HB 198-SPEC. EDUC. SERVICE AGENCY FUNDING/SUNSET  CHAIR DICK announced that the next order of business would be HOUSE BILL NO. 198, "An Act relating to the special education service agency." 8:29:53 AM SHEILA PETERSON, Staff, Representative Alan Dick, Alaska State Legislature, introduced HB 198, paraphrasing from the sponsor statement, which read as follows [original punctuation provided]: House Bill 198 removes a sunset requirement and increases state funding to the Special Education Service Agency (SESA), a not-for-profit organization established in statute in 1986. SESA is governed by the Governor's Council on Disabilities and Special Education and its own independent board of directors. The Special Education Service Agency assists local school districts to provide needed special education services. Sometimes districts cannot fully serve students that have low-incidence disabilities with their existing personnel and resources. SESA has a pool of educators trained to give support to teachers and administrators who work daily with students who are deaf, deaf-blind, mentally retarded, hearing impaired, blind and visually impaired, orthopedically disabled, health-impaired in other ways, and severely emotionally disturbed . . . (AS 14.30.630 (b)(1)). The Special Education Service Agency receives state support based on a funding formula adopted in 1998. Each year the Department of Education and Early Development allocates to SESA not less than $15.75 times the number of students statewide. Although local school districts have received an increase in state funding since 1998, SESA has not. Under HB 198, the multiplier increases as the base student allocation increases. Currently the computation (.4 percent of $5,680) equals $22.72 which approximates the impact of inflation from 1998 to 2011. The Special Education Service Agency is set to expire on June 30, 2013. During previous performance audits, both the Department of Education and the Legislative Auditor recommended removing SESA from the sunset process. House Bill 198 repeals the sunset requirement and thus allows SESA to plan long-term. Thank you for your support of this legislation. 8:33:06 AM MS. PETERSON stated that the Governor's Council on Disabilities & Special Education would become the oversight committee should the sunset audit requirement be removed. 8:33:46 AM REPRESENTATIVE P. WILSON, citing the lack of a fiscal note, asked what would be the increase over the years, and what the plan was for the extra funding. MS. PETERSON read from the handout, "Benefit of Increased Funding," [Included in members' packets] and stated that: A benefit of increase would be to enhance the district services; to provide more distance delivery and online [courses]; increase staff, so they could meet with more individual students; and then increase training for regular and special ed teachers. She estimated that the current state funding was $2-$3 million under the current formula for $15.75. 8:35:44 AM REPRESENTATIVE SEATON directed attention to Recommendation No. 1 in the December 18, 2003 Audit Report [Included in members' packets] which suggested that "SESA should transition to videoconferencing as the norm for the delivery of its service." He asked whether that recommendation had been implemented. 8:36:28 AM MS. PETERSON offered her belief that there was work in that direction. She deferred to Ms. Nagarkar and Ms. Davidson for clarification. 8:37:05 AM NANCY NAGARKAR, Executive Director, Special Education Services Agency (SESA), said that the agency currently received $2.021 million and, in response to Representative Seaton, she stated that there was a lot of videoconferencing, although some school districts did not have the equipment. She explained that Skype was also used, noting that both of these were "value added." REPRESENTATIVE SEATON pointed out that this House Education Standing Committee meeting was not videoconferenced. He explained that the committee might be "behind the curve, as well," noting that it would be helpful to see the testifiers. 8:39:04 AM REPRESENTATIVE P. WILSON asked how many additional staff would be hired, and how much revenue that would generate. 8:39:51 AM MS. NAGARKAR offered her belief that at least eight experienced staff would be hired. She said that the revenue estimate would depend on the child count, and she deferred for an actual estimate. 