SB 113-REAA FUND: MT. EDGECUMBE, TEACHER HOUSING  3:33:53 PM CHAIR TOBIN announced the consideration of SENATE BILL NO. 113 "An Act relating to the regional educational attendance area and small municipal school district fund; relating to Mt. Edgecumbe High School; and relating to teacher housing." 3:34:12 PM TIM GRUSSENDORF, Staff, Senator Lyman Hoffman, Alaska State Legislature, Juneau, Alaska, said SB 113 proposes equalizing construction and maintenance funding opportunities for Mt. Edgecumbe High School and making changes to all maintenance grants for rural teacher housing. He said the discussion on these changes arose during a Senate Finance Committee meeting where the Department of Education discussed major maintenance, deferred maintenance, and construction projects. He said the issue of who brings forward projects to be funded by the legislature was raised during the discussion because, currently, Mt. Edgecumbe must rely on the executive branch to request funding directly from the legislature. Mt. Edgecumbe cannot submit requests for projects to be put on the major maintenance list as other school districts can. He compared this to the legislature's responsibility to advocate for the unorganized borough. He noted that the legislature does not often collectively prioritize unorganized areas due to the many other issues they have to address. Similarly, Mt. Edgecumbe is a place that sometimes falls through the cracks despite people looking out for it. SB 113 would address these issues and provide more equitable funding opportunities. 3:36:40 PM MR. GRUSSENDORF read the following sectional analysis for SB 113: [Original punctuation provided.] SB 113: related to REAA fund, Mt. Edgecumbe High  School, and Teacher Housing  Section 1: amends language to AS 14.11.025(A) that provides the Department of Education and Early Development the authority to make disbursements from the REAA fund to provide grants. Adds Mt. Edgecumbe to the eligibility list for school construction and major maintenance grants. Adds projects for housing that is located and owned by the state, or a regional education attendance area, or a small municipal school district, and that is provided to teachers working in the educational attendance area or the small municipal school district. Section 2: amends language to AS 14.11.030(a) that adds Mt. Edgecumbe High School to the eligibility list for school construction and major maintenance projects; and adds teacher housing to the eligibility list for major maintenance for funding from the REAA fund. Section 3: deletes language that the unobligated and unexpended cash balance of the fund may not exceed $70,000,000. 3:37:53 PM SENATOR STEVENS said he knows there is a tremendous need for rural housing in Alaska. He asked about the use of funding. 3:38:11 PM MR. GRUSSENDORF replied that the funding would primarily address the major maintenance issues of existing teacher housing, not the construction of new housing. The foremost purpose of the fund is school construction. Maintenance would be secondary if there were money remaining. School construction is the fund's purpose, but the department would place maintenance and teacher housing on equal footing if sufficient money remained. 3:38:52 PM SENATOR KIEHL said the concept is excellent, and he appreciates the optimism in Section 3. He asked whether the department would rank Mt. Edgecumbe projects alongside REAA projects on the priority list. MR. GRUSSENDORF replied that was his understanding. SENATOR KIEHL asked whether the department would need instruction on when to apply. He opined that it is a bit weird because different sections of the department run Mt. Edgecumbe and the list. MR. GRUSSENDORF replied that he did not know the answer to the question. 3:39:55 PM CHAIR TOBIN suggested asking department staff the question when they testify on the fiscal notes. 3:40:03 PM SENATOR KIEHL said AHFC retains the ability to assist with teacher housing. He echoed the Senate Steven's recognition of Alaska's substantial unmet rural housing needs, emphasizing the importance of construction and maintenance. He stated that the language on page 2, line 12, remained unchanged. He asked about the sponsor's preferences for prioritizing major maintenance and teacher housing alongside school maintenance projects. MR. GRUSSENDORF stated that in past discussions, members of the Senate Finance Committee expressed their preference to rank teacher housing maintenance projects alongside major maintenance needs. If warranted, a project could rise to first on the maintenance list. 3:41:38 PM SENATOR STEVENS said he would like to hear from the Department of Education and Early Development (DEED) about the two positions listed in the fiscal notes. 3:41:53 PM CHAIR TOBIN invited the DEED representatives to review the fiscal notes for SB 113. 3:42:17 PM LACEY SANDERS, Deputy Commissioner, Department of Education and Early Development (DEED), Juneau, Alaska, said the fiscal note for SB 113, OMB 2737, addressed School Finance and Facilities. DEED would need two new permanent full-time positions: School Finance Specialist II and Building Management Specialist. She said DEED lacks expertise in teacher housing and dwelling, and the Capital Improvement Project process would expand to include Mt. Edgecumbe High School, necessitating hiring knowledgeable individuals. These individuals would travel twice a year, either to rural locations throughout the state or Mt. Edgecumbe High School. The fiscal note encompasses one-time setup and annual rate costs for the new positions. Additionally, it allocates $6,000 as a placeholder for legal expenses associated with revising and establishing regulations. SB 113 would entail extensive regulatory modification to encompass teacher housing and the addition of Mt. Edgecumbe High School. 3:44:23 PM SENATOR STEVENS said he finds the positions to be excessive. He questioned the purpose and cost of the positions by asking exactly what the individuals in these roles are overseeing, how much money is involved, and why it costs nearly $300,000 for two people to perform the work. 3:44:57 PM HEIDI TESHNER, Acting Commissioner, Department of Education and Early Development (DEED), Juneau, Alaska, replied that Mt. Edgecumbe High School lacks staff members capable of handling their applications in the Capital Improvement Program (CIP) process. While Mt. Edgecumbe has some facilities maintenance personnel, they focus on day-to-day tasks. This new position would oversee all ongoing and future projects. She said she did not recall the exact number of current projects. She emphasized that this role would be full-time, managing all projects at Mt. Edgecumbe High School, and the additional person would provide expertise related to teacher housing and dwellings, particularly in terms of necessary specifications. 3:45:56 PM SENATOR KIEHL asked if both positions would advocate for Mt. Edgecumbe projects and evaluate ranking compared to projects from other locations. ACTING COMMISSIONER TESHNER responded by explaining that the proposed position would not have the responsibility of ranking projects; instead, the individual would focus on submitting applications for Mount Edgecumbe. She said an existing three- person team handles the ranking of all projects that are submitted. She clarified that the new position could not be involved in the ranking process due to the department's inability to apply for a district. Therefore, a neutral individual would be needed to help Mt. Edgecumbe apply. 3:46:55 PM CHAIR TOBIN opened public testimony on SB 113; finding none, she closed public testimony. 3:47:15 PM At ease. 3:47:27 PM CHAIR TOBIN reconvened the meeting. 3:47:34 PM SENATOR STEVENS moved to report SB 113, work order 33-LS0449\A, from committee with individual recommendations and attached fiscal note(s). 3:47:46 PM CHAIR TOBIN found no objection and SB 113 was reported from the Senate Education Standing Committee.