. GUILEY answered no, all districts are above the $61,000 figure            
 because of local interest earnings and other revenues outside of              
 basic need.                                                                   
                                                                               
 Number 745                                                                    
                                                                               
 MR. GUILEY said that the final two-page document containing the               
 actual disparity calculations that are presented to the federal               
 government along with several pages of backup material shows that             
 the DOE accounts for the actual foundation payments, any                      
 adjustments that come from the audit, and other state revenues.               
 The calculations also account for each of the local revenues                  
 including in-kind contributions or the valuation of services that             
 are not purchased but are provided by the city and borough to the             
 school district.  These figures help in the calculation of the                
 subtotal of the local revenue.                                                
                                                                               
 MR. GUILEY continued that also looked at are federal revenues,                
 including the deductible portion of the impact aid and other                  
 federal revenues.  These figures are used to get a total which                
 includes transfers into the general fund from other funds.                    
                                                                               
 MR. GUILEY showed HESS Committee members a column on his documents            
 which showed the FY 93 audited total revenues.  Another column                
 showed the adjusted units.  Under the federal law, the DOE is                 
 allowed to exclude any costs that are associated with unique                  
 geographic factors, with special needs students, or with any other            
 factor that relates to the state's unique profile of students.                
                                                                               
 MR. GUILEY said that in the state of Alaska the unit formula is               
 such that if those things such as area differentials and special              
 needs students are ignored, the actual disparity tends to increase            
 because the urban districts then have less units over which to                
 spread their local dollars.  Mr. Guiley reminded the HESS Committee           
 members that the relative value of a unit was being measured.                 
 Therefore, if a fixed pool of local dollars is used, as the number            
 of units goes down, the relative value of each unit goes up.                  
 Because the state law controls basic need, the local municipality             
 controls the excess local contribution.                                       
                                                                               
 MR. GUILEY explained that in the REAAs where they have no access to           
 tax, there is access to certain things such as interest earnings,             
 facility rentals, disposal of assets, etc., which potentially                 
 transfer in from other funds which increases their unit value above           
 the $61,000.                                                                  
                                                                               
 MR. GUILEY referred back to his handout.  He said the DOE is                  
 allowed, under federal law, to exclude the wealthiest five percent.           
 In 1993, the calculations showed there were 11,806.51 Ius.  Five              
 percent of that number allows the DOE to exclude 590.33 at the top            
 and the bottom.  The units are ranked in value sequence from the              
 most wealthiest or expensive unit to the poorest unit.  The DOE               
 then subtracts from the top until they hit the number of 590.                 
                                                                               
 Number 900                                                                    
                                                                               
 MR. GUILEY continued that when the calculations reach the district            
 of Ketchikan, all of Ketchikan's Ius cannot be excluded because the           
 590 figure would be exceeded.  Therefore, Ketchikan sets the high             
 value figure in 1993.  The same process is repeated from the                  
 bottom.  In rank order, Ius are subtracted until 590 is reached.              
 They reached Lower Kuskokwim, which has 565 units by itself.  Of              
 course, all of their Ius cannot be eliminated.  Thus, Lower                   
 Kuskokwim set the bottom figure in 1993.                                      
                                                                               
 MR. GUILEY explained that the top and bottom figures are compared,            
 the difference is calculated, and that difference is set in a                 
 percentage.  In 1993, this number cannot exceed 25 percent.  This             
 particular year's figure was 19.81 percent.  A preliminary figure             
 has been calculated for 1994, which is 20.15 percent.  The                    
 preliminary number for 1995 is 20.66 and is based upon projections            
 because the fiscal year is not yet over.                                      
                                                                               
 MR. GUILEY said that once again, there is a general trend toward              
 rising disparity because of the push for more local dollars due to            
 the IU value being held at $61,000.  With no increase in state aid,           
 and with loss of buying power, there is more pressure on the local            
 government to contribute more to schools.  As those local dollars             
 come in, it increases disparity.  At the same time, interest                  
 earnings and other earnings in the REAAs are being held at lower              
 levels as compared to other years.  Therefore, disparity is                   
 generally on the incline.                                                     
                                                                               
 Number 985                                                                    
                                                                               
 MR. GUILEY said the DOE must submit by March 1 to the federal                 
 government, the state's 1994 preliminary data to be used for the              
 state's new disparity.  The federal government is presently trying            
 to draft regulations on how the new law is implemented.  The                  
 federal government is building regulations while the state is                 
 trying to decide how the state's data is submitted.  Therefore, Mr.           
 Guiley said the HESS Committee members may have some questions he             
 cannot answer because federal regulations are not even out for                
 public comment.                                                               
                                                                               
 MR. GUILEY concluded by saying that a memo was sent out to all                
 school districts in November 1994 indicating that possibly the DOE            
 would be going forward with regulations that would restrict local             
 contributions in order to stay in compliance with the federal                 
 disparity standard.  Alaska Statute 14.17.025 provides for the DOE            
 to promulgate such regulations if necessary to stay in compliance             
 with disparity standards.  At the present time, the DOE is not                
 recommending to the state's Board of Education that the state go              
 forward with such regulations.  Rather, the Administration is going           
 to rewrite a formula and have it in place by FY 98 that would in              
 fact be in compliance with the 20 percent disparity standard.                 
 Therefore, the DOE would not have to restrict districts' ability to           
 contribute now at the 23 percent limit, which is set forth in                 
 statute.                                                                      
                                                                               
 Number 1060                                                                   
                                                                               
 MR. GUILEY said that districts had been put on notice in November             
 by memo in the event that those regulations were available for                
 public comment.  At the present time, they are not recommending               
 that to the Board of Education.  This does not mean they will not             
 have to make an emergency regulation at a later date, after there             
 has been a discussion with the board.  The board's first meeting is           
 February 27 and 28.                                                           
                                                                               
 CO-CHAIR BUNDE announced that Representative Brice joined the                 
 meeting at 3:08 p.m., and Representative Robinson joined the                  
 meeting at 3:18 p.m.                                                          
                                                                               
 Number 1097                                                                   
                                                                               
 CO-CHAIR BUNDE stated for the general public's information that the           
 highest cost per adjusted unit school district in the state of                
 Alaska is the North Slope at $133,056, and the least expensive is             
 the Denali district at $61,581.  Obviously, this is why there is a            
 disparity formula.  In other states in the U.S., this formula was             
 used, Co-Chair Bunde thought, to punish some school districts who             
 lived in various parts of the state.                                          
                                                                               
 CO-CHAIR BUNDE asked Mr. Guiley how single-site schools impact the            
 disparity problem.                                                            
                                                                               
 MR. GUILEY answered that the second wealthiest unit in the state --           
 St. Mary's was used as an example at $91,833 -- was partially the             
 result of St. Mary's receiving a single-site supplement which is              
 outside of the foundation formula.  The federal definition is a               
 very simple one of which revenue must be included.  The definition            
 is any state aid, no repayment of which is required, that is                  
 available for current operations, must be included.  So because the           
 single-site supplement is coming outside of the foundation law, and           
 does not carry Ius with it, it again raises the relative value of             
 IU in the single-site districts.  So a number of the single sites,            
 in a relative basis for a unit value, are up toward the top of the            
 list.  This includes such districts as St. Mary's, Hoonah, Galena,            
 Yakutat, Klawock, Kake, Wrangell, Petersburg, etc.  They tend to be           
 higher because other state revenues must be included in the                   
 calculation.                                                                  
                                                                               
