SB 146-UNIVERSITY: TEXTBOOKS/MATERIALS COST  9:28:21 AM CHAIR HOLLAND reconvened the meeting and announced the consideration of SENATE BILL NO. 146 "An Act relating to costs of and charges for textbooks and other course materials required for University of Alaska courses; and providing for an effective date." 9:28:58 AM SENATOR MYERS, District B, Alaska State Legislator, Juneau, Alaska, stated that legislators are unable to change the cost of textbooks by dealing with the publishing industry directly. Instead, SB 146 seeks to provide cost transparency for students so they will know the cost of materials before selecting courses. He provided the sponsor statement as follows: [Original punctuation provided.] For decades a major roadblock to the acquisition of higher education in this country has been costs. Students in Alaska and throughout the United States often find themselves in difficult situations attempting to balance the various costs of higher education such a tuition, room and board, and course materials. For many students cost of material can be a deciding factor in the decision to take a course due to the sometimes-exorbitant prices of required course materials. Students often find themselves as consumers subject to a captive market that has experienced a colossal growth in price over the last several decades. The costly and unique nature of the textbook and course material market has led to many students being forced to "shop around" and attempt to engage the market as informed consumers. The Textbook Cost Transparency Act provides students with vital information about their textbook and course materials while they are registering for classes, allowing them to make informed choices and financially plan. The goal of this legislation is to provide students with as much information regarding cost as early as possible in the registration process with clearly defined definitions integrated into the University of Alaska's shared online course catalog (UAOnline). By allowing students to see which classes come at "zero-cost" or "low-cost" they will be able to make more informed finical decisions more easily. While faculty will remain the paramount deciders of class materials, we believe that by providing students this information we will be building towards a more equitable and cost-effective University System for students at the class level. 9:31:04 AM DAWSON MANN, Staff, Senator Robert Myers, Alaska State Legislature, Juneau, Alaska, read the sectional analysis for SB 146: [Original punctuation provided.] Section 1: Page 1, Lines 4-6 This section establishes that this act may be known as the "Textbook Cost Transparency Act". Section 2: Page 1, Lines 7-14, Page 2, Lines 1-16 This section outlines the information that the University of Alaska must provide in the University systems online course schedule relating to class materials and automatic fees required for the materials. This section provides statute definitions for "course materials", "online course schedule", "zero-cost resources", and "low-cost resources". This section also directs that the universities online course schedule must include search functions to identify courses with only zero-cost materials required. Section 3: Page 2, Line 17 This section establishes an effective date for the bill of July 1st, 2023. 9:32:10 AM SENATOR STEVENS stated that as a former history professor at the University of Alaska, he had experienced frustration with minor textbook changes, such as chapter numbering, that have left students unable to use a sibling's textbook. He stated he does not want to give textbook manufacturers the advantage but asked if there were any drawbacks to SB 146. 9:33:04 AM SENATOR MYERS replied that a couple of organizations at the university helped craft definitions for SB 146. There was flexibility in determining the best way to implement the concept. He stated that invited testimony could share any drawbacks they see in SB 146, but no drawbacks have been specified. SENATOR STEVENS sought verification that the intent of SB 146 is not to interfere with faculty textbook selection or that a textbook could be used for a course university-wide. SENATOR MYERS responded that it is not the intent of SB 146 to tell the faculty which textbooks to use. It only asks that information be released so students can make informed choices in course selection. SENATOR STEVENS expressed concern that SB 146 could have unintended consequences that might disadvantage students. 9:33:47 AM SENATOR BEGICH asked how many states have a bill like SB 146. SENATOR MYERS stated SB 146 was modeled after Maryland legislation passed in 2020. Washington, Oregon, and a few other states have similar legislation. He deferred to Mr. Mann for an exact number and stated that textbook costs have been rising across the country. MR. MANN replied that Maryland, Oregon, and Texas had similar legislation and other states like Louisiana had related statutes. The definition of low-cost material came from Louisiana after conversing with university representatives. 