HOUSE BILL NO. 191 An Act relating to charter schools; and providing for an effective date. MIKE TIBBLES, STAFF, REPRESENTATIVE GENE THERRIAULT, spoke to Amendment #1, 1-LS0598\N.1, Ford, 1/31/00. [Copy on File]. Vice Chair Bunde MOVED to adopt Amendment #1. Co-Chair Therriault OBJECTED for the purpose of discussion. Vice Chair Bunde explained that that the amendment would make the language of the bill more permissive. The current language states that a charter school may not elect to receive services. The amendment clarifies that the charter school and the school district can negotiate over services that are appropriate for the charter school. Co-Chair Therriault asked if the charter school has no "special needs" children, what would happen to the federal dollar allocation. Vice Chair Bunde explained that during negotiations, the school district would be responsible to stipulate that the money be used for the "betterment of all". Co-Chair Therriault WITHDREW his OBJECTION to the amendment. REPRESENTATIVE FRED DYSON foresaw no problem with inclusion of the amendment. He stated that it was language that was intended to be included. Inclusion of that language would assume that there is a congenial relationship between the two entities, however, he acknowledged that is not always the case. Representative Foster asked what would occur if the relationship was not smooth. Representative Dyson replied that the school boards would be the final entity to make that decision. There being NO further OBJECTION, Amendment #1 was adopted. Mr. Tibbles spoke to Amendment #2, 1-LS0598\N.2, Ford, 2/3/00. [Copy on File]. He noted that the amendment would give charter schools more flexibility in the space in which they could operate. Representative Foster asked if the fire codes would be more restrictive. Co-Chair Therriault voiced concern with the amendment. Co-Chair Mulder MOVED to adopt Amendment #2. Co-Chair Therriault OBJECTED for the purpose of discussion. Representative Dyson explained that the school building safety requirements are very stringent. What the charter school people have found is that if they can not find public school space, it is inordinately difficult to find a building to lease that meets the school requirements. The charter school people want to go with the same standards that are used for "large groups of people who come together". Representative Dyson pointed out that most of the charter schools have small populations. He noted that in the language of the amendment, it stipulates that the safety codes for the children are met. He emphasized that it has been very difficult for prospective charter schools to find adequate facilities. Co-Chair Therriault inquired if the same standards had to be met by private schools. Representative Dyson replied that they did not. Currently, private schools must have the same standard as exists in public building facilities. Representative Foster questioned how those standards would apply to a public building. Representative Dyson explained that each school administrator would have the final say on that concern. He stressed that getting small children out of a burning building is always a concern. He believed that any superintendent would be capable of making the proper decision. He noted that the amendment would extend the contract period. Vice Chair Bunde advised that he would support the amendment because the chief supporting administrator would have the final say and would ultimately be in charge. The liability would be "personified" in that person. He stressed that the language of the amendment does not provide a lot of flexibility as the ultimate authority rests in that person. Representative Grussendorf noted that he opposed the amendment because it would require that the safety standard rest solely on the school official. The standards for public schools are always much more stringent because of that responsibility. He emphasized that it would be a mistake to incorporate the amendment. Co-Chair Therriault noted that he would be more comfortable knowing that school administrator was directly responsible for the decision. Co-Chair Therriault WITHDREW his OBJECTION to Amendment #2. Representative Grussendorf OBJECTED to adopting Amendment A roll call vote was taken on the motion. IN FAVOR: Foster, Austerman, Bunde, G. Davis, Therriault, Mulder OPPOSED: Grussendorf, Moses, Williams Representative J. Davies and Representative Phillips were not present for the vote. The MOTION PASSED (6-3). Vice Chair Bunde MOVED to adopt Amendment #3, 1-LS0598\N.3, Ford, 2/4/00. [Copy on File]. Mr. Tibbles explained that the amendment was submitted by the Department of Education and Early Development to clear up the statutes and reference on basic need. He reminded members that there are four factors which determine basic need. The Department believes that it is important to reference all four of these concerns. WES KELLER, STAFF, REPRESENTATIVE FRED DYSON, replied that the amendment was a housekeeping measure. Co-Chair Therriault stated that from previous conversations with Representative Dyson, he did not have an objection to the amendment. There being NO OBJECTION, Amendment #3 was adopted. Vice Chair Bunde MOVED to adopt Amendment #4, 1-LS0598\N.4, Ford, 2/3/00. [Copy on File]. Mr. Tibbles explained that the amendment would delete the sunset clause. There being NO OBJECTION, Amendment #4 was adopted. BARBARA THOMPSN, DEPTY DIRECTOR, DIVISION OF TEACHING AND LEARNING SUPPORT, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, spoke to the fiscal note. She stated that the bill would expand the number of charter schools throughout the State. The fiscal note would provide funding for that endeavor. This legislation would institutionalize the State program. Those people who intend to start a charter school must have the expertise to help plan and implement that endeavor and the fiscal note would provide for that. Co- Chair Therriault questioned the need for a full time education specialist at Range 21. Co-Chair Mulder added that the Range 21 position would need a + time sectary. He additionally, questioned the contractual $50 thousand dollars requested to evaluate the effectiveness and success of charter schools within Alaska. Ms. Thompson advised that the contractual amount includes funding for providing essential evaluations and covers costs for the regular contractual agreement. Representative