HB 87-EXTEND SPECIAL EDUCATION SERVICE AGENCY  8:45:38 AM CHAIR GATTIS announced that the final order of business would be CS FOR HOUSE BILL NO. 87, "An Act relating to allocations to the special education service agency and extending the special education service agency; and providing for an effective date." 8:45:52 AM REPRESENTATIVE PETE HIGGINS, Alaska State Legislature, speaking as the prime sponsor, introduced HB 87 and recommended that the Special Education Service Agency (SESA) program be extended to June 30, 2021. He stressed the importance for having a service that provides support in a child's village to help them develop abilities and become functional in the community. 8:47:47 AM REPRESENTATIVE P. WILSON noted that the auditor's report supports continuance of the program. It also indicates that the services provided are not available or duplicated through any other entity. 8:48:55 AM TOM STUDLER, Staff, Representative Pete Higgins, Alaska State Legislature, paraphrased testimony from a prepared statement, which read as follows [original punctuation provided]: The Special Education Service Agency (SESA) us a non- profit organization established by the Alaska State Legislature in 1986 under Alaska State statute (AS 14.30.600). SESA's role is to provide school districts with training specific to a student's disability. The availability of SESA's services allows students, with low incidence disabilities, to receive special education services in their home community and keeps students with their families. SESA provided service to 45 school districts and 223 students during the last school year. During this time, SESA also provided 320 onsite consultations with school districts. No other government agency or private sector entity in the State provides specialized assistance to school districts for educating students. The Special Education Service Agency is scheduled to terminate June 30, 2013. In the opinion of the Legislative Budget and Audit Committee: the termination date for this agency should be extended. They recommend the legislature extend the termination date to June 30, 2021. The Department of Health and Social services and The Department of Education & Early Development both support the extension of the Sunset date to June 30, 2021. 8:51:07 AM KRIS CURTIS, Legislative Auditor, Legislative Audit Division, Legislative Agencies and Offices, paraphrased testimony from a prepared statement, which read as follows [original punctuation provided]: The division of Legislative Audit conducted a sunset review of the Special Education Services Agency also known as SESA and issued our report last year. The main objective of the audit was to determine if the agency was operating in the public interest and whether its termination date should be extended. We conclude that SESA is serving a public need and is essential in meeting the Federal law that requires the State ensure that all children with disabilities have available to them a free appropriate public education that meets their unique needs. SESA serves over 200 students located in mostly non-urban locations through its low incidence disabilities program. We recommend extending SESA's termination date until June 30, 2021. However, our recommendation for extension comes with recommendations to improve collaboration and oversight. The biggest issue facing SESA is the flat funding of its Low Incidence Disability program. The funding level is set in statute and hasn't been increased in 14 years thereby decreasing the real value of its budget by 36 percent. This has made it difficult to hire qualified staff. SESA's unique organizational structure has left it with no mechanism for seeking an increase to its budget during the annual budgetary process. SESA's funding as identified in the public school funding statute provides an amount per student as a "not less than" amount. Since SESA's funding comes from the public school funding statutes, it is funded through DEED. DEED could ask for increases as part of its annual budget process but has chosen not to do so since SESA reports to the Governor's Council on Disabilities and Special Education which is organizationally located within the Department of Health and Social Services. DEED management does not consider their department's responsible for monitoring the adequacy of SESA's budget. The Governor's council did support legislation to increase SESA's during the past session but the bill was not successful. In recommendation No. 1 of the report, we hold DEED management accountable for monitoring SESA because DEED is responsible for fulfilling the federal law regarding special education. Because DEED is the entity the ultimately must meet the federal requirement, it should be taking a more active role in monitoring SESA. We recommend that DEED management and SESA management collaborate to ensure SESA is operating and funded as intended by the legislature. DEED's commissioner does not agree with the