HOUSE BILL NO. 203 "An Act making an appropriation to the Legislative Council for a study of school district cost factors; and providing for an effective date." REPRESENTATIVE PEGGY WILSON, SPONSOR testified in support of the legislation. She explained that the legislation sets aside $350.0 thousand dollars for a class differential study on school district cost factors. The state of Alaska has a constitutional obligation to provide for a full education for all students. TAPE CHANGE, HFC 01 - 79, SIDE B  Representative Wilson observed that the economic status of different areas of the state have changed since 1986. School district cost factors were last changed in 1986. She maintained that the current formula, while well intentioned, has unintentional consequences. A design error, which tracked expenses as opposed to actual costs of doing business in each school district, has resulted in flawed district cost factors. Failure to precisely measure differential costs across the state has resulted in inequitable funding. Representative Wilson noted that many questions remain unanswered such as: What is the cost of providing an education in each school district as it relates to Anchorage as a base? What are the exact costs of electronic communications in Yakutat? What is the specific cost of fuel in Dillingham? What are the property insurance rates in Tok? What does it cost to get a school fire code inspector to Angoon? Representative Wilson maintained that HB 203 would provide factual answers to these questions. HB 203 proposes an independent study of school cost differentials. She stressed the need to assess actual costs in each school district. Vice-Chair Bunde expressed support for the study, but questioned the difference between the costs of doing business and the cost of providing education. Representative Wilson noted that the cost of doing business differs from school district to school district depending on the access to services. Vice-Chair Bunde suggested that section 1 be changed to the "cost of providing an education in each school district" as opposed to the "cost of doing business." Representative Wilson suggested the addition of "it shall be completed by contract" on page 2, line 5. She did not want the study to be left to the Department of Education and Early Development or a committee. Representative John Davies suggested the substitution of "operating a school" for "doing business" on lines 9 and 12. Representative Wilson did not object to the recommendation. Representative Davies MOVED to insert "operating a school" and delete "doing business" on lines 9 and 12. Representative Croft argued in support of the use of "providing an education". He pointed out that it would be possible to operate a school without doing a good job of providing education. He added that it would be necessary to operate a school in order to provide education. Representative John Davies pointed out that operating a school includes hiring faculty. Vice-Chair Bunde summarized that the intent is to distinguish between the cost of running a business and the cost of education. Co-Chair Williams agreed that the question is the actual cost of the school. Representative Whitaker questioned if the intent is to distinguish the cost of operating a school in terms of maintenance and operation of a school facility or the cost of providing an education. He emphasized that that intent is to determine the cost of providing an education. He suggested that "operating a school" may be too restrictive. Representative Davies MOVED to AMEND Amendment 1 to insert "providing an education" on line 9. "Operating a school" would be retained on line 12 and insert "actual" at the end of line 11. There being NO OBJECTION, the amendment to Amendment 1 was adopted: The study (1) should be based on the cost of providing an education in each school district; (2) should consider the cost of living, including the cost of food, housing, utilities, transportation, medical expenses, property values, or other costs that contribute to the actual cost of operating a school. There being NO OBJECTION, Amendment 1 as was adopted as amended. Representative Croft MOVED to ADOPT Amendment 2: On page 2, line 3 insert "shall" and delete "may"; and on page 1, line 5 delete "prepare or." He explained that the amendment would take out the option of doing the study by any manner other than a contract. Representative Wilson questioned if the date should also be changed to allow more time for the study to be completed. Representative Hudson argued in support of retaining the date and pointed out that the following year would be the second year of the legislature. Vice-Chair Bunde agreed with the intent of having the Legislative Council contract for the study. He pointed out that there may be some expense involved to assure that there are appropriate guidelines for a contract. Representative John Davies MOVED to AMEND Amendment 2: delete "or" and insert "and" (to prepare and contract for the preparation of a study). There being NO OBJECTION, the amendment was adopted. There being NO OBJECTION, Amendment 2 was adopted as amended. Representative Whitaker questioned if the review would be done on a periodic and regular basis. Representative Wilson observed that SB 36 required a two-year review. Representative Wilson referred to a study by the McDowell Group, which was compiled in relationship to SB 36. The study recommended that the current district cost factors be maintained and that the department's effort be placed in reexamining the methodology. She emphasized that the intent of HB 203 is to make sure that the guidelines are different