HB 312-SUPP. PUBLIC SCHOOL FUNDING/YOUTH ACADEMY  RANDY RUARO, legislative staff to Representative William K. William, introduced the legislation. Eddy Jeans was available to answer questions on the fiscal notes and Representative Gretchen Guess was available to answer questions on funding for the Alaska Challenge Youth Academy. He said he would address Sections 1 and 3 of the bill that have the affect of suspending, for the fiscal year FY 03, the erosion of the supplemental funding floor that was created by SB 36. The reason for the one year suspension is that by next January, the Legislature should have received a new study of school district cost factors. It is anticipated that the study would provide Legislators with a base of information upon which to make decisions on school funding for FY 04. Section 3 makes it clear that the suspension of the erosion for FY 03 does not affect the funding reductions that have already been made in FY 00, FY 01 and FY 02. SENATOR LINCOLN wanted to hear from Representative Guess about the Alaska Youth Academy Challenge Program. REPRESENTATIVE GRETCHEN GUESS said she helped create Section 2 of the bill. The Youth Academy Challenge Program is run out of the Division of Military and Veteran's Affairs and is a joint program with the federal government to provide educational and vocational services to at-risk youth. These are youths over the age of 16 who have dropped out of school. Their mornings are spent learning basic reading, writing and computing skills to prepare the youths for their GED testing. Afternoons are spent on vocational activities. It is basically a boot camp for youths and has been very successful. This part of the bill sets up a funding structure. They get a certain number of dollars per student; the federal funding that they receive is subtracted and what is left is the general fund dollar amount that would need to be authorized. They have never been funded per cadet and this sets up the structure based on the number of cadets in the program. SENATOR LINCOLN referred to the fiscal note and asked if the $334,000.00 was general fund dollars. Her second question was whether the Department of Education and Early Development supported that portion of the legislation. REPRESENTATIVE GUESS replied that Nico Bus from the Department of Military and Veteran's Affairs was available to go over the fiscal note, but she thought $349,000.00 would be required in addition to the federal allocation. In response to the second question, she said the Department of Education and Early Development is very supportive of the program and recognizes the importance of providing the program stable funding. This isn't a school, it's a program and therefore belongs in the Department of Military and Veteran's Affairs but the school is very supportive. SENATOR KELLY noted that this is a $65,000.00 increase over the budget because there were some general funds "taken out of both sides." SENATOR LINCOLN said, "65?" SENATOR KELLY replied, "If this budget were to pass. As it sits, the fiscal note is correct, but if the budget were to pass, as is, it would represent about a $65,000.00 increase." SENATOR AUSTERMAN said there were two different fiscal notes from the Department of Education and Early Development, both dated the same day, and he wondered whether Mr. Jeans would come forward and briefly explain them. EDDY JEANS, Finance Manager for the Department of Education, explained there were two fiscal notes because there were two budget components that are affected by the legislation. One is the foundation program that has the $334,000.00 fiscal note and the second component is the schools for the handicapped where the allocation for the Challenge Youth Program will sit in the department's budget. SENATOR AUSTERMAN comment inaudible. SENATOR KELLY question inaudible. MR. JEANS said he wasn't sure what Senator Kelly meant by "reducing the federal funds" but on the cover of the fiscal note for the Challenge Program you could see the calculation for the entitlement for them and from that they subtracted the dollars that are currently allocated to the federal government for that program to come up with the additional state allocation. SENATOR KELLY said you're not actually taking away federal funds; you're using that as your formula. MR. JEANS replied that was correct, it's very similar to the foundation program. They calculate an entitlement then they make adjustments for federal dollars. CHAIRMAN TORGERSON commented this bill was a finance measure and although he didn't think it had much chance for survival, he didn't think it was appropriate to hold it in this committee. He asked for a motion. SENATOR AUSTERMAN made a motion to move HB 312 and attached fiscal notes from committee with individual recommendations. There being no objection, it was so ordered.