recommendation. Historically the funding for SESA has been a legislative process and he sees no need for a change. DEED does not want to be held accountable for SESA's operations. And we understand his viewpoint since the oversight responsibility for SESA is fragmented and confusing. Which brings me to the Auditor's Comments section of the report. In the Auditor's Comments section of the report, we discuss SESA's organizational structure which has led to confusion as to oversight responsibility for funding and monitoring SESA. SESA is a nonprofit corporation created by statute to report to the Governor's Council on Disabilities and Special Education. It must report to the Governor's Council, however, the council does not have budgetary authority over SESA. As a component of public school funding, SESA's main program, its Low Incidence Disabilities program, is funded through DEED. To further complicate matters, as a nonprofit corporation, SESA has its own bylaws and its own board of directors. The Auditor's Comments Section of the audit explains SESA's organizational structure and highlights the need for legislative clarification as to which entity should be held accountable. The audit contains a second recommendation addressed to SESA's board president to revise board policies and improve SESA board oversight. There has been a fairly recent change in the executive director position and the board president has already initiated changes to help improve oversight. 8:55:51 AM REPRESENTATIVE P. WILSON asked if there is concern for the changes made by the board president, and whether the legislature should consider any statutory amendments. MS. CURTIS responded that the changes have not been audited but opined that it appears the board is moving in the right direction. REPRESENTATIVE LEDOUX asked what the pros and cons would be for placing SESA under the purview of the Department of Education and Early Development (EED). MS. CURTIS answered that the examination of that option was not part of the audit. She clarified that the audit was based on the eleven sunset criteria, required by statute, to evaluate the agency. It has been concluded that the agency serves a public need and specific issues were identified for further scrutiny. CHAIR GATTIS opined that oversight is best served when one foot is in each department. REPRESENTATIVE P. WILSON agreed, and conjectured that the department would be challenged to incorporate funding for a non- profit organization. She suggested that the required reports from SESA be provided to both the governor's office as well as EED. 8:58:56 AM REPRESENTATIVE SEATON addressed the topic of accountability and opined that requiring diversified reporting can result in non- accountability, stating "...when the buck doesn't stop anywhere, it's easy to push it off onto somebody else." He asked if one of the identified concerns is the lack of one state agency being held accountable. MS. CURTIS said accountability is spread out, and EED has a role regarding funding and oversight of some planning documents. Additionally, the non-profit board seats a member of EED staff. However, statute separates responsibility between agencies. The department's response to the audit highlighted that any change to the low incidence disabilities budget requires a change in statute and is addressed through the legislative process. During the previous legislature, the governor's council introduced legislation but it was not successful. 9:00:58 AM REPRESENTATIVE LEDOUX commented that "a bureaucratic mess" has ensued and suggested returning to the drawing board to consider redesign options. 9:01:44 AM PATRICK PILLAI, Executive Director, Special Education Service Agency (SESA), introduced his presentation. 9:02:28 AM The committee took an at-ease from 9:02 a.m. to 9:04 a.m. MR. PILLAI provided a video illustrating the work of the program in various Alaskan school locations, to demonstrate the outreach work performed throughout the state by SESA. 9:11:11 AM The committee took an at-ease at 9:11 a.m. MR. PILLAI paraphrased the agency's mission statement, which read: SESA provides consultation and training to support the unique educational needs of individuals and the Alaskan communities that serve them. He then provided a brief background of the program, to state that SESA was created in 1986 as a not-for-profit corporation to meet federal requirements of Individuals with Disabilities Education Act (IDEA). Together with EED, SESA worked to create an infrastructure, in accordance with session laws, to satisfy objectives for providing a public education to individuals with low incidence disabilities via a cadre of itinerant specialists working throughout the school districts with an emphasis on rural environments. The agency is governed by the Alaska Governor's Council on Disabilities and Special Education. Funding is received as a low incidence disabilities appropriation through statute at a rate of $15.75 multiplied by the previous year's average daily membership (ADM). He said there has not been a funding increase for 15 years, thus the proposal for a multiplier of 36 percent to come apace with inflation. An annual one-half percent per year inflation increase is requested for the ensuing eight years following reauthorization. 