Legislature(1999 - 2000)

05/06/1999 02:35 PM Senate HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
      SENATE HEALTH, EDUCATION AND SOCIAL SERVICES COMMITTEE                                                                    
                           May 6, 1999                                                                                          
                            2:35 p.m.                                                                                           
MEMBERS PRESENT                                                                                                                 
Senator Mike Miller, Chairman                                                                                                   
Senator Pete Kelly, Vice-Chairman                                                                                               
Senator Gary Wilken                                                                                                             
Senator Kim Elton                                                                                                               
MEMBERS ABSENT                                                                                                                  
Senator Drue Pearce                                                                                                             
COMMITTEE CALENDAR                                                                                                              
SENATE BILL NO. 117                                                                                                             
"An Act relating to property insurance required for school                                                                      
     -HEARD AND HELD                                                                                                            
SENATE BILL NO. 167                                                                                                             
"An Act relating to scholarships to attend the University of                                                                    
Alaska; establishing the Alaska scholars program; and providing for                                                             
an effective date."                                                                                                             
     -MOVED SB 167 OUT OF COMMITTEE                                                                                             
SENATE BILL NO. 61                                                                                                              
"An Act relating to licensure and professional discipline of                                                                    
members of the teaching profession and providing for related                                                                    
penalties; relating to grounds for dismissal of a teacher; relating                                                             
to the Professional Teaching Practices Commission; relating to                                                                  
limited immunity for procedures under the Educator Ethics Act;                                                                  
making conforming amendments; and providing for an effective date."                                                             
     -HEARD AND HELD                                                                                                            
PREVIOUS SENATE COMMITTEE ACTION                                                                                                
SB 117 -  See HESS minutes dated 4/19/99 and 5/3/99.                                                                            
SB 167 - No previous action.                                                                                                    
SB 61 - No previous action.                                                                                                     
WITNESS REGISTER                                                                                                                
Wendy Redmond                                                                                                                   
University of Alaska                                                                                                            
PO Box 755000                                                                                                                   
Fairbanks, AK  99775                                                                                                            
POSITION STATEMENT:  Presented SB 167                                                                                           
Sanna Green, Executive Director                                                                                                 
Professional Teaching Practices Commission                                                                                      
344 W 3rd Ave., Ste. 127                                                                                                        
Anchorage, AK  99501                                                                                                            
POSITION STATEMENT:  Supports SB 61                                                                                             
Teresa Williams                                                                                                                 
Department of Law                                                                                                               
1034 W 4th Ave., Suite 200                                                                                                      
Anchorage, AK  99501-1994                                                                                                       
POSITION STATEMENT:  Provided a sectional analysis of SB 61                                                                     
Sue Mossgrove                                                                                                                   
Staff to Senator Taylor                                                                                                         
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Presented SB 117                                                                                           
Mike Morgan, Facilities Manager                                                                                                 
Department of Education                                                                                                         
801 W 10th St., Ste. 200                                                                                                        
Juneau, AK  99801-1894                                                                                                          
POSITION STATEMENT:  Answered questions about SB 117                                                                            
ACTION NARRATIVE                                                                                                                
TAPE 99-26, SIDE A                                                                                                              
Number 001                                                                                                                      
CHAIRMAN MILLER called the Senate Health, Education and Social                                                                  
Services (HESS) Committee to order at 2:35 p.m. and announced the                                                               
presence of Senators Pete Kelly, Kim Elton, and himself.  He                                                                    
informed participants the committee would take up legislation in                                                                
the following order:  SB 167, SB 61 and SB 117.                                                                                 
             SB 167-INFO ABOUT SCHOLARSHIP PROGRAMS                                                                             
WENDY REDMOND, University of Alaska Fairbanks (UAF), explained the                                                              
idea for SB 167 came from the State of Georgia which provides free                                                              
tuition to every student who maintains a "B" average.  SB 167                                                                   
provides free tuition at the University of Alaska (UA) for four                                                                 
years to the top ten percent of students in every Alaskan high                                                                  
school.  Governor Knowles introduced similar legislation last year.                                                             
The University thought it was such a good idea it proceeded with                                                                
the program using money from its natural resources fund.  President                                                             
Hamilton reviewed nationwide statistics and discovered that Alaska                                                              
ranks last in the nation in its retention of high school graduates                                                              
who attend college.  According to the national average, between 70                                                              
and 80 percent of the states' high school graduates go to colleges                                                              
in state.  Alaska averages 40 percent.  Alaskan students are not                                                                
attending better schools outside of the state; they are going to                                                                