9:35:24 AM SENATOR BEGICH stated he was aware that Maryland had passed a similar bill. Senator Cheryl Kagan, a Maryland colleague, identified that it was Senator Rosapepe's bill. He stated he reached out to Maryland for its equivalent of a fiscal note after seeing that the fiscal note for SB 146 was an outrageous ongoing $822,900. He stated he was shocked that the university had produced a fiscal note showing an ongoing cost of nearly a million dollars following implementation just to tell students the value of a textbook. He read Maryland's fiscal summary, "Once the online scheduling applications have been updated, USM [University of Maryland] institutions can make the information regarding course materials available using existing resources as explained below. Revenues are not materially affected, as effectively a zero fiscal note after the first year of implementation." He asked if the sponsor or university could speak to the fiscal note. 9:36:51 AM SENATOR MYERS responded that he received the fiscal note on Monday. The university did not give specifics but expressed interest in addressing the committee. SENATOR BEGICH stated he would like to hear how the university justified an ongoing expense of nearly $1 million when another state has implemented a similar law with no ongoing cost. 9:37:22 AM SENATOR HUGHES stated she was shocked by the narrative for the fiscal note and found it concerning. It allows one hour per course for faculty or staff to enter the textbook information, and there are 13,671 courses offered. She opined that having been an instructor, entering the data should take five minutes or less. SENATOR BEGICH added that the University of Maryland has over 40,000 students, which is larger than the University of Alaska and offers as many, if not more, courses. 9:38:22 AM CHAIR HOLLAND opened invited testimony on SB 146. 9:38:54 AM At ease. 9:39:25 AM CHAIR HOLLAND reconvened the meeting and resumed invited testimony on SB 146. 9:39:48 AM SARA PERMAN, State Government Relations Manager, University of Alaska, Anchorage, Alaska, stated that the university's priority is to educate Alaskans and expand the Alaskan workforce. Education must be as accessible and affordable as possible to accomplish this. Having costs available upfront for students has value because it eliminates surprises. The university has taken several measures to make cost transparency accessible to students by creating a list of textbooks and course materials so they can know the cost before taking a course. UAA has a zero-cost textbook program (ZCT). It can purchase books, and students can access the materials free through licensing with the Alaska Consortium Library. The university's online bookstore lists the materials needed for a course and the cost. This summer, zero textbook courses will be marked in the scheduling platform and the registration course catalog. UAF has material costs, course fees, and registration fees listed on its online bookstore for students to view before registering. The online course catalog has a search option for no-cost or low- cost courses. UAS's open initiative brought forward by faculty and students in 2016 says they would like textbook transparency and lower costs. In 2021 almost 30 percent of courses used no- cost materials. A no-cost marker to flag no-cost materials is being developed for online registration. 9:43:13 AM MS. PERMAN stated that regarding the fiscal note, the university flagged areas of SB 146 that it found concerning. There are two portions of pricing, upfront capital cost and an ongoing component. The initial component of $397,500 is to update the university's information technology system so it can align with SB 146. The system is from the early 90s. It is an extensive background system that is old and tough to navigate. Many online components cannot be utilized because the system contains student registration, financial fees, employee costs, and other private information. A capital request for $20 million has been made to help upgrade the system because presently it is onerous to update. Obtaining the capacity to store course information and material lists requires the Office of Information Technology to design, develop, test, and implement the capabilities described in the legislation. This includes building new integrations with multiple third-party software vendors and refactoring the course catalog to support differentiation between materials for the same course catalog. The university has 13,671 courses. Instructors can choose the materials they want even when a class is duplicative. Entering all the pieces into the system will require third-party software and internal staff hours. 9:45:27 AM rd MS. PERMAN said the estimate for 3 party contractors would charge $200 per hour for 1500 hours. Internal staff to rebuild the system would be $65 per hour at 1500 hours. This is how $397,500 was determined for the front-end work of the university's banner system. 9:45:51 AM MS. PERMAN said that in addressing the ongoing cost component the university recognized that some professors would know the course materials needed, the costs, and how to enter the information quickly. However, some courses, like those high in software components, would be more difficult for instructors to track down. So, while it may take some instructors five minutes, others may take more than an hour. Therefore, one hour per course at $60 per hour was used to reach $822,900, including a $2,600 component from information technology to maintain the more extensive banner system. MS. PERMAN relayed that during yesterday's board of regents meeting, the coalition of student leaders was encouraged by efforts to provide cost transparency in course materials across all university systems. It is an effort the board of regents is very interested in and would like to see continued. The university also wants it but does not want to take money away from education programs to cover administrative costs. 9:47:59 AM SENATOR BEGICH stated the university is already going through a process to make costs more transparent. It can be done under the current budget without a fiscal note for SB 146. He opined that the fiscal note implies the university does not support SB 146. He suggested the vice chancellor speak about this and why the university might not support SB 146. He mentioned Ms. Perman describing a process designed to keep the cost of transparency ongoing. He asked whether this cost was in the budget and, if so, to identify it. He supports the university's $20 million request to upgrade its computer system and asked why funds for cost transparency could not be included in that capital request since it is not yet funded or implemented. He stated he is not satisfied that the fiscal note is fair. Whether in the minority or the majority, legislators rely on departments to provide accurate fiscal notes. It is critical. He gave an anecdotal example of finding $4 million in inflated Medicaid Reform fiscal notes. He stated that the description of what the fiscal note entails was substantial, but the numbers were unsatisfactory. 