 MR. GUILEY continued that when the 1993 disparity was run, assuming           
 those single-site supplements were not there, the disparity was               
 actually lowered about .25 percent.  When the 1994 preliminary data           
 was run without the single-site supplement, there was no change in            
 the actual disparity.  It did make a difference in the relative               
 placement in the units on the list.  But the actual disparity was             
 unchanged.  The DOE has not yet run the 1995 preliminary figures              
 without single-site factors.  It has only been run based on                   
 people's budgets which includes the single-site supplement.  Mr.              
 Guiley is not sure whether it would affect the 1995 figure or not.            
                                                                               
 CO-CHAIR BUNDE announced that the meeting was on listen-only                  
 teleconference with   Anchorage.                                              
                                                                               
 Number 1250                                                                   
                                                                               
 CO-CHAIR CYNTHIA TOOHEY asked what was being done with the money              
 for Adak.  Was it simply not being counted in the 1993 figures?               
 She also asked if she was correct that there is no funding for                
 Adak.                                                                         
                                                                               
 MR. GUILEY answered that Adak school district is in a unique                  
 situation in that they have projected about 150 students this year.           
 Under the current state law, they are allowed to receive 75 percent           
 of the state aid they received last year based on the number of               
 students enrolled.  When the Adak military base was closed and the            
 district realized it would have no students, the superintendent               
 wrote a letter to the commissioner asking the commissioner to                 
 withhold all state aid.  Presently, the Adak district is existing             
 solely on federal impact aid.  Whether or not the amount of state             
 aid which the district is eligible for is included in calculations            
 which the disparity figures are calculated, will depend on the                
 final outcome of the year.                                                    
                                                                               
 Number 1309                                                                   
                                                                               
 CO-CHAIR BUNDE admired Mr. Guiley's ability to have such a command            
 of the disparity process.  He recalled the difficulty a previous              
 Administration encountered when it tried to rewrite the formula.              
 He asked Mr. Guiley how, if changes are not made, impact funding              
 would affect the funding for schools in the HESS Committee members'           
 districts.                                                                    
                                                                               
 MR. GUILEY said that basically, one of a number of different                  
 scenarios will be realized if a new formula is not in place for FY            
 98.  One option is to go to the U.S. Congress and request some                
 relief from the new 20 percent disparity standard, and hope to                
 extend the 25 percent.  Meanwhile, the state would continue to move           
 forward working on a formula that might be in place in 1999, if not           
 in 1998.                                                                      
                                                                               
 MR. GUILEY continued that under the current state law, if there is            
 not a new formula in place and the state is obligated to continue             
 using the existing formula, the DOE would ask the legislature for             
 an increment in general fund revenue to support the foundation                
 program.  Based upon FY 95, that amount would be about $43 million.           
 Based on their FY 95 projection, that amount would be about $35               
 million.  Therefore, using the budget amount for FY 96 as an                  
 example, if that were the number in 1998, the DOE would be asking             
 the legislature for a general fund increment of $35 million to take           
 the place of the loss of impact aid in the formula.                           
                                                                               
 MR. GUILEY said that if the legislature did not grant that amount,            
 under the current state law the IU value would be prorated.  That             
 would result in a proration of the unit value of just less than               
 $3,000, or about $2,850.                                                      
                                                                               
 Number 1400                                                                   
                                                                               
 CO-CHAIR BUNDE asked if the original $61,000 amount would be                  
 deducted $2,850.                                                              
                                                                               
 MR. GUILEY answered that Co-Chair Bunde was correct. The figure               
 would drop to about $58,250.  That would be the new estimated                 
 prorated value for FY 98 if there is no new formula in place, or if           
 the state does not get relief from U.S. Congress, and if the                  
 legislature decides not to fund the increment.  Of course, there              
 are a number of unknowns, including the value of impact aid in                
 1998.  Under the current law, the entitlement value, or the                   
 reauthorized law, for the state of Alaska is about $44 million.               
 Currently budgeted for FY 96 is $35 million, because the U.S.                 
 Congress has chosen to short-fund the program.                                
                                                                               
 MR. GUILEY continued that the DOE recognizes the impact aid one               
 year after it is received by its districts, so the DOE knows in               
 advance the amount of money available.  Mr. Guiley wondered what              
 the amount would be in 1997.  There are already estimates that in             
 President Clinton's new budget, the impact aid is reduced another             
 26 percent.  The state's deduct rate on impact aid is about 60                
 percent of total receipt.  Therefore, with a 26 percent reduction             
 a the federal level, 60 percent of that would be a general fund               
 increment again.  At the same time, the DOE would be asking for an            
 increment of growth in student population, which averages two to              
 two and one-half percent per year.                                            
                                                                               
 Number 1477                                                                   
                                                                               
 MR. GUILEY summarized that the unknowns are what will the value of            
 the impact aid deduct be, whether or not the state can get any                
 relief from congress, and whether or not a formula can get through            
 the legislature next year.  If a formula does not go through next             
 year, there is some doubt whether or not the DOE could actually               
 submit by March 1, 1997, this substantially revised formula that              
 would meet the approval of the U.S. Secretary based on the                    
 preliminary data, to allow the state to move forward to current               
 year data and not use the two-year-old data.                                  
                                                                               
 MR. GUILEY said that right now, it appears the state will be over             
 the 20 percent disparity standard in 1996 if something does not               
 occur.  Mr. Guiley reiterated that currently, the figure is 19.81             
 percent, 20.15 percent was calculated for 1994, and the preliminary           
 figure for 1995 is 20.66 percent.  The percentage is going up.                
                                                                               
 MR. GUILEY added that is not to say the legislature could not step            
 in, in the middle of the year in 1996, and say something needs to             
 be done now to control disparity.  The legislature could do                   
 something through the foundation law.  If something is done through           
 the law, it will be subject to less challenge in the federal court            
 and in the federal arena as far as impact aid appeals.  If changes            
 are done outside the law, such as through a supplemental such as a            
 single-site supplemental, there is more occurrence of challenges.             
 Currently the DOE is defending those at the federal level.                    
                                                                               
 Number 1541                                                                   
                                                                               
 CO-CHAIR BUNDE summarized for the HESS Committee members.  There              
 are three options.  The state can expect a miracle from Congress,             
 that it rushes to provide Alaska with special considerations.  Co-            
 Chair Bunde felt that the possibility of this was pretty low.  Or             
 the state could come up with an increment of $40 million in the               
 face of declining budgets and budget cuts.  Or the foundation                 
 formula can be changed.                                                       
                                                                               
 CO-CHAIR BUNDE said a big job is cut out for the state, because               
 there is really only one option.  He thanked Mr. Guiley for the               
 briefing.                                                                     
                                                                               
 HHES - 02/21/95                                                               
 HB 28 - POSSESSION OF GUNS ON SCHOOL PROPERTY                               
                                                                               
