HB 139-CORRESPONDENCE STUDY PROGRAM FUNDING  9:13:28 AM CO-CHAIR RUFFRIDGE announced that the final order of business would be HOUSE BILL NO. 139, "An Act relating to funding for correspondence study programs." [During the meeting on 4/19/23, Amendment 2 was moved but did not pass.] 9:13:50 AM REPRESENTATIVE HIMSCHOOT moved to adopt Amendment 3 to HB 139, labeled, 33-LS0582\B.5, Marx, 4/12/23, which reads as follows: Page 1, line 8, following "multiplying": Insert "(1)" Page 1, line 9: Delete "the special needs factor in  AS 14.17.420(a)(1) [90 PERCENT]" Insert "90 percent; and (2) the number obtained under (1) of this  subsection by the special needs factor in  AS 14.17.420(a)(1)" CO-CHAIR RUFFRIDGE objected. REPRESENTATIVE HIMSCHOOT referred to a letter the committee received in January from seven superintendents who requested more equity for the funding of special needs students in correspondence schools. She stated that the provisions in the amendment would affect about 10 percent of all special needs students served, whether it is an extra learning opportunity (ELO), a gifted student, or a student requiring an individualized education program (IEP). She stated that the request is for 90 percent plus the special needs funding factor of 1.2 percent. 9:15:16 AM CO-CHAIR RUFFRIDGE maintained his objection. He expressed awareness of the referenced letter; however, he suggested that the equity requested is already contained in the current iteration of the proposed legislation. 9:16:11 AM A roll call vote was taken. Representatives McCormick, McKay, Himschoot, and Story voted in favor of the motion to adopt Amendment 3 to HB 139. Representatives Prax and Ruffridge voted against it. Therefore, Amendment 3 was adopted by a vote of 4- 2. 9:17:20 AM REPRESENTATIVE HIMSCHOOT [moved to adopt Conceptual Amendment 7 to HB 139, as amended], labeled, 33-LS0582\B.11, Marx, 4/17/23, which reads as follows which read as follows: Page 1, lines 8 - 9: Delete "multiplying the ADM of the correspondence program by the special needs factor in  AS 14.17.420(a)(1) [90 PERCENT]" Insert "determining [MULTIPLYING] the ADM of the correspondence program reported under AS 14.17.500(a)  and 14.17.600(a) and, if the correspondence program  meets the requirements of (b) of this section,  multiplying the ADM of the correspondence program by  the special needs factor in AS 14.17.420(a)(1) [BY 90 PERCENT]" Page 1, following line 9: Insert a new bill section to read: "* Sec. 2. AS 14.17.430 is amended by adding a new subsection to read: (b) To qualify for the special needs factor multiplier under (a) of this section, a correspondence program must (1) offer gifted and talented education and English learner services; and (2) file with the department a plan that indicates the gifted and talented education and English learner services that gifted and talented education and English learner students will receive." REPRESENTATIVE HIMSCHOOT explained that correspondence schools serve IEP students, English learners, and gifted students, and they need additional support to meet their standards. She noted that IEP students have federal requirements; however, these other students with Tier II support should have accountability. She continued that Conceptual Amendment 7 is an accountability amendment, as it would provide assurance that the multiplier is used for its intended purpose in correspondence schools. The amendment would require a plan of service, similar to brick-and- mortar schools, for English learners and gifted students. 9:19:51 AM REPRESENTATIVE PRAX expressed the understanding that, per [the Foundation Funding Formula], districts would receive a 20 percent funding [factor] for each special needs student, and this would be multiplied by the number of special needs students in the district. He questioned the accountability for any extra funds from this. 9:23:39 AM CHRIS REITAN, Superintendent, Craig School District, responded that for students attending brick-and-mortar schools, there is a 1.2 special needs funding factor applied to every student. He stated that brick-and-mortar schools and correspondence programs are required to have IEPs for gifted students and service for English language learners, regardless of funding. In response to a follow-up question, he stated that any leftover funds go into the general fund for the district, and its board will allocate the funds. He advised that the special needs funding factor is not a one-to-one correspondence with each student. CO-CHAIR RUFFRIDGE added that the 1.2 funding factor does not go to a specific student. REPRESENTATIVE PRAX expressed the understanding that if a school has 20 students with special needs, the school will receive the same amount of funding. MR. REITAN expressed the understanding that this would be correct. REPRESENTATIVE PRAX made the point that currently there is no accountability in districts for whether the funds are applied to the intended purpose. He questioned why there should be any additional requirements on correspondence schools. He argued that currently the responsibility is on the parents of students in correspondence schools, and this is a "better system." 