and the actual cost to educate a child in each district is ascertained, so that the differences can be reviewed. She added that the Department of Education and Early Development and the Education's Foundation Task Force recommended a similar study. Representative John Davies expressed concern with page 1 line 6. He MOVED to ADOPT Amendment 3: delete "the preparation of a study of the district cost factors used as a component" and insert "preparation of a study recommending district cost factors to be used as a component". The change would clarify that the intent is not just a study of existing factors, but that there should be recommendations for how it should be fixed. There being NO OBJECTION, it was so ordered. PAT HICKEY, KENAI PENINSULA SCHOOL DISTRICT, KENAI testified via teleconference. He noted that the Kenai Peninsula Borough contains urban and rural areas. He encouraged the contractors to take into full account the differences by attendance areas and not just consider the district as a whole. He noted that the cost of providing an education in some small communities have already been compensated for by economy of scale factors by size, but tend to be diffused by a district wide application of an area cost factor. DARROLL HARGRAVES, EXECUTIVE DIRECTOR, ALASKA COUNCIL OF SCHOOL ADMINISTRATORS testified via teleconference. He spoke in support of the legislation. He pointed out that cost differential studies have been done in a true attempt to determine the cost of doing business in different geographical areas of the state. The audits of school districts were used in SB 36 in an attempt to assess what school districts were actually spending. He pointed out that a school district, which held tough on salaries though negotiation would be disadvantaged. The cost differentials were based on what "is" not on the "true" costs of doing business. He recounted a gift from an oil company of computers. He tried to ship the computers to one community and found that they could only be shipped strapped into the passenger seats at the full price of a passenger transport. Another school district was able to pick up the computers at no cost. He concluded that there are true costs of doing business from one community to another. He emphasized that the cost differentials must reflect true costs. He maintained that cost differentials in SB 36 were in error. EDDY JEANS, MANGER, SCHOOL FINANCE AND FACILITIES SECTION, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT spoke in support of the legislation. The department would like to be involved in the development of the RFP to assure that all the cost factors are looked at and considered. The department would also like to assure that a methodology results in a tool that can be used on an ongoing basis to update the cost differentials as required by statute. The Department of Education and Early Development was not involved in the last selection. The Legislative Budget and Audit Committee contracted the last selection. Representative Hudson noted that nothing would preclude consultation with the Department of Education and Early Development on the RFP. He did not think that (consultation with the department) needed to be in the legislation but expressed a desire that the contractor confer with the department in determining what elements should be brought forward in the contract. Representative Croft observed that the Department of Education and Early Development was not consulted last time and pointed out that serious mistakes were made. He felt that it should be in the intent language. Representative Whitaker maintained that the intent is to strike a balance and determine a basis for the equitability of the formula. If the project becomes too vast and "potentially politically involved" then it would be a disservice. He added that it would also be a disservice if the study does not provide for input that is meaningful. He suggested that the intent should be carefully worded. Representative Hudson MOVED to ADOPT Amendment 4: add a new subsection: (6) Shall confer with the Department of Education and Early Development in preparation of the RFP for this study. Representative Guess pointed out that a new subsection would refer back to the study. She suggested that the language would be in the wrong place. Representative John Davies suggested an amendment to Amendment 4, to add the language on page 1, line 5: insert after "Council" "in consultation with the Department of Education and Early Development". Representative Hudson WITHDREW Amendment 4. Representative Davies MOVED to ADOPT amended Amendment 4, by Representative Hudson: insert after "Council" "in consultation with the Department of Education and Early Development". There being NO OBJECTION, it was so ordered. Representative Guess noted that five states have cost differentials, each with different methodologies. There is no agreement on the best way to determine an education price index. New research shows that an expenditure-based model is the worst way. She discouraged the use of an expenditure- based model. She acknowledged the difficulty of producing an unbiased model but emphasized the creation of a clear model. She spoke in support of a cost differential that is updateable with data outside of the department. Representative Hudson MOVED to report CSHB (FIN) out of Committee. CSHB 203 (FIN) was REPORTED out of Committee with a "do pass" recommendation. #hb193 HOUSE BILL NO. 193 "An Act relating to the primary election; and providing for an effective date." AVRUM GROSS, JUNEAU, stated that he was a member of a task force appointed by the Lieutenant Governor to