 Number 1640                                                                   
                                                                               
 CO-CHAIR BUNDE said this bill addresses a problem which                       
 unfortunately has not gone away since the bill was last seen.                 
 There is an added complication and incentive to address the bill              
 this year.  This year, the state of Alaska is required to address             
 this issue or the state stands to lose federal funding.  In light             
 of the previous briefing, the state cannot stand to threaten any              
 more federal educational funding.                                             
                                                                               
 CO-CHAIR BUNDE said that the Federal Gun-Free Schools Act was                 
 passed by Congress.  It requires that certain conditions be met               
 before the state receives federal education funds.  The purpose of            
 HB 28 is to put the state of Alaska into compliance with the                  
 federal mandate and to address a growing problem in Alaska.  This             
 problem is students who bring guns to school.                                 
                                                                               
 CO-CHAIR BUNDE summarized the bill.  He said the possession of a              
 deadly weapon on school grounds, in the parking lots adjacent to              
 schools or while participating in a school-sponsored event will be            
 prohibited.  However, a person can obtain permission from a chief             
 administrative officer of a school to carry a prohibited weapon on            
 school grounds to make allowances for school rifle teams and that             
 sort of thing.  The restrictions do not apply to sworn law                    
 enforcement officers of course.                                               
                                                                               
 CO-CHAIR BUNDE said this bill requires a one-year expulsion or                
 suspension of a student that possesses a weapon on school grounds             
 and that is to bring the state into compliance with the federal               
 mandate.  In addition, the bill requires an annual report to the              
 DOE regarding the number of students expelled and the types of                
 weapons involved.                                                             
                                                                               
 Number 1728                                                                   
                                                                               
 CO-CHAIR BUNDE said that in researching this bill, it was found               
 that schools are not always interested in providing accurate                  
 information about such incidents because it makes the school look             
 bad.  To Co-Chair Bunde, this is an attempt to sweep the problem              
 under the rug in some cases.                                                  
                                                                               
 CO-CHAIR BUNDE continued that the legislation also allows school              
 lockers to be searched to determine compliance with school                    
 regulations and state and federal laws.   The policy on locker                
 searches must be posted prominently throughout the school.  These             
 are random searches.  The school is not allowed to target a                   
 particular student or group of students.  The lockers are public              
 property and the students are using them.  In many schools the                
 students share lockers so this is not necessarily a personal issue.           
                                                                               
 Number 1800                                                                   
                                                                               
 CO-CHAIR BUNDE also said that he found out, through research, that            
 lockers were the center of criminal activity in many Lower 48                 
 schools.  Lockers were where many dangerous and deadly weapons were           
 kept, as well as contraband.  It was also where law abiding                   
 students were being robbed.  Some school districts have removed all           
 lockers, resulting in considerable drops in theft and violence.               
 Other schools require see-through back packs.  Fortunately, Co-               
 Chair Bunde did not think Alaska was at that level.  But there are            
 problems that must be addressed regarding guns in schools, and this           
 bill will go a long way toward solving Alaska's problems.                     
                                                                               
 Number 1837                                                                   
                                                                               
 REPRESENTATIVE TOM BRICE asked if HB 28 was exactly the same bill             
 which passed the HESS committee last year.                                    
                                                                               
 CO-CHAIR BUNDE answered no, not exactly, because the requirements             
 of the federal law were now addressed.                                        
                                                                               
 CO-CHAIR TOOHEY asked for a motion to adopt the Committee                     
 Substitute (CS) for HB 28.                                                    
                                                                               
 REPRESENTATIVE GARY DAVIS so motioned.  There were no objections              
 and the CS was adopted.                                                       
                                                                               
 Number 1890                                                                   
                                                                               
 HELEN MEHRKENS, Health Education and Health Program Coordinator for           
 the Department of Education, said that part of her duties is to               
 coordinate the Safe and Gun-Free Schools Act which is a federal Act           
 which comes to the DOE and to the schools in Alaska.  Related to              
 that is the Gun-Free Schools Act mentioned by Co-Chair Bunde.  She            
 has been working with districts for several months in an attempt to           
 get the districts in compliance with that Act.                                
                                                                               
 MS. MEHRKENS continued that Co-Chair Bunde has already identified             
 the major components of the federal bill.  One is that if the state           
 is going to continue to receive $90 million in elementary and                 
 secondary education act funds, which are the primary grant funds to           
 school districts in this state, districts must come into compliance           
 with the federal Act which requires school districts to expel                 
 students who bring weapons to schools.  This uses the federal                 
 definition of a deadly weapon.                                                
                                                                               
 Number 1930                                                                   
                                                                               
 MS. MEHRKENS said there is an opportunity for schools, on a case by           
 case basis, to waive that expulsion after the case has been looked            
 at using a hearing process.  The DOE wants to state that it is in             
 favor of compliance with the federal mandate and the DOE hopes HB
 28 will be passed.  This is not only because of the threat of                 
 federal funding, but also because many schools are already in                 
 compliance with the expulsion mandate, and the DOE finds that                 
 everyone is in favor of whatever it takes to make schools a safe              
 place for students.                                                           
                                                                               
 MS. MEHRKENS offered to answer questions.  The DOE has been in                
 constant contact with Co-Chair Bunde's staff as well as the staff             
 at the federal DOE for the most recent interpretations.  The                  
 federal DOE staff has a list of Alaska DOE's questions that they              
 will be answering soon.                                                       
                                                                               
 Number 1976                                                                   
                                                                               
 REPRESENTATIVE DAVIS remembered that last year, when the bill was             
 discussed, there was a question in the villages of what exactly was           
 school property.  In a lot of villages, there are no boundaries               
 from surveys.  A lot of children will run their snowmobiles, etc.             
 down the streets.  If they have rifles and are going hunting, there           
 is a possibility the children will cross school grounds.  He asked            
 Ms. Mehrkens if that issue had been addressed.                                
                                                                               
 MS. MEHRKENS answered that question has been already asked by two             
 districts, but has not yet been addressed.                                    
                                                                               
 CO-CHAIR BUNDE recalled that discussion from last year.  His                  
 original bill required the gun to be unloaded and in a case.  The             
 current federal law simply states that person will not have a gun             
 on school property.  HB 28 was amended previously to make                     
 exceptions for rural schools; however, upon reflection Co-Chair               
 Bunde feels that people pretty much know where school property is.            
 There is no free lunch, and if the districts want federal aid, a              
 person must find out where school property is and keep guns off of            
 it.                                                                           
                                                                               
 Number 2039                                                                   
                                                                               
 REPRESENTATIVE CAREN ROBINSON asked how the bill would affect a               
 school like Juneau in which there is a shooting range in the bottom           
 of the school.                                                                
                                                                               
 MS. MEHRKENS answered that was one of the biggest questions across            
 the state.  In fact, the DOE built many of those ranges.                      
                                                                               
 CO-CHAIR BUNDE interjected that HB 28 does allow for the school               
 administrator to grant permission for such activities.  This is               
 also through the federal policy.                                              
                                                                               
 MS. MEHRKENS said the federal requirements are concerned about                
 students bringing guns to school.  It is not particularly concerned           
 about adults, although that is important to people also.  Actually,           
 the federal definition of "weapon" has an exclusion in it for                 
 sporting, recreation and cultural purposes.  Those are reasons why            
 a school administrator can allow students to bring guns onto school           
 property.  That is understood to mean rifle and gun safety classes,           
 the Junior ROTC programs, etc.                                                
                                                                               