400 colleges, many of which cannot hold a candle to programs                                                                    
offered at UA campuses.  The State is currently spending millions                                                               
of dollars to educate students here but it is not a good investment                                                             
to spend so much money to make our students smart for export.                                                                   
MS. REDMOND said that although the scholars' program was initiated                                                              
internally, UA needs statutory authority to make the program fully                                                              
functional.  Not all high schools are forthcoming with the                                                                      
information necessary to allow UA to offer their top ten percent of                                                             
students free tuition; one problem being a federal law that                                                                     
requires privacy.  That federal law can be overridden if the state                                                              
has a law mandating that high schools provide the information.  For                                                             
awards to be granted in a timely manner, it is important that this                                                              
legislation be passed this year. UA has been obtaining the names of                                                             
the top ten percent of students in their junior year so that it has                                                             
one year to recruit those students.  Most students make their                                                                   
college decisions early in their senior year.  SB 167 provides that                                                             
the requested information be provided at the end of a student's                                                                 
junior year.                                                                                                                    
MS. REDMOND pointed out that Ann Ringstad is administering the                                                                  
program, and that the program has been designed to fit with the                                                                 
Alaskan experience.  Students can leave the State during their                                                                  
freshman year of college and still get free tuition to UA in their                                                              
sophomore year.  Students can also take one year off between high                                                               
school and their freshman year.  Students who are home schooled,                                                                
not using the state's correspondence program, are not eligible at                                                               
this time.                                                                                                                      
Number 126                                                                                                                      
SENATOR WILKEN commended the bill and asked Ms. Redmond if the                                                                  
University will be able to obtain the names of juniors this year if                                                             
the bill is delayed in the next few weeks due to fiscal problems.                                                               
MS. REDMOND replied UA is moving forward with the program.  She                                                                 
added that names are often obtained from parents who call the                                                                   
University for information.  She noted the Fairbanks school                                                                     
district was the most problematic, however permission slips were                                                                
eventually obtained from parents for the release of students'                                                                   
SENATOR WILKEN recommended that committee members read the                                                                      
scholar's sheet in committee packets.  He noted 733 students are                                                                
taking advantage of the program, and that quality begets quality.                                                               
He stated this bill also signifies President Hamilton's desire to                                                               
interface State and University programs.                                                                                        
Number 164                                                                                                                      
SENATOR ELTON indicated he liked the Governor's proposal because it                                                             
provided new money to the University.  He asked Ms. Redmond to                                                                  
discuss what UA will lose by diverting resources to the scholars'                                                               
MS. REDMOND replied that of course the University would like to                                                                 
have more money for the scholars' program.  The natural resources                                                               
fund is currently supporting natural resource research projects                                                                 
which will have to be put on hold.  She stated the University feels                                                             
comfortable considering young people as a natural resource.                                                                     
SENATOR ELTON asked how the scholars program works in a school                                                                  
district, such as Galena which has two high schools, and whether                                                                
students might be encouraged to attend different schools where they                                                             
have a better shot at being in the top ten percent.                                                                             
MS. REDMOND said the answer to the Galena situation is that 10                                                                  
percent of students from both the charter school and the public                                                                 
school are offered scholarships.  The second issue of "shopping for                                                             
schools" has not been discussed but she does not think that will                                                                
occur in huge numbers because people will actually have to move.                                                                
CHAIRMAN MILLER commended the University and Senator Wilken for                                                                 
their work on the scholars' program.                                                                                            
There being no further discussion, SENATOR WILKEN reported SB 167                                                               
out of committee with individual recommendations and its HES fiscal                                                             
note.  There being no objection, the motion carried.                                                                            
         SB  61-TEACHERS'LICENSES, DISCIPLINE & ETHICS                                                                          
CHAIRMAN MILLER announced that several people were waiting to                                                                   
testify on SB 61 via teleconference.                                                                                            
SANNA GREEN, Executive Director of the Professional Teaching                                                                    
Practices Commission, made the following comments from Anchorage.                                                               
SB 61 is a housekeeping measure needed to update the statute that                                                               
established the commission in 1968.  The bill also codifies some of                                                             
the commission's procedures, places some of the commission's                                                                    
regulations in statute (recommended by the Department of Law), and                                                              
establishes new provisions common to the other licensing boards.                                                                
She asked Teresa Williams of the Department of Law to discuss the                                                               
specifics of SB 61.                                                                                                             
TERESA WILLIAMS, Department of Law, informed participants she                                                                   
provided an annotated version of the bill to the committee.  She                                                                
noted she would be referring to Version B, as that is the bill [HB
85] that was adopted on the House side.  She gave the following                                                                 