8:41:24 AM ERIC GEBHART, Superintendent, Nenana City School District, Vice Chair, Governor's Council on Disabilities and Special Education, stated his support for HB 198, and said that almost half of SESA's funding was derived from grants, and that the additional revenue from HB 198 would ensure that the mission of SESA could be met. He pointed out that SESA was interested in increasing the technology; however, due to the special nature of disabilities, a physical presence was often required. He emphasized the importance of removing the sunset clause in order to negotiate long term leases and offer assurances to the staff. 8:45:02 AM PAT DAVIDSON, Legislative Auditor, Legislative Audit Division, said that four reviews had been conducted on SESA over the past 20 years, and that the majority of recommendations had been for operational issues and service delivery, which included the teleconferencing currently being discussed. She relayed that the teleconferencing recommendation had sprung from the expansion of tele-medicine. She pointed to the audit review of 1995, and stated that the recommendation had been to extend SESA for 10 years or to remove SESA from the sunset process. She acknowledged that the sunset process allowed for a periodic evaluation; however, she pointed out that an audit could be requested through the Legislative Budget and Audit Committee. 8:47:21 AM REPRESENTATIVE SEATON asked if the legislative audit was supportive of the recommendation to expand videoconferencing. 8:48:02 AM MS. DAVIDSON replied that, with changing technology, it would be necessary to have a follow up audit for an accurate response. 8:49:08 AM ELIZABETH SWEENEY NUDELMAN, Director, School Finance and Facilities Section, Department of Education and Early Development (EED), addressed the EED fiscal note. She reported that HB 198 would increase the SESA funding by $901,000, as it would change the allocation from $15.75 multiplied by the statewide average daily membership (ADM) to .4 percent of the base student allowance (BSA) multiplied by the ADM. She opined that the SESA increase would be included each time there was a BSA increase. She noted that the BSA increase was "directly attributed to the school districts for their public school funding formula" and that each BSA increase would require a new SESA fiscal note from EED. She pointed out that, alternatively, the increase could be placed in statute. She stated that EED was in support of an extension for the sunset provision. 8:51:29 AM REPRESENTATIVE SEATON asked what time frame was suggested for the sunset extension. MS. NUDELMAN replied that EED supported an extension for as long term as was allowed by the Legislative Audit Division. 8:52:06 AM CHAIR DICK, referring to the graph titled "While School Districts have had their Base Student Allocation increased... ," [Included in members' packets] pointed out that SESA funding had remained flat for the past 10 years, while CPI (Consumer Price Index) and BSA had increased, which indicated a necessity to "be linked with something sensitive to the cost." 8:52:38 AM REPRESENTATIVE FEIGE asked what SESA would do with the extra funding. 8:52:54 AM CHAIR DICK directed attention to the "Benefit of Increased Funding:" [Included in members' packets] 8:53:37 AM MS. NAGARKAR, in response to Representative Feige, relayed that additional specialists would be hired to provide increased services to students; travel costs and distance delivery would be funded; and on-line courses for additional training to regular teachers, special education teachers, and paraprofessionals throughout Alaska would be offered. 8:54:19 AM REPRESENTATIVE P. WILSON asked if SESA received the e-rate subsidy. MS. NAGARKAR replied that it had been awarded. 8:54:51 AM REPRESENTATIVE P. WILSON, directing attention to another recommendation, asked if SESA had investigated the necessity to file tax returns and pay excise taxes. 8:55:07 AM MS. NAGARKAR replied that SESA had done this. 8:55:14 AM BRUCE JOHNSON, Executive Director, Alaska Council of School Administrators, stated his support for HB 198. He said that some Alaska school districts hired school psychologists from the Lower 48, but that this was not possible for the smaller school districts. He opined that SESA was a good use of resources, and an essential service, required by state and federal law, for young people. He stated that SESA was a valued organization and service. 8:57:41 AM REPRESENTATIVE P. WILSON asked if there had been an increase in the number of special education students since SESA had started. 8:58:32 AM LUCIENNE SMITH, Special Education Services Agency (SESA), replied that the SESA caseload had increased by 39 percent since FY2001. REPRESENTATIVE P. WILSON suggested that this large increase should be reported early in testimony during subsequent hearings. CHAIR DICK announced that public testimony would remain open. [HB 198 was held over.]