 Number 2085                                                                   
                                                                               
 REPRESENTATIVE BRICE remembered that during last session's                    
 discussion, there was great concern about rural schools where there           
 are wolves, bear, etc., and a weapon is carried for protection.  He           
 remembered that issue was addressed, but those factors are no                 
 longer in the current bill.  He asked if those allowances had been            
 taken out, and if so, is there no leniency with the federal program           
 for those considerations.                                                     
                                                                               
 CO-CHAIR BUNDE said that he attempted to address this issue in                
 Section 1 (A) and (C) which allows for rural exceptions, however,             
 he did not know if this is a question that needs to be addressed by           
 the federal government.  Co-Chair Bunde, at this point, interpreted           
 the mandate to say that the school administrator has the power to             
 grant such exceptions.  It will probably be a formal process,                 
 however.  There will probably be some procedures involved in the              
 exception process.  In reference to the question concerning school            
 boundaries, there is going to be an awareness of those boundaries.            
                                                                               
 Number 2181                                                                   
                                                                               
 REPRESENTATIVE ROBINSON said that in Juneau there is already a gun            
 policy in place.  She does not know what the penalty is for                   
 violating that policy.  HB 28 sounds like there would be automatic            
 expulsion until there was a review.                                           
                                                                               
 MS. MEHRKENS answered that the requirement is that the penalty for            
 bringing a deadly weapon to school is expulsion.  There will always           
 be a hearing and an appeal process.  After that year, the student             
 may go through a type of rehabilitation program which allows them             
 to be placed back in some sort of alternative setting or else be              
 placed back in school more quickly.  Anchorage currently has such             
 a program.  They have a referral program that puts the student                
 through behavior and anger management.  When the student is judged            
 to be rehabilitated and safe, they are allowed back into the                  
 school.  However, it is quite a long program and it is not an easy            
 thing to go through.                                                          
                                                                               
 REPRESENTATIVE ROBINSON said she recognizes and supports the fact             
 that guns should not be brought onto school grounds.  There also              
 needs to be serious penalties for that.  But she has a fear that              
 there will be no rehabilitation program present after expulsion and           
 that society will simply lose these children.  Representative                 
 Robinson asked if such allowances for rehabilitation programs are             
 in the bill.                                                                  
                                                                               
 Number 2253                                                                   
                                                                               
 CO-CHAIR BUNDE answered that the bill does not address the                    
 requirement for alternative programs.  That would be up to the                
 district.  Representative Robinson asked if the bill prohibits such           
 a program, and Co-Chair Bunde answered no.                                    
                                                                               
 MS. MEHRKENS said the bill says the school administrator may, on a            
 case by case basis, reduce or otherwise modify the expulsion or               
 suspension of the student.                                                    
                                                                               
 CO-CHAIR BUNDE said that not all districts in the state have                  
 followed the expulsion policy throughout the Lower 48.  This is one           
 reason why the federal mandate requires the expulsion or                      
 suspension.  There have been cases where a student in one district            
 is expelled, moves down the road to another district, and the                 
 problem is passed on.                                                         
                                                                               
 TAPE 95-8, SIDE B                                                             
 Number 000                                                                    
                                                                               
 REPRESENTATIVE DAVIS asked if the federal law addresses this                  
 problem, and Ms. Mehrkens answered yes.                                       
                                                                               
 MARGOT KNUTH, Assistant Attorney General in the Criminal Division,            
 Department of Law, stated that Alaska Governor Tony Knowles will be           
 introducing a bill on youth and firearms.  This is an issue of                
 concern to him.  This bill is consistent with the Governor's                  
 approach to the general problem and will be coming out later this             
 week.  She noted that the federal Act specifically requires a case            
 by case analysis of student's expulsion.  The federal government              
 fully realizes there may be cases where a full year's expulsion may           
 not be appropriate.  This realization is built into the provision             
 of HB 28.                                                                     
                                                                               
 MS. KNUTH said that in the past there has been concern about the              
 constitutionality of the locker search provision.  She said she               
 would answer questions concerning this.                                       
                                                                               
 Number 113                                                                    
                                                                               
 REPRESENTATIVE NORMAN ROKEBERG asked Ms. Knuth what the problems              
 were revolving around such provisions and also if she would comment           
 on the problems with the definitions of firearms.                             
                                                                               
 MS. KNUTH answered that the Constitution of the United States has             
 a provision that protects people from unreasonable searches and               
 seizures.  The question, therefore, is what is reasonable and what            
 is unreasonable.  In this case, school lockers are the property of            
 the school which is made available to students.  Although there is            
 some uncertainty whether Alaska would follow the federal                      
 interpretation, it is likely that Alaska will.  The way that                  
 provision has been interpreted federally is that if a school                  
 provides notices that the locker is subject to searches for weapons           
 or contraband, the lockers can be searched.  The students do not              
 have a reasonable expectation of privacy in regards to weapons or             
 firearms in their lockers.                                                    
                                                                               
 MS. KNUTH continued by saying the school is prohibited from using             
 any other items that may be found in the locker as a basis for any            
 action against a student.  A fear has been the discovery of birth             
 control in a locker, and whether a student could be expelled for              
 that if they went to a school which disapproved of such a thing.              
 The answer is no.  Birth control is not a contraband item.                    
                                                                               
 MS. KNUTH said that in respect to searching a student, either in              
 a pat down search or in the desire to search a back pack or day               
 pack, there is nothing similar to the consent that you can impute             
 to students who are using a school locker.  The Constitution                  
 applies fully to students for being safe from unreasonable search             
 and seizures of their persons or possessions.  Therefore, it is               
 possible for a person to bring a gun in their purse or back pack              
 and the school does not have any more authority than a police                 
 officer would to search a student for no reason at all.  At the               
 same time, if there is any reason to believe that the student does            
 have a firearm, then there exists the basis for a reasonable search           
 and seizure.  What the government is precluded from doing is acting           
 randomly and like "Big Brother," and intruding anytime and in any             
 place.                                                                        
                                                                               
 Number 314                                                                    
                                                                               
 MS. KNUTH said however, when you have information that suggests the           
 possession of a weapon that is illegal under state law, then there            
 is a basis for the search to be made.                                         
                                                                               
 REPRESENTATIVE ROKEBERG asked if the administrators of the schools            
 will now have to take classes in legal evidence, search and                   
 seizure, and constitutional law provisions to define probable cause           
 and pat down a student.                                                       
                                                                               
 MS. KNUTH said that in fact, in the Lower 48 there are schools that           
 have metal detectors at their entries because that is a                       
 constitutional way of finding guns.  It is a difficult thing to               
 become an expert on what is illegal and what is legal.  It would              
 take some efforts to provide that information.  However, when there           
 is a genuine problem, a person must rise to it and see what can be            
 done.  Ms. Knuth feels that in Alaska, particularly in Anchorage,             
 a point has been reached in which everyone is motivated to try and            
 deal with this problem.                                                       
                                                                               
 Number 326                                                                    
                                                                               
 REPRESENTATIVE ROKEBERG asked if a school administrator would have            
 to abide by the same probable cause standards as a police officer.            
                                                                               