sectional analysis.                                                                                                             
Section 1 changes the word "certificate" to "license."                                                                          
Section 2 addresses criminal history background checks. It will                                                                 
allow the normal types of criminal history background checks and it                                                             
will specifically allow DOE to review records to determine if a                                                                 
person was found not guilty of a charge for reason of insanity.                                                                 
She pointed out that a conviction on a person's criminal record                                                                 
would not necessarily be cause for licensure denial, however it is                                                              
reason to investigate further.  Part C will allow background checks                                                             
if a teacher resides out of state or has been unemployed during                                                                 
his/her previous licensure period.                                                                                              
Section 3 lists the grounds for the denial of a license and                                                                     
contains a list of conditions that can be placed on a license.                                                                  
Section 4 codifies the appeals procedure for appeals denial and                                                                 
makes the Administrative Procedures Act (APA) applicable.  The                                                                  
portion of this section that dealt with disciplinary action has                                                                 
been moved to another section specifically dealing with discipline.                                                             
Section 5 is a cleanup provision.  The bases for terminating a                                                                  
teacher are modeled on the bases for professional discipline and                                                                
that language is cross referenced.                                                                                              
Section 6 incorporates all provisions related to discipline and                                                                 
reinstatement procedures.  It also changes the name of the                                                                      
Professional Teaching Practices Commission to the Educator Ethics                                                               
Sections 7, 8, 9 and 10 make technical changes.  Section 11                                                                     
provides the exceptions to reinstatement and summary suspension.                                                                
Section 12 makes a change to the APA.  Under that Act, an agency                                                                
must accept, in its entirety, the decision made by the hearing                                                                  
officer, or the agency can reduce the penalty.  However, if the                                                                 
agency wants to increase the penalty, it has to call for the                                                                    
record, have it transcribed, and then review the record itself.                                                                 
Section 12 gives the agency the authority to adopt the proposed                                                                 
findings of fact in their entirety and increase or change the                                                                   
proposed disciplinary action.                                                                                                   
Number 495                                                                                                                      
SENATOR ELTON thought a refresher course on the findings of fact                                                                
may be appropriate if the agency and hearing officer disagree on                                                                
the outcome.  MS. WILLIAMS replied the agency would have to review                                                              
the findings of fact to decide whether the officer's recommendation                                                             
was appropriate.  Section 12 would change existing law only in that                                                             
the agency would not have to have the entire proceeding transcribed                                                             
and read.                                                                                                                       
SENATOR ELTON asked Ms. Williams if the change is essentially a                                                                 
cost-saving measure.  He questioned how much the commission has                                                                 
spent in the past to have transcripts prepared.  MS. WILLIAMS said                                                              
she did not know the cost, however the hearings can take several                                                                
weeks and in fact, some of the boards and commissions will ask for                                                              
a record because it saves time and money.                                                                                       
Number 516                                                                                                                      
SENATOR ELTON asked Ms. Williams whether a transcript is public                                                                 
record.  MS. WILLIAMS said it is public record, and the hearing                                                                 
itself is open to the public.                                                                                                   
SENATOR ELTON noted one could argue that a transcript may not be of                                                             
benefit to the group, but it might be of benefit to the public.                                                                 
MS. WILLIAMS replied the public can obtain copies of the tapes.                                                                 
MS. WILLIAMS said in actuality, the Board realizes the cost of                                                                  
transcription is passed on to the profession so it usually does not                                                             
request a transcript and instead leaves in place an inappropriate                                                               
outcome that does not protect the public.                                                                                       
MS. WILLIAMS continued with the sectional analysis.                                                                             
Section 13 addresses confidentiality and the investigative files of                                                             
the commission, especially in regard to minors, and it establishes                                                              
when those files would be available to the public and other                                                                     
Number 543                                                                                                                      
SENATOR ELTON asked if initials are used to refer to a minor during                                                             
a hearing rather than a name.  MS. WILLIAMS said initials are used.                                                             
MS. WILLIAMS explained Section 14 is technical.  Section 15 is new                                                              
and addresses the use of fraudulent certificates by teachers.  The                                                              
commission currently has no authority over that activity.  The                                                                  
penalty section sets out civil and criminal penalties for a person                                                              
who obtains a teacher position for which the person did not have                                                                
the required certification.  Section 16 contains definitions.                                                                   
There being no questions of Ms. Williams, Chairman Miller called                                                                
John Cyr to testify.                                                                                                            
CHAIRMAN MILLER informed committee members that Ms. Williams'                                                                   
sectional analysis pertained to HB 85 which is now in the House                                                                 
Rules Committee.  He noted HB 85 will probably be used as the                                                                   
vehicle for passage after the HESS committee finishes its review of                                                             
the measure.                                                                                                                    
JOHN CYR, President of NEA Alaska, expressed the following concerns                                                             