9:50:48 AM At ease. 9:51:14 AM CHAIR HOLLAND reconvened the meeting. 9:51:33 AM MICHAEL CIRI, Vice Chancellor for Administration and Director of Information Technology, University of Alaska Southeast, Juneau, Alaska, stated he is essentially the chief financial and chief information officer at the University of Alaska Southeast (UAS). He said he takes primary responsibility for the fiscal note and would be transparent in disclosing the degree to which costs were known when creating it. He declared his support for the goals in SB 146. He has led a team on course scheduling at UAS for 20 years with a specific goal to make course costs accurate, itemized, and available at the time of registration. He stated his belief that this goal is shared across the university system, and he is passionate about it. However, it is more difficult to achieve than it seems. 9:53:54 AM MR. CIRI said he began his career in information technology (IT) and considers it a responsibility to be clear about costs and risks. IT projects tend to become far more expensive than necessary, and cost overruns are typical. Therefore, he tries to ascertain how costs might escalate. He said he would like the goals of cost transparency to be accomplished within the student modernization project. However, no funding for that project has been received, and the effective date of SB 146 begins long before the student modernization project would be completed. Therefore, the fiscal note for SB 146 assumed there would be no funding from the modernization project. He agreed that the modernization of UAS's Student Information (SI) System would help solve cost transparency obstacles and other issues that students face. UAS's information system does not have the ability to store the data needed to achieve cost transparency. A contract with the current vendor would be necessary to learn how to modify the system to store the data. Federal regulation requires that textbook costs be visible to students. This is achieved through the bookstore systems at the time of registration. There is currently no way to integrate the workload entered into the bookstore systems with the course schedule found in the SI system. 9:56:29 AM MR. CIRI stated he takes responsibility for the one-hour cost estimate for faculty to enter the textbook and materials data. The estimate was not just for faculty time but included the cost for the help desk and staff to resolve technical and compliance issues that faculty encounter. The methodology for moving the needle on textbook cost transparency has been to educate faculty. SB 146 would create a need for staff to engage and ensure new and adjunct faculty fulfill their compliance obligations. He reiterated that one hour represented faculty and other staff involvement. He further noted that there is no system in place for textbook cost transparency, so the workload for faculty members is unknown. 9:58:29 AM MR. CIRI stated he has worked for the university for 40 years, and reducing student costs is very important, but he has concerns about unintended consequences from SB 146. He asked whether the university would be considered out of compliance if course materials changed between the time a schedule was posted and a course began. He asked whether SB 146 would discourage faculty from practicing continuous improvement. Faculty would need to post resource decisions eight months before the start of a semester. For example, in the fall semester, resources would need to be posted by the end of the preceding fall semester. He asked for clarification on how adjunct faculty would be handled when brought in to teach a class after the course schedule has been posted, but a decision on the materials for the course has not been decided. He affirmed that as a director, complying would be a goal. However, a push for strict compliance could create barriers for faculty trying to find low-cost alternatives to the original textbooks they picked before a schedule is posted. He stated his preference is for faculty to make their own choices. 10:00:11 AM SENATOR MICCICHE said he did not want his comments to sound nefarious. However, the university could have done better in reaching out to the sponsor with ideas to improve SB 146 rather than dropping a fiscal note bomb that committee members find unacceptable. He stated that course catalogs are reviewed annually and suggested that each textbook in the system could have a unique identifier. Since prices change, the course catalog could provide an approximate price, while a link to the course materials could provide the actual cost. He suggested that the university speak with the sponsor and determine how to make cost transparency happen. He stated his belief that universities should not be dragged into the nefarious practices of publishing companies. SB 146 will force instructors to consider the textbook's value relative to its cost and benefit to the students. He opined that the effective date for SB 146 could be adjusted until other options became available. He provided three reasons why the university would present an inaccurate fiscal note to the committee: it does not like the bill, wants to justify its capital budget request, or intends to offset budget reductions. He opined that SB 146 does not deserve to be negatively impacted for any of those reasons. He stated that committee members