HOUSE BILL NO. 180 "An Act relating to the Alaska Challenge Youth Academy; and providing for an effective date." 9:05:42 AM REPRESENTATIVE TAMMIE WILSON, stated that the objective of the Alaska Military Youth Academy was to assist young Alaskans between the ages of 16 and 19, who statistically are headed for a troubled future, to become self-confident, contributing citizens of the state. She shared that the academy offered a 22 week residential program and that upon completion the cadets were involved in a 12 month after- care program to further their education, enter the workforce, or enlist in the military. She said that the academy had graduated 4000 cadets in the last 20 years; the academy graduated approximately 300 cadets per year. She related that the bill would change the name of the Alaska Military Youth Academy and also change the formula program. She explained that the academy currently received 7 times the base student allocation (BSA), but should be funded based on performance. 9:07:27 AM MCHUGH PIERRE, DEPUTY COMMISSIONER, DEPARTMENT OF MILITARY AND VETERANS AFFAIRS (DMVA), related that the department had worked closely with the bill sponsors. He stressed that the academy was one of the best programs in the country. He believed that the legislation would allow the department more planning time with their budget cycle. He related that the current funding formula had been established to allow the division to grow, which it had. He relayed that the division now had the ability to remove the "training wheels" and become more independent. He hoped that the division could work through the full budget process for the coming fiscal year and debate the merits of the program. 9:08:48 AM Vice-Chair Fairclough noted fiscal note 3 from DMVA. She related that the proposed operating funding for FY14 was $11,074,600. Mr. Pierre commented that the note reflected that the bill would have zero impact on the FY14 budget and might not impact FY15. He said that the bill would impact the way the money came to the program. He noted the reduction from the Department of Education and Early Childhood Development (DEED)of approximately $4 million in FY14. He stated that the department would come forward in FY15 to request the appropriation from the general fund. 9:10:19 AM Senator Hoffman wondered where the interagency receipts were being reduced from. Mr. Pierre explained that instead of appropriating money to DEED, the funds would be appropriated directly to DMVA. Senator Hoffman understood that the BSA would not need funding for academy students. Mr. Pierre replied in the affirmative. He furthered that instead of receiving money from the BSA, the department would receive it directly from the general fund. 9:11:06 AM AT EASE 9:11:50 AM RECONVENED Vice-Chair Fairclough noted fiscal note 4 from DEED. She wondered if the department was planning of returning year after year to request the allocation and should the committee be put on notice that there would be a general fund request every year. Mr. Pierre responded that every year the academy would come back and request a certain amount based on the number of cadets expected to graduate. He stated that the program served students who had dropped out of public school and that that number could fluctuate. He said that the program served between 9 and 10 percent of the drop out population. He relayed that the department would address the number of students each year and how much general fund match would be appropriate to fund the student population. Representative Wilson interjected that the academy received the names of drop outs from school superintendents on a yearly basis and that the role of DEED was as a pass through grant. 9:13:41 AM Senator Olson understood that the students at the academy currently received 7 times the BSA. Mr. Pierre explained that the existing formula was 7 times the BSA, times the number of residential students as of October 1; plus .6 times the BSA multiplied by the number of non-residential students as of October 1, minus the federal match. He said the cost was roughly $35,000 per graduated student. 9:14:49 AM Senator Olson noted that roughly 4,000 cadets came through the academy and 70 percent graduated. Mr. Pierre replied that there had been a total of 4,000 graduated in 20 years. He said that the academy had approximately 400 cadets entering the program per year, with roughly 300 graduates. 9:15:56 AM Vice-Chair Fairclough OPENED public testimony. Vice-Chair Fairclough CLOSED public testimony. Senator Bishop MOVED to REPORT HB 180 out of committee with individual recommendations and accompanying fiscal notes. 9:16:38 AM HB 180 was REPORTED out of committee with a "do pass" recommendation and with two previously published fiscal impact notes: FN3(MVA) and FN4(EED). 9:16:40 AM AT EASE 9:19:43 AM RECONVENED