about HB 85.   Section 14.20.375 reads:                                                                                         
     (a) If the department files an accusation while a person is                                                                
     licensed under this chapter, the commissioner may revoke or                                                                
     suspend the person's license if the commissioner finds grounds                                                             
     for discipline under AS 14.20.372.                                                                                         
NEA believes that language should be changed so that the                                                                        
commission, rather than the commissioner, must find grounds for                                                                 
license suspension or revocation.  NEA would like to see a higher                                                               
standard used for license revocation.                                                                                           
Second, subsection (f) reads:                                                                                                   
     notwithstanding other provisions of this section, the                                                                      
     commission may not impose discipline on a member of the                                                                    
     teaching profession's license to act as administrator unless                                                               
     the commissioner concurs in the commission's decision.                                                                     
MR. CYR said that provision smacks of a double standard.  Again,                                                                
the commission acts as a body, is made up of people from the                                                                    
education profession and should be making the decisions on                                                                      
TAPE 99-26, SIDE B                                                                                                              
NEA's final area of concern is Section 12 on page 13.  To take                                                                  
someone's license to teach is a far different standard than to lose                                                             
one's job.  A teacher can lose a job because of philosophical                                                                   
differences with a school district yet be successful in a different                                                             
school district.  Section 12 should be changed so that the                                                                      
commission is required to consider all of the facts.  NEA would                                                                 
argue that a de novo hearing would be appropriate before a person                                                               
loses his/her license.                                                                                                          
MR. CYR informed committee members he would like to comment on a                                                                
proposed amendment.  CHAIRMAN MILLER invited Mr. Cyr to speak to                                                                
the amendment, however said that the committee would not be dealing                                                             
with amendments until HB 85 reaches the committee.                                                                              
Number 564                                                                                                                      
MR. CYR said he was referring to a proposed amendment by Senator                                                                
Donley that would insert, in the bill title, "relating to teachers                                                              
who have subject matter expertise."  NEA has spent the last three                                                               
years working in concert with teachers across the state on the                                                                  
subject of licensure.  One suggested proposal establishes a tiered                                                              
system of licensure which would make fundamental changes to the                                                                 
education system. All research indicates that the most important                                                                
factor in quality education is a well qualified teacher.  Senator                                                               
Donley's amendment moves away from that and says that a person with                                                             
a degree in math can teach mathematics, etc.  NEA does not believe                                                              
that is necessarily true, nor is it in the best interest of the                                                                 
children of the state.                                                                                                          
CHAIRMAN MILLER indicated that Senator Donley may offer that                                                                    
amendment in the Senate Judiciary Committee, of which he is a                                                                   
SENATOR WILKEN asked Mr. Cyr to elaborate on NEA's concerns about                                                               
Section 12.                                                                                                                     
MR. CYR read Section 12:                                                                                                        
     (b)  In addition to the options available under AS 44.62.500,                                                              
     the Commission may adopt a hearing officer's proposed findings                                                             
     of fact in their entirety and increase or change the proposed                                                              
     disciplinary action authorized under AS 14.20.375 against the                                                              
MR. CYR said, in most cases, the hearing officer is the school                                                                  
board or an arbitrator.  During a hearing, the officer listens to                                                               
the facts and makes a disposition.  HB 85 allows the commission to                                                              
review the disposition and then decide whether the hearing officer                                                              
went far enough regarding the punishment. He maintained the                                                                     
standard for losing a job and the standard for losing a license                                                                 
should be markedly different.  If the commission decides the                                                                    
hearing officer did not go far enough, the case deserves a total                                                                
SENATOR WILKEN asked if Mr. Cyr is saying the commission takes or                                                               
leaves the hearing officer's proposal, and when it does not accept                                                              
the proposal, it should remand the case to another hearing officer.                                                             
MR. CYR said "exactly."  A hearing officer does not have the                                                                    
ability to pull a license; the license is owned by the state and                                                                
only the commission can revoke it. If the commission is considering                                                             
license revocation, the teacher deserves to have a hearing in front                                                             
of the commission.                                                                                                              
CHAIRMAN MILLER asked if NEA believes the first phase should be a                                                               
take it or leave it procedure, but in cases in which the decision                                                               
is not accepted, the commission should remand it back to another                                                                
hearing officer or hear the case itself.                                                                                        
MR. CYR said he thinks the commission should hear the case.                                                                     
SENATOR WILKEN asked Mr. Cyr to prepare an amendment addressing                                                                 
NEA's concerns.                                                                                                                 
SENATOR WILKEN questioned whether the term "mentally incapable" on                                                              
page 3, line 29, of HB 85, and pointed out the Fairbanks school                                                                 
district has had trouble proving a person as such.  He asked Ms.                                                                
Williams whether that term is defined anywhere.                                                                                 