 MS. KNUTH answered yes.                                                       
                                                                               
 REPRESENTATIVE ROKEBERG asked if there were provisions in the state           
 statute which allowed for contraband items.                                   
                                                                               
 MS. KNUTH answered that there was nothing pertaining to contraband            
 items in the statutes.  It is a part of the common law in Alaska.             
 HB 28 is codifying existing law.  It is comforting to have it in              
 the statute.  People will feel more secure in what the limits on              
 the searches are, and the provision concerning notice for searches            
 is a good one.                                                                
                                                                               
 REPRESENTATIVE ROKEBERG asked if there was a need for the statutory           
 provision for contraband to be included in this bill.                         
                                                                               
 MS. KNUTH answered that it was not necessary.                                 
                                                                               
 Number 455                                                                    
                                                                               
 CO-CHAIR BUNDE said that as someone who has some personal                     
 experience with what goes on in schools, he assured the HESS                  
 Committee members that not only administrators but each teacher is            
 aware of their legal limitations when it comes to disciplining or             
 physically touching a child.                                                  
                                                                               
 REPRESENTATIVE BRICE said that a question had been raised about               
 what a school administrator can and cannot do as far as allowing              
 for a special circumstance.  He could not find that wording in the            
 bill and he wondered if there was a specific section that could               
 point to that.                                                                
                                                                               
 MS. KNUTH said that she does not have the CS, but she has HB 28 in            
 front of her.  She read page 4, lines 23 to 25:  The administrative           
 officer of a school district may, on a case by case basis, reduce             
 or otherwise modify the expulsion or suspension of a student under            
 (A) of this section.                                                          
                                                                               
 Number 549                                                                    
                                                                               
 REPRESENTATIVE BRICE said that the student still has to be expelled           
 or suspended.  This does not allow for legitimate reasons for                 
 having the firearm on campus, or for the circumstance in which a              
 rifle is on a three wheeler for hunting and wildlife protection               
 purposes and the person crosses school grounds.                               
                                                                               
 REPRESENTATIVE ROBINSON said that the provision Ms. Knuth just read           
 does not cover these circumstances.  The student must still be                
 suspended or expelled.  This then puts the burden on the student.             
                                                                               
 MS. KNUTH said that the federal definition of a firearm is very               
 unusual.  It excludes rifles for purposes of competition.  Firearm            
 does not mean any gun.  It means the type of gun the federal                  
 government believes should not be on school grounds.  In that                 
 manner, they have addressed Representative Brice's concerns.  If a            
 person has a gun he or she is using for the shooting range, he or             
 she will not be expelled or suspended.  Ms. Knuth does not know if            
 the federal mandate takes into account guns brought for personal              
 safety from wildlife.  That may be something the federal government           
 may want to address for Alaska.  But they dealt with the problem              
 using their peculiar definition of firearm.                                   
                                                                               
 Number 694                                                                    
                                                                               
 REPRESENTATIVE ROKEBERG asked what happens if students share                  
 lockers, and also if there was a type of due process or hearing               
 procedure before expulsion or suspension.                                     
                                                                               
 MS. KNUTH answered that a hearing process is in place for a student           
 who possesses a weapon and should be expelled.  There are due                 
 process provisions.  Ms. Knuth did not have any information with              
 respect to the sharing of lockers.  Generally, in other search and            
 seizure areas, if two people have control over an area, if one                
 person consents to a search, that is binding for the other person.            
 In this case, all students will be consenting to the search of a              
 locker because they are using it on that understanding and on that            
 condition.                                                                    
                                                                               
 REPRESENTATIVE ROKEBERG was concerned about the possibility of two            
 students denying a weapon belonged to either of them, and if there            
 was a procedure in which they could defend themselves.                        
                                                                               
 CO-CHAIR BUNDE said that each school has a disciplinary policy                
 which involves the rights of the students.  This is not addressed             
 in HB 28.                                                                     
                                                                               
 Number 794                                                                    
                                                                               
 REPRESENTATIVE ROKEBERG noticed that there was a provision for the            
 referral to law enforcement authorities, and he was concerned that            
 on page 1, line 10 it talks of misconduct involving a fourth                  
 degree.  Representative Rokeberg asked if these were degrees of               
 misdemeanors.                                                                 
                                                                               
 CO-CHAIR BUNDE said it was a misdemeanor.                                     
                                                                               
 REPRESENTATIVE ROKEBERG said that on page 2, line 22, the word                
 premises is used.  Representative Rokeberg understood the                     
 definition of premises to be an improved property or building, not            
 necessarily land.                                                             
                                                                               
 MS. KNUTH explained that the word premises, for the purposes of               
 this statute, would mean property, improved or unimproved, and                
 boundaries of that property that is owned by or associated with the           
 school.  The word premises is not limited to the building portion             
 of the property.                                                              
                                                                               
 Number 860                                                                    
                                                                               
 REPRESENTATIVE ROKEBERG asked if the word "premises" was being                
 defined in HB 28 for that interpretation.                                     
                                                                               
 MS. KNUTH said that there is a common law definition of "premises,"           
 and she offered to look at Title 11 to see if there was a statutory           
 definition, as well.  It would be very unusual for the statutory              
 definition to differ from the common law definition.                          
                                                                               
 REPRESENTATIVE ROKEBERG said that his use of the word "premises" in           
 real property law is different, and this caused him concern.                  
                                                                               
 CO-CHAIR TOOHEY asked for the pleasure of the HESS Committee.  Co-            
 Chair Bunde motioned that CSHB 28 be moved from the Committee with            
 the accompanying fiscal notes and with individual recommendations.            
 There were no objections and the bill was moved.                              
                                                                               
 HHES - 02/21/69                                                               
 HB 94 - PRIVATE MANAGEMENT OF PUBLIC SCHOOLS                                
                                                                               
 Number 955                                                                    
                                                                               
 REPRESENTATIVE JEANNETTE JAMES explained that her bill authorizes             
 school districts to contract with private agencies to manage                  
 schools.  She has spoken with many teachers.  One of the biggest              
 problems teachers have is that they are not allowed to teach as               
 they know is best for their students.  They may spend much of their           
 time writing reports and performing other administrative duties,              
 and often very little time is spent on teaching.                              
                                                                               
 REPRESENTATIVE JAMES has also heard from teachers that they would             
 like a Reduction In Force (RIF) program, because there are some               
 that are ready to retire and they are just burned out.  She feels             
 that there is a pool of intelligence in Alaska that might be                  
 spirited into doing other things, providing the legislature were to           
 allow private contracting of the management of Alaska schools.                
                                                                               
 REPRESENTATIVE JAMES is not exactly sure whether this law is                  
 necessary.  She thinks that such a decision is probably not                   
 prohibited in the current statutes, and she will have to ask                  
 someone about that.  However, by putting together HB 94, someone              
 may be inspired to contract management to schools.                            
                                                                               
 REPRESENTATIVE JAMES said that the public wants to make our schools           
 more efficient.  They want to make it more effective, they want the           
 students to have higher academic achievements, they want better               
 behavior from students.  Additionally, people are interested in               
 better education for less money.  It appears that in our efforts to           
 determine how we can make the government and education better, the            
 opportunity to contract with private agencies to provide services             
 is an option we ought to consider.                                            
                                                                               