9:14:54 AM MR. PILLAI said that under AS 14.30.630(b)(1) SESA is required to provide the following services: itinerant outreach services to students who are deaf, deaf-blind, mentally retarded, hearing impaired, blind and visually impaired, orthopedically disabled, health-impaired in other ways, severely emotionally disturbed, and to students with multiple disabilities; special education instructional support and training of local school district special education personnel; and other services appropriate to special education needs. The agency is also involved in other services, which include: operation of the Alaska Autism Resource Center; facilitation of Bring the Children Home to repatriate psychologically diagnosed children who have been residing in facilities outside of Alaska; administration of the state deaf-blind grant; and an indicators program to supply the state with data for reporting purposes. 9:17:13 AM MR. PILLAI drew attention to a map of the state with numbers attached to each district to indicate students being served, which total 260. He provided specific examples of students being served by SESA specialists. Additional to student services, training is also conducted to educate teachers, with a primary focus is on rural Alaska. He pointed out that when district's experience significant staff turnover, the SESA specialist may hold the continuity factor of a student's individual education program (IEP). Specific SESA services include: on-site consultation with strategies based on observation/modeling/evidence; in-service training for professional development; host the Alaska State Special Education Conference (ASSEC); assist with specific courses designed and offered for university credit; participate on the Alaska Deaf Education Advisory Board; and partner with other non-profit organizations such as Stone Soup and the Center for Human Development at the University of Alaska Anchorage (UAA). 9:23:05 AM MR. PILLAI directed attention to an image provided in the committee packet illustrating the SESA website to point out the user friendly format and how school districts can access the necessary forms to request agency assistance. He then addressed a graph titled "SESA FY 12 Student Consultation by District," and said it captures only the 1:1 student work, not professional training, per district. He said an important aspect of SESA services is the combination of evidence based practices and targeted interventions. A loss of funding will result in the reduction of these services, and an allotment request will accompany an amendment to the bill when it comes before the finance committee. He offered other reasons for the necessity of a monetary increase, including the quality of professionals required for staff, retention issues, and the ability to offer competitive salary/benefit packages. 9:28:26 AM CHAIR GATTIS opened public testimony. 9:28:52 AM DR. P. J. FORD SLACK, Principal, Sitka High School, stated support for HB 87 and urged members to speak with anyone connected with SESA in any area of the state, and predicted that positive feedback will result. 9:29:33 AM ERIC GEBHART, Superintendent, Nenana City School District, stated support for HB 87 and identified that he chairs the 28- member Governor's Council for Disabilities and Special Education; the governing board of SESA. He said five board members handle the direct relationship with the agency, and he reviewed the membership seats. The board supports both the reauthorization as well as the proposed funding increase to $21.50 per student, as recommended by the Legislative Audit report. The capacity of the service to bring expertise to every area of the state has already been illustrated, he finished. 9:32:07 AM CARL ROSE, Executive Director, Association of Alaska School Boards (AASB), commented that the creation of special education was enacted in 1975 with the passage of [Public Law 94-142 (Education of All Handicapped Children Act) also known as, Individuals with Disabilities Education Act (IDEA)]. The special education mandate has been altered several times since it was established and through the reauthorization process. The means for meeting the mandate has remained a focus, and the original promise of 40 percent federal funding has yet to reach that level; currently the rate is approximately 14-16 percent. The mandate is complicated and been revisited many times. The administrative burdens have become extensive with each reworking and continued honing of the law by advocates of special education. Reporting is provided to the governor's council, EED and the federal authorities, and, reiterating Representative