Number 487                                                                                                                      
MS. WILLIAMS replied the definition would come from the Americans                                                               
with Disabilities Act.  Such a person would not be able to perform                                                              
an essential function necessary to the job of teaching.  The                                                                    
conditional license would ease that process by designing conditions                                                             
that will enhance a person's ability to be in the profession if                                                                 
they can safely carry out the essential duties of their profession.                                                             
SENATOR WILKEN felt the "mentally incapable" issue is a double-                                                                 
edged sword.  He stated he does not want an educator to hide behind                                                             
it, nor does he want a school board to be prevented from removing                                                               
an educator because of it.  MS. WILLIAMS clarified the decision to                                                              
grant the initial license would rest with the Department of                                                                     
Education rather than the school boards.                                                                                        
MS. WILLIAMS addressed NEA's concern about the proceedings that                                                                 
take place before a hearing officer.  The hearing officer acts on                                                               
behalf of the commission; he/she is appointed by the Governor to                                                                
conduct the hearing before the commission and make the proposed                                                                 
decision to the commission.  This procedure is independent of any                                                               
action by a school board. The section on procedures of school                                                                   
boards or districts begins on page 8, line 18.  That section sets                                                               
out the deference given a school district decision and how the                                                                  
commission needs to state a good cause for rejecting a finding of                                                               
fact on a final decision before the school district.  In that                                                                   
situation, the commission would have the record before the school                                                               
Number 438                                                                                                                      
SANNA GREEN clarified that a hearing officer for a school board is                                                              
completely separate from the hearing officer used by the commission                                                             
who is appointed by the Governor under the APA.                                                                                 
SENATOR WILKEN repeated that he is not comfortable with the way the                                                             
term "mentally incapable" is addressed in the bill.  He asked Ms.                                                               
Williams if the committee should try to further define the term.                                                                
MS. WILLIAMS replied she does not think the committee needs to go                                                               
further because if a person is mentally incapable then licensure is                                                             
denied.  If they can perform some functions, the license could be                                                               
SENATOR WILKEN asked how the term can be defined in legislation so                                                              
that it is not interpreted for different purposes at different                                                                  
MS. WILLIAMS explained the bottom line for teacher licensure is                                                                 
whether one is able to carry out the duties of being a teacher.                                                                 
The only purpose of this section is to allow conditional licenses                                                               
if a person can perform some, but not all, of the functions.                                                                    
SENATOR WILKEN questioned who will define the mental capacity of                                                                
that teacher.  MS. WILLIAMS replied the Department of Education.                                                                
SENATOR WILKEN asked under what guidelines.  MS. WILLIAMS said from                                                             
information from previous employers, for example.  Senator Wilken                                                               
and Ms. Williams discussed the problems associated with determining                                                             
that a person is mentally incompetent, and concluded there is no                                                                
easy statutory way to solve the problem because there is no test                                                                
that can be administered; each situation is fact-specific.                                                                      
SENATOR WILKEN commended Ms. Williams for the format of the                                                                     
comparison of bill versions she provided to members.                                                                            
Number 365                                                                                                                      
SENATOR ELTON agreed with Mr. Cyr that the bill sets up a double                                                                
standard by making it easier to take action to revoke a teacher's                                                               
license than an administrator's license.                                                                                        
MS. WILLIAMS explained there has always been parallel authority to                                                              
act between DOE and the commission; SB 61 does not change that.  In                                                             
reality DOE has never used its parallel authority.  It has always                                                               
charged the commission to initiate and conduct proceedings.                                                                     
SENATOR ELTON maintained that the parallel exists for                                                                           
administrators but not for teachers.                                                                                            
MS. WILLIAMS explained the commission is comprised of 9 members, 5                                                              
of which must be teachers, one an administrator, one a principal,                                                               
one from DOE, and one from the University of Alaska.                                                                            
Administrators noted they were vastly outnumbered on the commission                                                             
and requested that the make-up of the commission be changed.  The                                                               
compromise reached in 1968 was to add a requirement that the                                                                    
commissioner of DOE had to concur with any discipline against an                                                                
administrator.  A second concern was that a commission made up                                                                  
primarily of teachers would be less likely to initiate action                                                                   
against other teachers.  For that reason, administrators wanted to                                                              
create a stop gap by giving DOE the power to initiate actions.  DOE                                                             
has never actually initiated any actions and the commission has                                                                 
been zealous in its responsibility to enforce teaching ethics.                                                                  
Alaska has the highest rate of revocation in the country.                                                                       
SENATOR ELTON asked if the commissioner of DOE is required to have                                                              
an administrator's certificate.  MS. WILLIAMS was unsure but did                                                                
not believe so.  She added that the Alaska Association of School                                                                
Administrators has made it clear that it will revisit the issue of                                                              
the make-up of the commission if this provision is removed.  The                                                                
