HOUSE BILL NO. 425 An Act relating to funding for school districts operating secondary school boarding programs, to funding for school districts from which boarding students come, and to inoperative school districts; and providing for an effective date. REPRESENTATIVE JOHN COGHILL explained that current provisions are expanded under HB 425 allowing a district to receive a stipend for a student to travel to attend a secondary boarding school that began before January 1, 2004. He noted that Sitka's Mt. Edgecumbe is a boarding school under a different statute. Galena, Nenana and Bethel have a broad range of boarding school options. HB 425 allows students to choose between a school in their district or a boarding school option. Representative Coghill noted that it is a change in policy, which the fiscal note reflects. The bill adds a sunset date of 2009 and protects smaller districts from being dropped from the critical 10-student Average Daily Membership (ADM) count if students leave to go to boarding school. The boarding schools in Nenana, Bethel and Galena offer cultural, social and educational changes and possibilities for students. Representative Coghill explained that Section 1 requires the secondary school boarding program to have been operating by January 1, 2004. Section 2 relates to the student count being less than the minimum of ten, and Section 3 is the repealer. Representative Coghill pointed out that Nenana's and Galena's actual capacities are lower than the figures shown on the second page of fiscal note Component No. 148. The Bethel school students are not all within a single boarding home. He concluded that HB 425 would expand the circumstances allowing the boarding school to receive a reimbursement stipend. Under the bill, a student would not have to pass the current entrance standards, which require that his home district does not include a boarding school. EDDY JEANS, MANAGER, SCHOOL FINANCE AND FACILITIES SECTION, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT, stated that the fiscal note totals $1,179,000 and he explained that page 2 shows how the figure was derived. Galena has the capacity to serve 100 kids, but 8 already qualify for boarding home stipends because they come from the Pribilof Islands and don't have daily access to a secondary program on St. George. He discussed the stipend and costs for the remaining 92 kids at Galena. Mr. Jeans pointed out that these three programs are 180-day, or full term programs. Mr. Jeans noted that all three programs are currently operating at capacity and the Department would not recruit additional students from schools. He favored the bill's safety net of not penalizing districts for falling below the 10-student ADM minimum while the pilot program is in place. Co-Chair Harris asked if a school would close if its enrollment dropped below ten students. Mr. Jeans replied that the current Foundation Formula statute provides for adding fewer than 10 students in a community to the smallest community in the district because the revenue drops so low that it forces the district to close the school. Co-Chair Harris asked if this was part of the Molly Hootch case. Mr. Jeans clarified that it was actually part of SB 36 in which the Legislature set a new threshold minimum of 10 students for a separate site. Co-Chair Harris asked if the boarding schools such as Mt. Edgecumbe are funded by the ADM like the other State schools. Mr. Jeans affirmed. Co-Chair Harris asked if the boarding schools would receive funding from the Department of Education. Mr. Jeans replied that they receive educational dollars for the children enrolled in their school. Co-Chair Harris asked if a boarding school receives extra money for the residence. Mr. Jeans reiterated that it is only in the instance of serving children who lack daily access to a secondary school in their community. In response to a question by Co-Chair Harris, Mr. Jeans affirmed that Nenana has a school with a current enrollment of 138 students, but the enrollment is declining. The space could handle up to 400 students. Mr. Jeans said that Nenana would not qualify for the boarding home stipend under the current regulation because it provides daily access to a secondary school. He clarified that this bill would expand the boarding home program for a five-year pilot, and allow the Department to reimburse the boarding home stipend for all of the kids attending the Nenana boarding school. In response to a question by Co-Chair Harris, Mr. Jeans clarified that the round-trip transportation costs and a monthly stipend would be paid for the boarding school students. Co-Chair Harris questioned if the bill's purpose is to gain more support for independent boarding schools or regional schools. Mr. Jeans did not regard it as the Department of Education advocating for additional boarding schools; instead, it would offer students choices that they currently don't have in their own communities. Unlike Mt. Edgecumbe, the State does not operate the schools in Bethel, Nenana or Galena, which are operated by the independent school districts. Representative Chenault asked about the analysis by the Nenana Student Living Center (copy on file). Mr. Jeans explained that if it is a smaller school, the State pays a higher instructional cost per child, so the analysis attempts to show the savings to the State through the foundation program of including these kids in a larger population. In response to a question by Representative Chenault regarding the figures used in the student allocation, Mr. Jeans clarified that the Nenana number includes the boarding school kids rather than the district that the kids came from. Mr. Jeans pointed out that the current program is in regulation and this legislation would expand opportunities for the kids. The Nenana program has an academic focus, while the Galena program is more vocational in focus and kids can gain certification and enter the workforce later on. Vice-Chair Meyer asked if boarding schools are similar to charter schools. Mr. Jeans stated that charter school legislation doesn't allow for spending State money on boarding home programs. Vice-Chair Meyer asked if the boarding schools are required to do exit exams and meet the No Child Left Behind requirements. Mr. Jeans affirmed. Representative Foster asked who currently pays the students' transportation costs. Representative Coghill replied that the parents do. RALPH LINDQUIST, DEAN OF STUDENTS, NENANA STUDENT LIVING CENTER (NSLC), VIA TELECONFERENCE, NENANA, stated that passage of HB 425 is essential to the survival of the NSLC next year. The NSLC is processing over 150 applications for the 30-35 beds that will be available next year. MORGAN DUGGERT, STUDENT, NENANA STUDENT LIVING CENTER, VIA TELECONFERENCE, NENANA, stated that the Living Center has improved the number and quality of classes that are offered. She has received scholarship money for college. AFTON BRINKMAN, STUDENT, NENANA STUDENT LIVING CENTER, VIA TELECONFERENCE, NENANA, explained that he moved from Eagle to Nenana two years ago, which has improved his life. He will be graduating in May. He expressed that he would not have the range of class choices or the opportunities for scholarships back in Eagle. Mr. Lindquist clarified that kids live at the NSLC but go to school in Nenana. JIM SMITH, SUPERINTENDENT, GALENA CITY SCHOOLS, stated that he'd been in Galena five years and the school is seven years old. He discussed the residential school program, noting that the boarding school provides 27 jobs for the community with the potential for 100 kids, and it operated with 85 students this year. The scholastic program is successful, with 72% of seniors passing all three portions of the graduation test. Alaska Natives comprise ninety-four percent of the student body. He felt that the strong point is the provision of vocational training. He described the programs, which are voluntary. Representative Joule commented on the evolution of education in the state, from Native and Non-Native after the eighth grade to the current integration of schools. The State is looking for solutions to its challenges in education, and he anticipates an integrated K-14. Co-Chair Harris referred to the large fiscal note, and stated that the Co-Chair would like to hold the bill over. Representative Joule asked if the Administration supports the legislation. Mr. Jeans replied that the State Board hasn't reviewed it yet. Representative Coghill spoke in support of the fiscal note, and the impact of the funding on "these three communities that have been carrying the weight." He argued for the significant college preparatory work that the three boarding schools offer to students. HB 425 was heard and HELD in Committee for further consideration.