 REPRESENTATIVE JAMES continued that all of the protections that are           
 in place shall remain.  The school board will be the body which               
 still determines what can or cannot happen in the schools.  That              
 would all be in the contract process.  There are some management              
 companies in the Lower 48 which have provided school districts with           
 both good and bad experiences.  However, Representative James feels           
 that we have the human resources here in Alaska to solve problems.            
                                                                               
 REPRESENTATIVE JAMES stated this bill will not change anything if             
 school districts do not want to contract out.  School districts               
 probably would not want to do this unless someone presented a                 
 sufficient plan.  School boards will have the ability to contract             
 to a private agency as opposed to a nonprofit group, and "private             
 agency" indicates that people want to make some money and they know           
 they must work within the confines of the district and the state              
 budget processes.  This is a good step and might open up some good            
 ideas for education in the state.                                             
                                                                               
 Number 1136                                                                   
                                                                               
 CO-CHAIR TOOHEY said there is a fear this bill will be a vehicle              
 for religious schools, and there is a fine line between what people           
 believe is a religious school and a private school which teaches              
 religion.  She asked how this can be prevented.                               
                                                                               
 REPRESENTATIVE JAMES said that all laws currently on the books                
 which prevent public schools from being religious would still                 
 apply.  No existing rules are being modified.  The only thing this            
 bill allows for is permitting the school district to hire a private           
 agency, as opposed to hiring the administration and teachers by an            
 administrative procedure.  This means a group of people may come              
 forward and offer a contract to run such services for a set amount            
 of money.  That contract would have to apply and support all the              
 existing rules and regulations in place for our education system.             
                                                                               
 CO-CHAIR TOOHEY asked if schools could then be run without union              
 teachers.                                                                     
                                                                               
 REPRESENTATIVE JAMES answered yes, this would be the only change              
 because the private agencies would not be required to have union              
 teachers.  The teachers could be union, but it would not be                   
 required.  This would be part of the contract.                                
                                                                               
 Number 1240                                                                   
                                                                               
 REPRESENTATIVE BRICE asked if the private agency could hire                   
 teachers who are not part of the teacher's union, and what                    
 collective bargaining unit teachers would be under considering they           
 are still public teachers and they fall under Title 14.                       
                                                                               
 REPRESENTATIVE JAMES invited Mr. Ford, who helped draft the bill,             
 to testify with her.  She then responded that it would be a public            
 school managed by a private industry.  She believes the private               
 industry would be insulated from the requirement of the teacher's             
 union.                                                                        
                                                                               
 REPRESENTATIVE BRICE understood the people within the                         
 administrative organization would not necessarily be union, but               
 wondered if the teachers in the classroom, considering they are               
 still public employees, would maintain their collective bargaining            
 status.                                                                       
                                                                               
 Number 1314                                                                   
                                                                               
 REPRESENTATIVE JAMES said that teachers would not be public                   
 employees.  They would be employees of the private agency which has           
 a contract to maintain a public school.                                       
                                                                               
 REPRESENTATIVE BRICE clarified that the private agency would not              
 merely be administrative, it would run everything below the school            
 board level.                                                                  
                                                                               
 REPRESENTATIVE JAMES agreed and noted that the private agency could           
 also only run any portion of the district, depending on the                   
 contract.  HB 94 simply makes it an option for school boards.  The            
 boards would be the creative ones to figure out what would work.              
                                                                               
 MIKE FORD, Division of Legal Services, agreed with Representative             
 James.  He said there is flexibility attached to the provision at             
 this time.  A private agency could contract at any level.  There is           
 no requirement that union teachers be hired.  Non-union teachers              
 can be hired as long as they meet the requirements of law.                    
                                                                               
 REPRESENTATIVE BRICE said that Mr. Ford just made him very nervous            
 when he said the agency may contract to run the school board on               
 down.  Representative Brice wanted to know if the school board                
 could be controlled.                                                          
                                                                               
 MR. FORD said the school board would not be replaced, only the                
 management and the administration of the education system if that             
 was the will of the school board.                                             
                                                                               
 CO-CHAIR BUNDE asked for clarification.  Teachers would not be                
 public employees, therefore they would not qualify for the public             
 benefits, health insurance, retirement, etc. Representative James             
 suspected that the private agency would have to take care of that.            
 Those things could be bargained for.                                          
                                                                               
 Number 1418                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG asked if it was being suggested that this             
 could give a school board union-busting power.                                
                                                                               
 REPRESENTATIVE JAMES said that is not the goal of the bill, but it            
 is a possibility.  The goal should be for better schools.  The                
 people that Representative James visualizes could best run the                
 schools is the teachers who are already on retirement.                        
                                                                               
 REPRESENTATIVE ROKEBERG asked if she meant that those teachers                
 could simply form an organization to manage the schools.                      
                                                                               
 REPRESENTATIVE JAMES said, yes.                                               
                                                                               
 Number 1455                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG asked if Representative James was aware of            
 any special education requirements that a school district may have,           
 and if it would be beneficial to a school district to contract out            
 to a private supplier for such special services.                              
                                                                               
 REPRESENTATIVE JAMES said that such a contract would be allowed               
 under this legislation.  Her intent is to make possible any kind of           
 contracting with a public agency that would achieve the goals that            
 the school district would be reaching for, i.e., better education,            
 more efficiency, etc., within the confines of the available funds.            
                                                                               
 REPRESENTATIVE ROKEBERG asked if currently the state law allows the           
 majority of a school board to make a decision about private                   
 management, instead of going to the voters.                                   
                                                                               
 REPRESENTATIVE JAMES said she does not know of any law that would             
 prohibit a school board from making such a decision, however she              
 cannot visualize this happening.  She also cannot imagine the                 
 school board organizing the management.  She imagines the people              
 would bring this option to the school board's attention.  She feels           
 that most likely, the private agency would approach the school                
 board as opposed to the school board looking for a union-busting              
 organization.                                                                 
                                                                               
 Number 1538                                                                   
                                                                               
 REPRESENTATIVE ROKEBERG asked if legally a majority of a school               
 board in this state could make any decision they wanted to.                   
                                                                               
 REPRESENTATIVE JAMES said that as of right now, the answer was yes.           
                                                                               
 REPRESENTATIVE ROBINSON said that she has received many Public                
 Opinion Messages against this bill.  She asked Representative James           
 about her basic feelings about this and why there is so much                  
 negative feedback about this bill.                                            
                                                                               
 REPRESENTATIVE JAMES answered that she has also received those                
 negative messages, and she has been responding to them.  The                  
 opinions are somewhat slanted.  She is not proposing that private             
 industry should come in and take over the schools.  She is                    
 proposing that should be an option for the school board, if in fact           
 the private agency could meet the challenges in a better way.  She            
 is not saying that as soon as this legislation is passed such a               
 thing will happen.  But particularly, in some smaller schools, this           
 could be an option.                                                           
                                                                               
 REPRESENTATIVE JAMES said that one of the problems that exists                
 currently is that teachers have to do a lot of administrative work.           
 A flatter organization could be made out of the school district, in           
 which the teachers at the bottom have more authority about what and           
 how they teach.  This will never happen in the existing system.               
 This legislation is simply to provide an opportunity to make                  
 education less expensive and more efficient and achieve better                
 academic and behavior standards.  Representative James reminded the           
 HESS Committee members that the private agency would have to follow           
 all laws that are currently in place.                                         
                                                                               