Administration would prefer that this bill pass because it is a                                                                 
necessary clean up and it gives the commission the authority to do                                                              
what it needs to do.  It prefers that any discussion regarding the                                                              
make-up of the commission be addressed separately so as not to slow                                                             
down the bill.                                                                                                                  
Number 300                                                                                                                      
MR. CYR expressed concern that Ms. Williams insinuated that Alaska                                                              
has a high rate of teachers whose licenses are pulled for sexual                                                                
abuse activities and he finds that offensive.  Of the 10,000                                                                    
certificated teachers in Alaska, three hearings were held last                                                                  
year; two of those cases were of a sexual nature.  The other reason                                                             
teacher's licenses are revoked is for breaching a contract.  He                                                                 
noted teachers in rural Alaska do leave at times because they are                                                               
harassed by the local people.  He still believes of the 10,000                                                                  
teachers in Alaska, the vast majority are doing a very good job and                                                             
to characterize the situation any other way is unacceptable.                                                                    
SENATOR KELLY agreed with Mr. Cyr but noted it is interesting that                                                              
the lobbyist for the NEA finds it distasteful when sweeping                                                                     
characterizations are made about people.  He asked Mr. Cyr to be                                                                
aware of that when NEA puts out its next pamphlet.                                                                              
Number 272                                                                                                                      
CRAIG BAKER, a teacher from Kodiak and president of the local                                                                   
union, stated he fully supports the fingerprint and criminal                                                                    
background check requirement, however he pointed out that                                                                       
requirement has created problems in Kodiak.  Last year a teacher                                                                
from Idaho was hired in Kodiak and had her fingerprints taken at a                                                              
police station.  The FBI rejected the fingerprints because they                                                                 
were unclear, but by that time school was about to begin and she                                                                
did not yet have her certificate.  He noted the time issue could                                                                
prevent people from not being hired at the last minute.  He                                                                     
indicated that a provision on page 2 of SB 61 allows temporary                                                                  
certificates to be issued however he does not believe that is the                                                               
SENATOR WILKEN asked Mr. Baker if he is against issuing a temporary                                                             
teaching certificate.  MR. BAKER said that is correct, however he                                                               
repeated the background checks need to be done in a more timely                                                                 
BETH LAPE, Special Assistant at the Department of Education,                                                                    
informed committee members she would like to testify on Senator                                                                 
Donley's amendment when and if it comes before the committee.                                                                   
CHAIRMAN MILLER stated that with no further testimony, the                                                                      
committee will hold SB 61 and wait until HB 85 arrives in the                                                                   
TAPE 99-26, SIDE B                                                                                                              
Number 218                                                                                                                      
             SB 117-INSURANCE FOR SCHOOL DISTRICTS                                                                              
CHAIRMAN MILLER brought up SB 117 and a proposed committee                                                                      
substitute (CS) for consideration, and invited Ms. Mossgrove to                                                                 
MS. SUE MOSSGROVE, staff to Senator Taylor and to the                                                                           
Administrative Regulation Review Committee, explained the bill is                                                               
the result of a problem identified in regulation.  The CS clarifies                                                             
that if a school district is not in a flood plain or a flood prone                                                              
area, it does not have to purchase flood insurance.  In addition,                                                               
language has been added to exempt schools from carrying earthquake                                                              
insurance unless they are in an active seismic zone. The                                                                        
requirement to have earthquake insurance is left to the discretion                                                              
of the DOE commissioner.  Clear seismic zones ranging from 0-4 have                                                             
been mapped out in Alaska.  The CS also clarifies that this                                                                     
amendment to Title 14 applies only to REAAs, not to schools that                                                                
are eligible for self-insurance.  The CS adds definitions from CFR                                                              
44 of flood plain and flood prone areas; the same definitions in                                                                
the regulation as well.                                                                                                         
SENATOR ELTON asked about earthquake zones and whether a zero                                                                   
classification is inactive and 1 is active.  MS. MOSSGROVE replied                                                              
a map exists with the zones laid out, zero being the lowest                                                                     
potential for earthquake activity. The "ring of fire" is zone 4,                                                                
the highest.  The zones 0-4 guidelines are set by the building                                                                  
SENATOR ELTON asked if an REAA school in a 1-4 zone will be                                                                     
required to carry earthquake insurance while REAA schools in zone                                                               
0 will not.  MS. MOSSGROVE replied that is correct but the final                                                                
decision is left to the commissioner's discretion.  Schools in                                                                  
zones zero and one do not need to carry insurance because no                                                                    
earthquakes have ever been recorded in those zones.                                                                             
SENATOR ELTON expressed hesitancy about whether to give different                                                               
commissioners the latitude to re-define seismic zones.  Zone zero                                                               
is easy, but zone one and two are not as clear.  He said he is                                                                  
uncomfortable that the bill does not contain more specifics to                                                                  
guide the commissioner's decisions.                                                                                             
SENATOR WILKEN agreed with Senator Elton's concern and noted that                                                               
Anchorage has 4 or 5 seismic zones within it and that a school                                                                  
could straddle seismic zones.  He suggested the committee re-think                                                              
who defines seismic zones, and whether the designation applies to                                                               