9:27:01 AM REPRESENTATIVE STORY expressed the understanding that this is a block grant; therefore, IEPs would have to be met, as this is a federal requirement. She suggested that these block grants are "eaten up" by special education students and nothing is left for CTE, as it is not mandated. She questioned her understanding of this. MR. REITAN, in response, stated that all school districts have access to Title 6B, which includes the federal grant for special education, as well as the Carl Perkins Grant, which is CTE funding. He stated these block grants do not come close to covering costs for schools to run a CTE program or to meet the needs of special needs students. He continued that all districts must use general funds to offset these costs, and this comes through the base student allocation. 9:30:10 AM CO-CHAIR RUFFRIDGE clarified that the gifted and English learner qualifiers are already met by correspondence schools. MR. REITAN replied in the affirmative. 9:31:05 AM REPRESENTATIVE HIMSCHOOT made the point that the delivery model for correspondence schools is different. If additional funding is to be given, she expressed the desire for more accountability. She stated that this would add a plan specifically made for correspondence schools, as the district's plan would not sufficiently explain how the money is being used and the students are being supported. 9:31:51 AM REPRESENTATIVE PRAX expressed agreement that this is a different model; however, there are already recording requirements for special needs funds. He expressed the opinion that whoever is delivering the services should be trusted, as there is no method of accountability for any entity. He suggested that this would add a "paperwork burden that nobody will look at." 9:33:12 AM REPRESENTATIVE STORY clarified her understanding that now the block grants and the factor funding is supposed to go to special needs, CTE, and gifted students, and the amendment would make this the same for correspondence programs. MR. REITAN responded that his understanding of "block grants" means title grants and federal dollars. He stated that specific plans need to be made to receive these funds, and the plans must be approved at the department level. Regarding the 1.2 factor for gifted, English learners, and special needs students, he said that all correspondence schools are required to develop a student learning plan in collaboration with the parent and the teacher, and if appropriate, a special education teacher. This plan drives the program for the student and all the curriculum purchases. For correspondence programs, many students have a robust plan, so some of this is already built in. REPRESENTATIVE STORY confirmed she was using the incorrect term, "block grant," and she should have used the term "special needs factor" instead. She questioned whether the amendment is needed. MR. REITAN replied that he concurs with Representative Prax's interpretation, and no additional accountability measures are needed. 9:37:44 AM CO-CHAIR RUFFRIDGE maintained his objection. 9:37:52 AM The committee took an at-ease from 9:37 a.m. to 9:38 a.m. 9:38:15 AM A roll call vote was taken. Representatives McCormick, Himschoot, and Story voted in favor of Conceptual Amendment 7 to HB 139, as amended. Representatives Prax, McKay, and Ruffridge voted against it. Therefore, Conceptual Amendment 7 failed by a vote of 3-3. 9:38:54 AM The committee took an at-ease from 9:38 a.m. to 9:44 a.m. 9:44:05 AM REPRESENTATIVE MCKAY moved to adopt Amendment 8 to HB 139, as amended, labeled, 33-LS0582\B.12, Marx, 4/14/23, which reads as follows: Page 1, line 1: Delete "funding for" Page 1, following line 2: Insert a new bill section to read:  "* Section 1. AS 14.03.310(a) is amended to read: (a) Except as provided in (e) of this section, the department or a district that provides a correspondence study program shall [MAY] provide an annual student allotment to a parent or guardian of a student enrolled in the correspondence study program for the purpose of meeting instructional expenses for the student enrolled in the program as provided in this section." Page 1, line 3: Delete "Section 1" Insert "Sec. 2" Page 1, following line 9: Insert a new bill section to read:  "* Sec. 3. AS 14.17 is amended by adding a new section to article 2 to read: Sec. 14.17.530. Minimum expenditure for  instruction. (a) A district that provides a district correspondence program, including a district that offers a statewide correspondence study program, shall budget for and spend on the correspondence program component of the district budget in each fiscal year an amount equal to at least 95 percent of the funding allocated to the district for the correspondence program under AS 14.17.430. The district shall spend at least 60 percent of the amount calculated under this subsection on annual student allotments required under AS 14.03.310(a). (b) The commissioner shall reject a district budget that does not comply with (a) of this section and, unless a waiver has been granted by the board under (d) of this section, shall withhold payments of state aid from that district, beginning with the payment for the second full month after rejection and continuing until the school board of the district revises the district budget to comply with (a) of this section. (c) The commissioner shall review the annual audit of each district for compliance with the expenditure requirements of (a) of this section, and calculate the amount of the deficiency, if any. If the commissioner determines that a district does not meet those requirements, the commissioner shall advise the district of the determination and deduct that amount from state aid paid to the district for the current fiscal year. A deduction in state aid required under this subsection begins with the payment for the second full month after the determination, unless a waiver has been granted by the board under (d) of this section. (d) A district that the commissioner