 Number 1616                                                                   
                                                                               
 CO-CHAIR TOOHEY said this is a new concept, and that people should            
 not be afraid of new concepts.  Maybe 20 years from now all schools           
 will be privately run.  She commended the bill.                               
                                                                               
 REPRESENTATIVE JAMES said that private management is occurring                
 everywhere.  The nation is in a financial crunch, and so is the               
 state.  The government has to figure out how to meet the needs of             
 the public less expensively and more effectively.  Children cannot            
 graduate without knowing how to read and write.  There used to be             
 a better system.  This has been complicated so now teachers are               
 actually teaching for less time every day.  This is obvious.                  
                                                                               
 CO-CHAIR BUNDE asked if any agencies were waiting in the wings to             
 take advantage of this, or if this legislation was requested by a             
 private agency.                                                               
                                                                               
 REPRESENTATIVE JAMES said the bill was her idea.                              
                                                                               
 Number 1693                                                                   
                                                                               
 REPRESENTATIVE DAVIS reminded Representative James that she said we           
 need to meet the needs of our communities.   Representative Davis             
 felt that we need to provide the opportunity for the community to             
 meet their own needs.   He also asked if such allowances for                  
 private management is necessary and if it is currently allowed.               
                                                                               
 REPRESENTATIVE JAMES said there is nothing that precludes this                
 management from happening, but deferred the question to Mr. Ford.             
 She also said that if it is not outlawed, she assumed that it is              
 "lawed."                                                                      
                                                                               
 MR. FORD said the problems with regional school boards, REAAs, is             
 that their powers are set in statute.  The language being added by            
 the bill simply makes clear they have the power to contract                   
 management.  There are always discussions when there is a list,               
 concerning whether the list limits action to the confines of the              
 list.  In this case, the language gives school districts the                  
 authority to contract out.  This is to avoid argument, if nothing             
 else.                                                                         
                                                                               
 MR. FORD said that for municipal school districts, there is simply            
 not a statute that prohibits them from doing contracting with a               
 private agency.  They could contract management now.  However, to             
 be consistent, Mr. Ford added language to HB 94 that clearly gives            
 school boards authority.                                                      
                                                                               
 REPRESENTATIVE DAVIS said that some language in the bill refers to            
 regional school boards.                                                       
                                                                               
 MR. FORD said Section 2 refers to municipal school districts.                 
                                                                               
 Number 1774                                                                   
                                                                               
 REPRESENTATIVE JAMES said some of the smaller schools in the bush             
 communities are having problems because there are just as many                
 problems that arise when there are too few students as arise when             
 there are too many.  Students learn from each other.  There might             
 be some interest in some of the regional districts to band together           
 to create some sort of boarding school which could be managed on a            
 private basis.  This could take in the students from a number of              
 small schools and offer more educational opportunities to those               
 students.  This just another possibility of how this legislation              
 could be used.                                                                
                                                                               
 Number 1809                                                                   
                                                                               
 REPRESENTATIVE BRICE asked how this would affect state standards,             
 safer teaching certificates, etc., and if the State Board of                  
 Education will have the ability to establish standards for the                
 private agencies before they could take over a school district.               
 He was concerned with unqualified people running the schools.                 
                                                                               
 REPRESENTATIVE JAMES said the existing laws which apply currently             
 would still apply.  If a group wants the contract, they would have            
 to comply with those standards of a public school.  The teachers              
 would have to be certified in the same way.                                   
                                                                               
 REPRESENTATIVE BRICE asked if there was a section in statute which            
 related to administrative standards as well.                                  
                                                                               
 Number 1864                                                                   
                                                                               
 CO-CHAIR BUNDE answered there are requirements for being a                    
 principal.                                                                    
                                                                               
 REPRESENTATIVE BRICE said there are more positions than just                  
 principal, such as information officers and funding officers.  He             
 wanted to make sure that those types of people have some type of              
 knowledge or background.                                                      
                                                                               
 REPRESENTATIVE JAMES said she did not think it was necessary, but             
 maybe that is something that should also be fixed.                            
                                                                               
 REPRESENTATIVE BRICE said there is no certification process for the           
 private agency, and HB 94 was not going to look at such a process.            
                                                                               
 REPRESENTATIVE JAMES said that would have to be established by the            
 local school board, in addition to bonding and other concerns.                
 This legislation is being introduced to open up possibilities.  She           
 thinks that such factors and caveats may come to light in the                 
 future, but she just wants to provide an option.  This legislation            
 is a tool that could be used if the opportunity arose.                        
                                                                               
 Number 1928                                                                   
                                                                               
 CO-CHAIR BUNDE observed that there are credentials for                        
 administrators, but credentials for positions such as school                  
 secretary are determined by district.                                         
                                                                               
 REPRESENTATIVE BRICE said there has been a lot of talk about                  
 statewide performance standards lately.  He assumes that these                
 agencies will have to maintain high standards.  He asked about                
 consistency throughout administrations throughout the state, not              
 that there is a whole lot of consistency at the present time.                 
                                                                               
 REPRESENTATIVE JAMES said that whatever the school district could             
 do in the hiring and firing of their existing system, they could              
 still do after contracting with a private agency.  The same rules             
 that apply to their hiring and firing would still apply in                    
 contracting.                                                                  
                                                                               
 Number 1972                                                                   
                                                                               
 REPRESENTATIVE DAVIS felt that students are after a state                     
 certification.  There are plenty of rules and regulations in place.           
 Teachers are certified and would need to be under additional state            
 law, administrators probably also.  There are administrative                  
 certifications, but whether it is required under state law for a              
 private agency, he didn't know.  The curriculum is directed to a              
 large degree by the local school board.  That is the beauty of this           
 bill, it provides an option, whether it is good or bad.                       
                                                                               
 Number 2044                                                                   
                                                                               
 SHEILA PETERSON, Special Assistant to the Department of Education,            
 said that as a representative of the DOE she was here to observe              
 and listen to dialogue to learn about the possibilities available             
 under this legislation.                                                       
                                                                               
 CARL ROSE, Executive Director, Association of Alaska School Boards,           
 said his organization supports HB 94.  However, he was not privy to           
 all the discussion that just took place.  That discussion has                 
 opened some broad parameters that he would like to clear up.                  
 School boards are political subdivisions of the state.  The                   
 parameters under which a school board operates are set in statutes,           
 regulations, funding constraints set by the legislature, local                
 policies and negotiated agreements.  They operate in an oversight             
 capacity.  He appreciates HB 94 because it provides some options.             
                                                                               
 MR. ROSE continued that he didn't think the options will be                   
 interpreted near as broadly as the sponsor hopes or thinks it might           
 be, simply because the school boards are a political subdivision of           
 the state.  As such, a school board is required to meet the                   
 requirements of the state.  As everyone is aware, four years ago              
 the legislature adopted Title 23, Public Employees Relations Act              
 (PERA), which moved labor relations in under PERA.  At that point,            
 there was a lengthy discussion over the ability of school districts           
 to opt out of PERA, the way many of the municipalities were allowed           
 to do back in the 1970s.  It was decided that the policy of this              
 state would be that all school districts would fall under the                 
 confines of PERA and move from Title 14, where labor relations was            
 addressed, into Title 23, PERA.                                               
                                                                               