a school area or a district.  He indicated the University of Alaska                                                             
has plenty of maps available.                                                                                                   
Number 145                                                                                                                      
MS. MOSSGROVE said she got her information from the University's                                                                
website, DNR and the U.S. Geological Survey.  The map she used lays                                                             
out the seismic zones quite clearly. She was unaware that Anchorage                                                             
has different seismic zones within it because it is shown only as                                                               
Zone 4 on her map.                                                                                                              
SENATOR WILKEN said the Geophysical Institute is currently working                                                              
on defining the seismic zones in Anchorage for major structures so                                                              
they don't all pay at the Zone 4 level.                                                                                         
SENATOR ELTON asked Ms. Mossgrove to describe the net effect on the                                                             
MS. MOSSGROVE said Senator Taylor's intention is to clarify in                                                                  
statute who has to have insurance, and to allow DOE to apply some                                                               
common sense, especially in times of revenue shortages.  It is her                                                              
understanding that the state currently requires earthquake and                                                                  
flood insurance for all REAAs.  The insurance industry has combined                                                             
the two coverages and created a blanket policy to provide a cheaper                                                             
Number 101                                                                                                                      
SENATOR ELTON asked if that means the pooled insurance will be                                                                  
higher for non-REAAs if some REAAs no longer have to purchase the                                                               
earthquake coverage.  MS. MOSSGROVE deferred to DOE to answer that                                                              
MR. MICHAEL MORGAN, Facilities Manager for DOE, explained that                                                                  
current regulation requires flood insurance for all structures in                                                               
a flood plain or flood prone area.  It also requires earthquake                                                                 
insurance only for REAAs that are housed in state-owned buildings.                                                              
The change will lift the requirement that all REAAs in state-owned                                                              
buildings carry blanket earthquake and flood insurance.  MR. MORGAN                                                             
said the practical effect should net zero, because almost all REAAs                                                             
are covered through the Alaska School Insurance Company's (ASIC)                                                                
program as part of its broad coverage policy offering earthquake                                                                
and flood coverage.  When DOE did the regulation two years ago, it                                                              
talked to ASIC and AML.  ASIC said because of the marketplace, no                                                               
cost savings would result if one or two districts wanted out of                                                                 
earthquake and flood coverage.  It should not really increase the                                                               
cost of the premium to districts.                                                                                               
Number 056                                                                                                                      
SENATOR ELTON asked whether, because of the insurance market the                                                                
pool is now working in, no net savings to any district wanting to                                                               
cancel earthquake coverage may occur.  He questioned what will                                                                  
happen if ASIC begins using another insurance market, and whether,                                                              
if this bill passes, the Juneau school district's insurance could                                                               
increase because another district dropped out of the pool.                                                                      
MR. MORGAN replied that if any district pulls out of the pool the                                                               
insurance rates of the remaining members would be affected.  He                                                                 
could not say how that would balance out over the long term.  Mr.                                                               
Morgan said DOE is uncomfortable being put in the position of                                                                   
determining seismic zones, and he agrees with the comments made by                                                              
both Senators Elton and Wilken.                                                                                                 
SENATOR ELTON asked if the risk that other districts' insurance                                                                 
rates will increase if this bill is enacted is insignificant.  MR.                                                              
MORGAN said he believes "this will have really no effect on other                                                               
SENATOR WILKEN asked if any REAAs are not in state-owned                                                                        
facilities.  MR. MORGAN said some REAAs have asked for title to the                                                             
land and buildings under AS 14.08.151 which requires DOE to convey                                                              
the title if requested.  Some REAAs have already taken title to                                                                 
land and buildings.                                                                                                             
SENATOR WILKEN asked if the REAAs assume the maintenance and                                                                    
operating costs when they take title.  MR. MORGAN said REAAs do                                                                 
that whether or not they have title.                                                                                            
SENATOR ELTON noted the issue raises an especially interesting                                                                  
question because if a school building originally served 13 students                                                             
and now serves eight, the school building is no longer classified                                                               
as a school under the formula.                                                                                                  
MR. MORGAN agreed that a student population must consist of more                                                                
than 10 students in order for a school to exist.  Regarding the                                                                 
question of what happens to the ownership issue when titles are                                                                 
transferred, MR. MORGAN stated titles are transferred with their                                                                
underlying restrictions on deeds.  Deeds acquired by the state from                                                             
the BIA usually contain a restriction requiring the land to be used                                                             
for school purposes.   The REAA could probably rent or lease the                                                                
school building and keep the land.                                                                                              
CARL ROSE, Executive Director of the Association of Alaska School                                                               
Boards (AASB) and President of the Alaska Public Entity                                                                         
Insurance Company (APEIC), formerly the Alaska School Insurance                                                                 
Company (ASIC) until two years ago.  ASIC was domiciled in Vermont                                                              
because it was created as a pool before the Alaska insurance                                                                    
pooling laws were enacted; two years ago ASIC decided to domicile                                                               
in Alaska.                                                                                                                      