are tired of seeing fiscal notes used as a game. 10:04:07 AM MR. CIRI stated that working with the sponsor of SB 146 would be a welcomed opportunity. He is on the steering committee for SI modernization and is passionate about obtaining it. Some of the suggestions are the types of ideas being contemplated. He said the intent of the fiscal note was as he presented and none other. While there are thousands of faculty members, those he has talked with deeply care about textbook costs. The progress and efforts that were heard have been led by faculty directly involved in reducing textbook costs. He assured the committee that he is committed to working on ways to achieve cost transparency. He stated his concern is with SB 146 itself. He recognizes that the role of the faculty needs to be respected. The gap in cost information is already being made visible by a faculty member through the bookstore system. Finding ways that accomplish the goal of reducing textbook costs and increasing transparency will benefit the university, students, and the state. 10:05:59 AM SENATOR BEGICH stated that he sees the need to upgrade a 1995 computer system. He asked if the upgrade would eliminate most of the costs in the fiscal note. 10:06:37 AM MR. CIRI responded that, as an IT director, he is passionate about automation, and it is offensive that the university cannot integrate systems. Anytime information is entered more than once state money is wasted, which drives up the cost of tuition. Textbook information should only be entered once per course section. That entry should feed into the bookstore and the SI systems. It should be visible in the course schedule and on the course websites published to students. He said that if a system like this were in place, his main concern with SB 146 would be compliance. It would need to be clear whether refining textbook lists would be allowed once a course schedule was posted and registration began. 10:07:59 AM SENATOR BEGICH replied that he appreciated the compliance concern and suggested the sponsor could address it through nuanced language or perhaps in a way managed by another state. He said he would like to meet with the university to review the $20 million capital budget request for a new system and be part of helping to achieve it. 10:08:35 AM CHAIR HOLLAND opened public testimony. 10:09:04 AM JEFFRY CREWS, representing self, Anchorage, Alaska, said he is a US Coast Guard veteran who returned to school after a 20-year hiatus. The cost of textbooks has gone up about 300 percent. His veteran affairs book stipend provides approximately $350 a semester, but it is not always enough. He has paid $75 for an online textbook that he does not get to keep. He is on a fixed salary as a retired veteran. Unexpected expenses take money away from rent and food. Twelve credit hours a month are required for a GI bill housing stipend. He would need to find extra work to afford to attend UAA without it. UAA has a lot of financial objections to SB 146 becoming law. The university says that it is too expensive to upgrade the system, and it is already being transparent. The military uses the same tactic to kill a new or unpopular regulation. Exceptional people drive the ideas that get pushed forward. The ideas fall by the wayside once those people are gone. Course marking will be done for a while and then be replaced or streamlined if left to universities. The people hurt by this are the students. SB 146 asks universities to mark the cost for a class so students can decide if taking the class fits their budget. For example, when taking a psychology class, he signed up for a course that required a $50 textbook. He later learned that a different class offered the same course using a free online textbook. He opined that this difference could impact a student's ability to stay in school or pass a test. He knows of students who felt they had everything needed for a course when they purchased an electronic version of a textbook but later learned they needed a physical textbook for quizzes and the homework system. The university may incur costs to implement SB 146, but the costs will be recouped by having additional students want to sign up for classes they can afford. 10:14:02 AM CHAIR HOLLAND closed public testimony on SB 146.. 10:14:11 AM SENATOR STEVENS stated he knows textbooks are extremely expensive and the cost can discourage students, so finding ways to lower costs should be sought. However, he would like to hear the opinion of the faculty regarding SB 146. He stated his belief that faculty are concerned about textbook costs and the impact on students. He has concerns about unintended consequences. Strict compliance means restrictive lines could deny or discourage professors from choosing cutting-edge material. The student must be the person benefiting. He questioned whether students would be denied the most up-to-date information by selecting only the free material. 10:15:32 AM SENATOR HUGHES stated that the compliance issue could be easily resolved by having a publication date with a note to students that the cost is subject to change and they should check with the bookstore for current pricing. She said she would be willing to work with the sponsor and the university on language to amend SB 146. She agreed that the discussion has been excellent, and there are issues to be worked out. One problem could be resolved by moving the effective date of SB 146 since the university requires a new SI system. 10:16:56 AM MS. PERMAN stated she appreciated the concerns that were brought up. She agreed to work with the sponsor earnestly. The university values textbook cost transparency and will incorporate feedback from the committee. She stated she would work with Senator Begich on the capital budget system request. 10:17:37 AM CHAIR HOLLAND held SB 146 in committee.