determines to be out of compliance with the requirements of this section may, within 20 days after the commissioner's determination, request from the board a waiver from the imposition by the commissioner of a deduction in state aid payments under (b) or (c) of this section. The request must be in writing and must provide an explanation of the reasons for which the district is unable to comply with the requirements of this section. The district shall also submit the request to the Legislative Budget and Audit Committee. The Legislative Budget and Audit Committee shall review the district's request and forward its recommendations on the request to the board. The board may grant the waiver if the board determines that the district's failure to meet the expenditure requirements of this section is caused by circumstances beyond the control of the district. (e) The commissioner shall submit an annual report on actions taken by the commissioner or the board under this section to the Legislative Budget and Audit Committee by April 15 of each year. (f) In this section, "correspondence program component" means expenditures for a district correspondence program." CO-CHAIR RUFFRIDGE objected. REPRESENTATIVE MCKAY stated that the amendment would put spending requirements on correspondence school funds. He deferred to his chief of staff for discussion. 9:44:48 AM TREVOR JEPSEN, Staff, Representative Tom McKay, Alaska State Legislature, on behalf of Representative McKay, explained Amendment 8. He stated that the first part of the amendment would require 95 percent of correspondence funding to be spent on the program. He continued that 60 percent of the remainder of these funds must be used for student allotments. He stated that the remainder of the amendment outlines the system for the commissioner to affirm the policies. He stated that currently in statute there is no spending requirement that the funds be spent on correspondence students or allotments, so all the funds are allocated to districts based on the number of correspondence students. He suggested that there has been no evidence of the misuse of funds; however, putting this into statute will make sure this trend continues. He expressed the opinion that student allotments should be increased, and this is the underlying spirit of the bill. MR. JEPSEN addressed the impact of the amendment and noted that, with the passing of Amendment 3, the numbers in Conceptual Amendment 8 are reduced by 10 percent. He added that under the previous iteration of the bill, correspondence students' funding would be increased to $7,142, and with this amendment, the districts would have to spend 95 percent of this on the correspondence program. He added that with the minimum student allotments, this would be $4,071. He stated that the rest of the funding would be used for overhead. He used the IDEA correspondence program as an example to show how the amendment would affect the current situation. He concluded that this amendment would ensure the majority of the funds would go to the students. 9:49:46 AM REPRESENTATIVE PRAX commented that the IDEA program is being used as an example, and this program has a set of challenges; however, other programs would have different challenges, such as different administrative expenses. He argued that the amendment would not account for this. He expressed the understanding that the proposed amendment would prevent correspondence programs from becoming bureaucratic; however, he suggested that this would only work for urban programs. He expressed the fear that there would be unintended consequences, and some programs may be shut down. 9:51:47 AM MR. JEPSEN responded that if a program cannot afford this, there is a waiver system in place. He stated that he has reached out to nine correspondence programs and discovered that this allotment amount going to the student is common. In response to a follow-up question, he stated that the waiver system is in place, and this would help any new correspondence programs get started. He suggested that there would be a process for programs to expand or start anew. 9:54:00 AM REPRESENTATIVE HIMSCHOOT requested that Mr. Reitan speak to the amendment. MR. REITAN expressed concern about elected school board members maintaining local control of their budget. He suggested that this would limit their ability. He expressed another concern that the smaller correspondence programs would not be able to survive the market, even with the waiver. He expressed the opinion that with the proposed amendment, new programs would not be able to start. REPRESENTATIVE HIMSCHOOT questioned Mr. Jepsen whether any district is currently giving more than 60 percent to the student allotment. MR. JEPSEN reiterated that of the schools he spoke with none were giving more. REPRESENTATIVE HIMSCHOOT expressed concern about local control and sought to confirm that districts are currently spending the funding they receive for correspondence programs on these programs. MR. JEPSEN replied that this is correct. 9:57:39 AM REPRESENTATIVE PRAX moved to table Amendment 8. REPRESENTATIVE STORY objected. She expressed concern about local control; therefore, tabling the amendment would not change this. 9:58:25 AM A roll call vote was taken. Representatives Prax, McCormack, McKay, and Ruffridge voted in favor of the motion to table Amendment 8 to HB 139, as amended. Representatives Story and Himschoot voted against it. Therefore, by a vote of 4-2, Amendment 8 was tabled. 9:59:02 AM CO-CHAIR RUFFRIDGE announced that HB 139, as amended, was held over.