MR. ROSE discussed the background of this issue.  In 1985, most of                                                              
the REAAs were unable to obtain insurance.  The AASB created, under                                                             
its charter, a pool of property values within the REAAs and small                                                               
school districts, to take to market.  At that time, AASB was                                                                    
looking at premium prices in the area of $1.25 per $100 of                                                                      
coverage.  By the year 1991, AASB was able to drive that price down                                                             
to 21 cents per $100.  As an insurance company, APEIC has suffered                                                              
over $36 million in losses as a result of total loss fire damage                                                                
and a few floods.  After paying $36 million in damages, APEIC's                                                                 
premium rates only increased to 41 cents per $100, and they                                                                     
continue to decrease.   At present, insurance companies are making                                                              
money on investments and the focus is not on underwriting but on                                                                
getting the premiums to invest.   When the investment climate                                                                   
begins to tail off,  insurance companies will be forced to focus on                                                             
underwriting and the industry is cyclical.  Regarding how APEIC                                                                 
came up with the idea of providing earthquake and flood insurance,                                                              
REAAs were required, under their use permits, to provide that                                                                   
coverage it they did not take possession of the buildings.  That                                                                
scheme acted as the footprint for the APEIC so that the REAAs could                                                             
get coverage.  As a result, APEIC was able to get the coverage at                                                               
a fairly low rate because it spread the cost to those outside of an                                                             
earthquake zone, similar to the Universal Service Fund in relation                                                              
to telephone rates.  SB 117 will not have a net impact on the REAAs                                                             
that exist right now.  The insurance industry looks at Alaska as an                                                             
active seismic area, although some areas of Alaska are not active.                                                              
APEIC differentiates between the two.  With respect to REAAs, MR.                                                               
ROSE did not think SB 117 would have an effect.  He said he                                                                     
understood at one point in time, a group of people who did not need                                                             
earthquake coverage wanted to be exempted from the requirement.                                                                 
Because of the state of the market, the insurance industry has                                                                  
adopted a quality-added atmosphere:  the industry is trying to                                                                  
offer broad coverage for the lowest possible premium to attract                                                                 
consumers.  The net result is that if the Legislature segments the                                                              
market and no longer requires certain schools to have coverage, the                                                             
premium rates on those who do need the coverage would be driven up.                                                             
MR. ROSE repeated that regarding REAAs, he does not believe SB 117                                                              
will change anything in existence right now but he questioned                                                                   
whether newly acquired buildings would be required to have the                                                                  
insurance.  Two insurance pools are available in the state: AML and                                                             
APEIC.  Both are trying to provide broad areas of coverage.   He                                                                
believes SB 117 does clarify what people will be required to do and                                                             
the industry is positioned to provide the coverage.                                                                             
SENATOR ELTON asked if Yakutat no longer purchases flood insurance                                                              
because it is not in a flood plain, whether its insurance rates                                                                 
will remain the same so that no other pool member's rates will be                                                               
MR. ROSE replied that is an accurate assessment.  Yakutat is not an                                                             
REAA so it is not required to provide this coverage right now.                                                                  
APEIC's broad policies include earthquake and flood coverage.  He                                                               
noted Yakutat did not want that coverage, but it was part of the                                                                
broad package.  He repeated that the quality-added approach taken                                                               
by the insurance industry is to provide as much coverage as                                                                     
possible for the premium dollar.  He noted the savings would be                                                                 
minuscule if a specific coverage was broken out because purchasing                                                              
large quantities of insurance as a pool provides more buying power.                                                             
MR. MORGAN said his reading of the committee substitute is that the                                                             
current requirement in regulation that cities, boroughs and                                                                     
municipalities in a flood plain or flood prone area carry coverage                                                              
would not change.                                                                                                               
CHAIRMAN MILLER asked if Mr. Morgan's reading of the original bill                                                              
was that Yakutat would not have to purchase coverage.  MR. MORGAN                                                               
said that is correct; if a school is not located in a flood plain                                                               
or flood prone area, it will not be required to be covered for                                                                  
SENATOR WILKEN moved to adopt CSSB 117(HES), Version H.  There                                                                  
being no objection, CSSB 117(HES) was adopted in lieu of the                                                                    
original bill.                                                                                                                  
SENATOR ELTON stated he believes a definition of "seismic zone"                                                                 
should be included in the bill.  SENATOR WILKEN agreed.                                                                         
MS. MOSSGROVE noted the drafter specifically included the word                                                                  
"active" when referring to a seismic zone because Alaska as a whole                                                             
is considered to be a seismic zone.                                                                                             
CHAIRMAN MILLER thought the committee would be more comfortable                                                                 
clarifying the different zones and their ratings to determine which                                                             
zones should and should not be covered.                                                                                         
SENATOR WILKEN suggested asking the drafter to define "active                                                                   
seismic area" within the bill so that a reference exists.                                                                       
CHAIRMAN MILLER suggested Senator Wilken, Senator Taylor, Mr.                                                                   
Morgan and Mr. Rose get together and come up with a solution.                                                                   
CHAIRMAN MILLER stated there being no other business to come before                                                             
the committee, the Senate HESS Committee was adjourned.                                                                         

Document Name Date/Time Subjects