 MR. ROSE thought that when it comes down to the interpretation of             
 what we will be able to do with the employees in the state, the               
 rules are already set.                                                        
                                                                               
 MR. ROSE said he did not interpret the bill as allowing for a                 
 private group to come in and hire new employees.                              
                                                                               
 TAPE 95-9, SIDE A                                                             
 Number 000                                                                    
                                                                               
 MR. ROSE said that in some particular areas, this bill will help              
 because the law is not clear.  There are two areas, one of interim            
 superintendencies, and the other is the area which attempts to                
 consolidate administrative services.  First Mr. Rose discussed                
 interim superintendencies.                                                    
                                                                               
 MR. ROSE said when there is a separation between a school board and           
 its superintendent, and it comes in an untimely manner (perhaps               
 mid-year), the school board must find an interim superintendent.              
 Any superintendent must be certified.  They must have a Type A                
 teaching certificate, a Type B administration certificate, and a              
 superintendent endorsement.                                                   
                                                                               
 Number 066                                                                    
                                                                               
 At 4:35 p.m. Co-Chair Bunde announced that he had to leave the                
 meeting to make a quorum elsewhere.  Because there were some                  
 questions which remained unanswered, he asked Co-Chair Toohey to              
 appoint a subcommittee to explore the bill.  He requested to be on            
 the subcommittee and suggested that Co-Chair Toohey be on it also.            
                                                                               
 Number 099                                                                    
                                                                               
 MR. ROSE continued that the position of interim superintendent                
 requires a certificate with an endorsement for superintendent.                
 Normally, you cannot find someone who is available mid-year.  If              
 they are available, you may want to question why they are not                 
 employed and why you would want to hire them.  On the other hand,             
 there happens to be a number of people who are available, and they            
 are retired superintendents.                                                  
                                                                               
 MR. ROSE said this is where interpretation comes into play.  When             
 a person is utilizing the Teachers Retirement System (TRS) and                
 receiving benefits, he or she cannot be serving in a position that            
 requires a certificate as a condition of employment.  There is a              
 conflict there.  Mr. Rose thinks this bill would allow someone to             
 come in and contract for a period of time.  The school board will             
 then have the expertise present while it searches for another                 
 permanent superintendent.                                                     
                                                                               
 MR. ROSE said the second area this legislation would assist is the            
 area of contracting services.  Pelican, for example, has contracted           
 services with the Southeast Regional Resource Center.  They have              
 contracted their superintendent services for $30,000.  This is                
 considerably less than the cost of a full-time employee.  With the            
 remainder of that money, they employed a full-time principal on-              
 site.  The principal's duties are to be responsible for the                   
 operation of the school.  The functions and operations of the                 
 district and operating the school board are left to the executive             
 director of the Southeast Regional Resource Center, which for the             
 record is John Anttonen.                                                      
                                                                               
 Number 219                                                                    
                                                                               
 MR. ROSE said that relationship is working so well that Skagway is            
 looking to do the same thing.  The problem arose when the                     
 commissioner of the DOE raised the concern that since John Anttonen           
 had a certificate and was already using it in Pelican, he should              
 not be allowed to use that same certificate in Skagway.  The                  
 Regional Resource Center is a pretty large organization.  They have           
 a lot of talent in there and they also have other people who have             
 certificates.  But the point is that they are providing a service             
 that allows school districts to exercise their right under the                
 authority of this bill.  This is to hire and contract the services            
 and allow them to put their money into principalships and dollars             
 that go back into the classroom.                                              
                                                                               
 MR. ROSE continued that the question has to be if it is not just              
 the Regional Resource Center, who else might be able to provide               
 that service.  These factors must be looked at.  Mr. Rose cannot              
 imagine a school district deciding to go private with all the                 
 constraints he just mentioned.  Mr. Rose thinks that someone would            
 have to come up with a very good plan to suggest that something               
 like this could work.  He looks at these good plans and proposals             
 as very little more than a campaign.  Many things can be promised             
 on the campaign trail.  Many things can be promised when a person             
 is proposing that they will run a business.                                   
                                                                               
 MR. ROSE explained the problem is that at some point there is a               
 "leaping off point."  When a person signs into a multi-year                   
 contract, it is no different than any superintendency.  That person           
 is responsible for that contract for the duration of that contract.           
 There are a lot of protections already in state law that provide us           
 with the protections that we need.  But this bill does clarify, and           
 it gives us another option to take a look at private agencies.                
                                                                               
 MR. ROSE added the Regional Resource Center is kind of a hybrid in            
 terms of an agency.  It is mentioned in statute; therefore, it is             
 kind of a political subdivision of the state; therefore, many of              
 their employees qualify for TRS benefits.  On the other hand, they            
 are also a 501-C(3), which is a private nonprofit agency, thereby             
 allowing them some proprietary interests to competitively bid for             
 grants from the DOE.                                                          
                                                                               
 Number 387                                                                    
                                                                               
 MR. ROSE questioned if the bill is clear whether the Regional                 
 Resource Center qualifies as a private agency, however, Mr. Rose              
 thinks it does, one way or the other.  For the points Mr. Rose just           
 enumerated, he feels that the bill gives some options.  He also               
 thinks the current statutes provide all the protections that HESS             
 Committee members had concerns about.  Lastly, Mr. Rose thinks that           
 the school board is the one that is probably best qualified to make           
 determinations as to what is most effective for the operation of              
 the schools.                                                                  
                                                                               
 Number 437                                                                    
                                                                               
 MR. FORD said the discussion has covered both ends of the spectrum.           
 The existing law allows one to contract with an agency, and the               
 current bill just says, "a private agency."  Whether it is public             
 or private, the school board is covered.                                      
                                                                               
 Number 461                                                                    
                                                                               
 REPRESENTATIVE ROKEBERG commented that the most recent testimony              
 should be taken into consideration by the subcommittee.  Co-Chair             
 Toohey said she would take that under consideration.                          
                                                                               
 REPRESENTATIVE BRICE asked how many private agency management                 
 options are currently working in the U.S., how long have they been            
 working, and have they been working long enough to have any type of           
 fairly definitive outcome.                                                    
                                                                               
 REPRESENTATIVE JAMES answered that legislative research was working           
 on that information right now.                                                
                                                                               
 CO-CHAIR TOOHEY said if you take away the words "private                      
 management" and think about the type of education, the bill becomes           
 clearer.                                                                      
                                                                               
 REPRESENTATIVE BRICE clarified by saying "Privately managed,                  
 publicly funded."                                                             
                                                                               
 CO-CHAIR TOOHEY held the bill for further consideration.                      
                                                                               
 Number 571                                                                    
                                                                               
 REPRESENTATIVE DAVIS asked about Co-Chair Bunde's request to be on            
 the subcommittee.  Co-Chair Toohey said that she and Co-Chair Bunde           
 would comprise the subcommittee until further notice.                         
 ADJOURNMENT                                                                   
                                                                               
 CO-CHAIR TOOHEY adjourned the meeting at 4:43 p.m.                            
                                                                               

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