Williams asked about the statewide acceptance of the charter schools concept. (TAPE CHANGE HFC 00 - 27, Side 2) Ms. Thompson noted that there is a lot of interest in concept of charter schools. She noted that it is obviously indicated by viewing charter school applications from within the Alaska schools districts. The bill will allow more schools to start up. Representative Williams observed that the bill would be asking the State to spend more money. He questioned how the additional funds would be spent and asked if there was supporting material indicating that the charter schools are doing well. Ms. Thompson replied that there has not been funding available at any time to provide an extensive evaluation. Co-Chair Therriault pointed out that the legislation does exist due to requests by constituents. Representative Williams reiterated that there is additional funding requested with the legislation. Co-Chair Therriault advised that the fiscal concerns for the extra personnel would be addressed at the end of session during Conference Committee. Representative Grussendorf referenced Section 4(f). He asked why would the school board approve another charter school given the considerations of Section 4(f). He believed that would curtail the growth of charter schools throughout the State. Mr. Keller replied that he did not think that would happen. He commented that it is only fair that the local contribution be distributed equitably. Most school districts are distributing local contribution in excess of 4 mils. Co-Chair Therriault agreed that Section #4 merited concern with regard to compliance with federal guidelines. Mr. Tibbles explained that at this time, he did not know if Section #4 would cause complications with the federal guidelines. Mr. Tibbles had not had an opportunity to speak with the federal auditors regarding charging direct and indirect costs. He noted that Section #4 would require that the district itemize each service provided. In that each service must be recorded, a potential exists that may require itemization of the indirect costs. The problem with that is the federal guidelines that determine how things should be accounted for. It could be a problem if a charter school "pushed" the school district to itemize the indirect costs. Anchorage and Fairbanks school districts have indicated that this could become an accounting "nightmare". Without solid information from the auditors, Mr. Tibbles did not know the scope of the problem this could cause. In response to Co-Chair Therriault, Mr. Tibbles pointed out that Legislative Legal has suggested options for language to address this concern. He noted that language could be included in the "exceptions" section for the indirect costs by providing specific examples, or to add the language "except for services that are not required to be itemized". Representative Bunde asked if it should be included as an amendment or simply stated through the intent of the Committee. Co-Chair Therriault believed that it should be placed in the "exceptions" section as recommended by Legislative Legal. Representative Austerman spoke to the library funds coming to the charter school. Mr. Keller stated that the sponsor assumes that the school district and the charter school would be negotiating and that the final decision would be decided at the local level between the charter school and the school district. Mr. Tibbles reiterated the suggestion provided made by Legislative Legal Services which would place the information either under the "exceptions" or on Page #3, Line 12, following the word "itemized". Co-Chair Therriault MOVED a conceptual amendment which would add to the list of exceptions that the itemization not be so specific that it would run counter to the federal guidelines. Mr. Keller replied that Representative Dyson would support that change. There being NO OBJECTION, a conceptual Amendment #5 was adopted. Co-Chair Mulder MOVED to report CS HB 191 (FIN) out of Committee with individual recommendations and with the accompanying fiscal note. Representative Austerman OBJECTED. He stated that his understanding of charter schools was that they were not suppose to cost the State any more money than that based on the student count. He warned that he was additionally, "nervous" about the Section #4 allocation. Representative Williams OBJECTED to the amount of money proposed to be spent. He added that the sunset clause should have remained in the bill. Representative Williams voiced concern that charter school students might not be adequately educated, while at the same time spending more money per student. Co-Chair Therriault advised that he had indicated to the Department that they should not begin spending the money as proposed in the fiscal note. He foresaw a reduced fiscal note. Co-Chair Therriault invited Representative Williams to propose a reduction to the fiscal note at this time. Representative Williams asked how that action would affect the charter school system and how it could be tracked. He recommended that the existing charter schools be more closely watched for the next year or two to see how well they are performing. Representative Grussendorf stated that he did not know why a school board would find any incentive to expand the charter school system with the inclusion of Section #4. Additionally, he warned of the repercussions of not giving the Department adequate funding to cover the fiscal notes to determine accountability. He stated that he could not support the proposed legislation given these concerns. Ms. Thompson echoed Representative Grussendorf's concern in not funding the fiscal note to provide for the evaluation effectiveness study. She emphasized that there are more charter schools "coming on board" each year. The school district must be providing more evaluation on the effectiveness with the proposed increases to charter schools. She stressed that it is important to have expertise and evaluation at the State level. A roll call vote was taken on the motion to move the bill from Committee. IN FAVOR: Williams, Bunde, G. Davis, Foster, Mulder, Therriault OPPOSED: Grussendorf, Moses, Austerman Representative Phillips and Representative J. Davies were not present for the vote. The MOTION PASSED (6-3). CS HB 191 (FIN) was reported out of Committee with a "do not pass" recommendation and with a fiscal note by the Department of Education and Early Development.