address the fact that the state's primary election law ceased to exist, after the last primary, due to a decision of the United States Supreme Court (California Democratic Pary et al. v. Jones, Secretary of State et. Al.. (530 U.S. 567, 2000). He added that emergency regulations, which responded to the decision, expired. Mr. Gross explained that the Court ruled that, while states with blanket primaries could continue, political parties had the right to change the rules to limit participation. Alaska has operated under blanket primary law. The task force was established to deal with the fact that parties have to have input into who would participate in the selection of their candidates. He reviewed the makeup of the task force and concluded that it was nonpartisan. The Task Force's intent was to make the minimal change necessary to existing law. Public testimony was taken from all parties and the Department of Law. The recommendation of the Task Force was that all voters be allowed to vote in a party's primary unless the party notified the lieutenant governor, by September 1, that the primary would be closed. To the extent that party registration was an issue, the registration would have to be established 30 days before the election, which is the deadline for voter registration. He indicated that the proposal received support from the major parties. A blanket primary was chosen because it was traditional in Alaska and it would allow the maximum number of people to participate in the primary. The state would stand for maximum participation subject to a party's right to close. The original bill [based on the Task Force's recommendations] was changed in the House State Affairs Committee and the process reversed. Under the House State Affairs version, all primaries would be closed (only Republicans could vote in republican primaries and only Democrats could vote in democratic primaries) unless their party opened the primary. The House Judiciary Committee further amended the legislation to state that independents could also vote in a party's primary. Representative John Davies observed that the HJUD version partially opened the primary and questioned if a political party could chose to close their primary to independent voters. Mr. Gross affirmed that they could close their primary to independents. He summarized that the HJUD version allows parties to close or open their primaries as they see fit. The original bill opened primaries and required action by a party to close them. In response to a question by Representative Lancaster, Mr. Gross clarified that once a change occurs it remains in force until the party changes it. Changes must occur by September of the proceeding year. This provision was also contained in the original task force bill. TAPE CHANGE, HFC 01 - 80, SIDE A  In response to a question by Representative Hudson, Mr. Gross clarified that a [candidate] could not chose to allow all voters if their party restricted the ballot. Mr. Gross observed that the more a primary is narrowed the "purer" the candidates become, but emphasized that "at the same time the less chance they have to win a general election because they don't have support from a large number of people." Representative Whitaker clarified that a party's ballot would be open to nonpartisan and undeclared voters unless the party closes it. Mr. Gross agreed and interjected that it would not be open to any other registered party members. Co-Chair Mulder noted that the Court decision requires action by the Legislature. Representative John Davies observed that Court's action was in response to requests by the Republican and Democratic parties in Alaska and other states. Mr. Gross observed that an initiative in California began the [court's involvement in] blanket primary law. SARAH FELIX, DEPUTY ATTORNEY GENERAL, DEPARTMENT OF LAW provided information on the legislation. She explained that a question arose during deliberations in the House Judiciary Committee regarding "no party" petition candidates on primary election ballots. Under current law, unaffiliated candidates overlooked must appear on the primary ballot. The House Judiciary Committee decided that they would not appear on the primary election ballot. Unaffiliated candidates would only appear on the general election ballot. She noted that an amendment to AS 15,25,150, the filing deadline, is needed. The filing deadline was left at June 1. If "no party" candidates do not appear on the primary ballot the deadline would not be June 1. The filing deadline should be the date of the primary election. Legal opinions have indicated that "no party" candidates could be held to a earlier filing date. Co-Chair Mulder stated his intention to entertain an amendment to address the issue. Ms. Felix explained that "no party" candidates are those that do not belong to a recognized political party. Some may belong to a political group, which is an organization of people of a political affiliation that has not achieved the status of a recognized political party and some may not be representing any group. Alaska has six recognized political parties. Discussion ensued regarding the qualifications of recognized parties. Co-Chair Mulder observed that under the amendment certification would be required by the primary election date in order to be eligible for the November election. Representative John Davies MOVED to ADOPT a conceptual amendment to move the date in AS 15.25.150 to be consistent with the primary election date for filing for "no party" candidates. There being NO OBJECTION, it was so ordered. HB 193 was heard and HELD in Committee for further consideration.