Seaton's sentiment, he said, "If everybody's responsible, nobody's responsible." He said the extensive reporting generates little response until an audit is performed. The work conducted by SESA remains the best solution to address the complicated requirements of the special education mandates in place. He addressed Representative LeDoux's suggestion for reworking the system and said IDEA has taken that approach but the result has been additional administrative requirements. The diversity of Alaska is immense and PL 94-142 requires that "all kids will get the best bite of the apple that we can give." The mandate has continued to become more complicated, since inception, and received less attention and funding, and SESA is the best possibility for meeting the requirements. 9:35:23 AM REPRESENTATIVE P. WILSON asked whether there are oversight steps the committee should be considering. MR. ROSE responded that special education is a huge, involved issue, and assured the committee that SESA is handling the bulk of the complications. 9:36:42 AM MILLIE RYAN, Executive Director, Resources Empowerment & Advocacy in the Community and Home, Inc. (REACH), said she has served in the past as a SESA board member, and offered some history for how SESA governance came about, adding that the system has worked fairly well with minimal issues. A question often raised is whether SESA duplicates intensive needs funding and she said there are specific criteria and close oversight to guard against that happening. Another question that often arises is whether SESA employees are special education teachers, but special education teachers are not specialists in specific areas and are not prepared to receive children with low incidence disabilities. Finally, she said the good work that SESA provides is evident and offered an anecdote about a REACH student who benefited and was able to maintain a residence close to family due to the services provided. 9:41:51 AM REPRESENTATIVE LEDOUX asked what services REACH provides. MS. RYAN outlined the range of services provided through the REACH agency, which include an infant learning program, and respite and in-home services. REPRESENTATIVE LEDOUX inquired whether REACH works with the school districts. MS. RYAN replied yes, very closely with complimentary and transitional services, and to a follow-up clarified that the services are not duplicative of the educational services SESA provides. 9:44:28 AM BRUCE JOHNSON, Executive Director, Alaska Council of School Administrators, stated support for HB 87 and said this is a valued, necessary service and districts would be taxed to fill the void in the absence of SESA's expertise. CHAIR GATTIS closed public testimony. 9:46:03 AM REPRESENTATIVE SEATON moved to adopt the proposed committee substitute (CS) for HB 87, Version 28-LS0392\U, Mischel, 2/8/13, as a working draft. There being no objection, Version U was before the committee. 9:47:12 AM MR. STUDLER said the CS changes begin on page 1, line 10, represented in uppercase letters. He said this language would be redacted to more clearly reflect the actuality of how the retirement system is handled. REPRESENTATIVE SEATON clarified the purpose of the CS by paraphrasing from the language being proposed for removal, which read [original punctuation provided]: THE AMOUNT ALLOCATED TO THE AGENCY SHALL BE REDUCED EACH FISCAL YEAR BY THE AMOUNT CONTRIBUTED BY THE DEPARTMENT TO THE TEACHERS RETIREMENT SYSTEM (AS 14.25) OR THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM (AS 39.35) ON BEHALF OF EMPLOYEES OF THE AGENCY. REPRESENTATIVE SEATON inquired whether there would be any fiscal impact by this action. MR. STUDLER stated his understanding that the change reflects how the agency conducts business and does not alter funding. He then deferred. MR. PILLAI confirmed that the proposed CS does not affect the funding of the agency in any way. 9:50:04 AM REPRESENTATIVE P. WILSON moved to report CSHB 87, Version 28- LS0392\U, Mischel, 2/8/13, out of committee with individual recommendations, and the accompanying fiscal notes. REPRESENTATIVE SEATON objected, and stated his understanding that one of the intents of the bill is to remedy the 15 years of flat funding, and noted that the CS does not appear to incorporate that intent. He expressed concern for continued flat funding of SESA and opined that without a fiscal note the state obligation to meet federal education requirements may be in jeopardy. He proposed that a [letter of intent], from the committee, be forwarded with the bill, when it comes before the finance committee. 9:53:07 AM CHAIR GATTIS, hearing no objection, announced that a [letter of intent] would be forwarded with HB 87. 9:53:15 AM REPRESENTATIVE SEATON removed his objection. 9:53:20 AM The committee took an at-ease from 9:53 a.m. to 9:54 a.m. 9:54:17 AM CHAIR GATTIS, hearing no further objection, announced that CSHB 87(EDC) was reported from the House Education Standing Committee.