SENATE BILL NO. 102 "An Act relating to funding for Internet services for school districts; and relating to the Alaska higher education investment fund." SENATE BILL NO. 103 "An Act establishing the Alaska education innovation grant program; eliminating the Alaska education grant program and the Alaska performance scholarship program; redesignating the Alaska higher education investment fund as the Alaska education innovation grant fund; and providing for an effective date." SENATE BILL NO. 104 "An Act relating to the duties of the state Board of Education and Early Development; and relating to school curriculum." 1:45:03 PM BRITTANY HUTCHISON, STAFF, SENATOR ANNA MACKINNON, offered an overview about why the suite of bills were being introduced. She asserted that SB 102, 103, and 104 had been crafted out of the need for major improvements in Alaska's educational system. She said that the needs addressed in the legislation were threefold: the prioritization of K-12 education as a constitutional responsibility, the improvement of outcomes for Alaskan students, and providing for efficient and streamlined delivery of education processes and procedures. 2:45:57 PM Ms. Hutchison offered a sponsor statement for the bill: The goal of this bill is to help provide Alaskan students with better outcomes through new innovative new educational delivery methods and by providing a fund that will allow school districts to apply to the Department of Education and Early Development (DEED) for innovative education grants. We need to prioritize K-12 investment to make sure that our students are prepared for life after high school. Since 2011 when APS was created, 47,907 students have graduated from high school in Alaska, only 8,606 of them received the APS. The total payout to the approximately 18% of high school graduates was $48.8 million. Of the recipients, 26% currently need remediation when they enter college. The APS is not achieving the results we had hoped for. SB 103 will phase out the Alaska Performance Scholarship and the Alaska Education Grant over the next 4 years. · Seniors in high school now - will receive 4 years of scholarship · Freshman in College now - will receive 3 more years of scholarship · Sophomore in College now - will receive 2 more years of scholarship · Junior in College now - will receive 1 more year of scholarship The high school graduating class of 2017 will be the last class to receive these awards. We must prioritize K-12 investment and provide Alaskan students with a valuable 21st century education. In doing so, SB 103 will rename the Higher Education Fund to, "The Alaska Innovation Education Grant Fund." This Fund's purpose is to provide school districts with grants to fulfill academically innovative ways of delivering education, such as coursework through a combination of technologies, pilot programs for cutting-edge learning resources, and changes in the way students and teachers interact in the classroom, to name a few. These grants must be approved by the Commissioner of Education and be submitted to the legislature for funding. I urge your support for this legislation. 2:48:28 PM Ms. Hutchison reviewed the Sectional Analysis (copy on file): Section 1: AS 14.03  Adds a new section, AS 14.03.128, that establishes the Alaska Education Innovation Grant Fund. School Districts may request a grant under this section for the support of innovative education ideas. The Commissioner of the Department of Education and Early Development (DEED) shall determine annually the amount requested for grants and submit them in their budget for legislative approval. Section 2: AS 14.42.030(e) Removes the Alaska Education Grant from state statute. The Alaska Education Grant is in AS 14.43.400 - AS 14.43.420. Section 3: AS 14.43.810(a)  Makes the high school graduating class of 2017, the last high school class to receive the Alaska Performance Scholarship (APS). Section 4: AS 14.43.820(a) Allows the commission to award an APS to a student no later than July 1, 2017. Section 5: AS 14.43.915(a)  Makes the APS and the Alaska Education Grant (AEG) available to students for four years and does not allow a student's eligibility to go past the 2020-2021 academic year. Section 6: AS 14.43.915(a)  Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". This section deals with money going from the fund to the Alaska Education Grant fund. This section is repealed Feb. 1, 2021. Section 7: AS 14.43.915(b)  Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". This section deals with money going from the fund to the Alaska Performance Scholarship award account. This section is repealed Feb. 1, 2021. Section 8: AS 14.43.915(c)  Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". This section deals with the allocation of monies from the fund. This section is repealed Feb. 1, 2021. Section 9: AS 14.45.130(a)  This section deals with eligibility of students from a private or religious school receiving the APS. It is repealed Feb. 1, 2021. Section 10: AS 37.14.750(a)  Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". This section establishes the purpose of the fund, which is "making grants to school districts to support the Alaska Education Innovation Grant Program." Section 11: AS 37.14.750(a)  Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". This section establishes the purpose of the fund, which is "making grants to school districts to support the Alaska Education Innovation Grant Program." This section also removes the language that allows payments from the fund to go to scholarships to postsecondary institutions. This section is repealed in Feb. 1, 2021. Section 12: AS 37.14.750(d)  Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant".   Section 13: AS 43.20.014(a)  Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". Section 14: AS 43.55.019(a)  Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". Section 15: AS 43.56.018(a)  Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". Section 16: AS 43.65.018(a)  Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". Section 17: AS 43.75.018(a)  Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". Section 18: AS 43.77.045(a)  Conforming Language to change the name of the fund from "Alaska Higher Education Investment" to the "Alaska Education Innovation Grant". Section 19: AS 14.03.113  AS 14.03.113, "District's determination of scholarship eligibility" is repealed July 1, 2017. Section 20  Repeals the following sections on Feb. 1, 2021. Article 8: Alaska Education Grant Program - AS 14.43.400 - Purpose; creation - AS 14.43.405 - Administration - AS 14.43.406 - Applicability of other laws - AS 14.43.415 - Eligibility; priority - AS 14.43.420 - Limitation on grants Article 12: Alaska Performance Scholarship Program - AS 14.43.810 - Alaska performance scholarship program established; regulations - AS 14.43.820 - Alaska performance scholarship program; eligibility - AS 14.43.825 - Maximum annual awards - AS 14.43.830 - Qualified postsecondary institutions - AS 14,43.840 - Report to the Legislature - AS 14.43.849 - Definitions Article 13 General Provisions - AS 14.43.915 - Alaska education grant account and Alaska performance scholarship award account Article 9: Alaska Higher Education Investment Fund - AS 37.14.750(c) - As soon as is practicable after July 1 of each year, the commissioner of revenue shall determine the market value of the fund established in this section on June 30 for the immediately preceding fiscal year. The commissioner shall identify seven percent of that amount as available for appropriation as follows: (1) one-third for the grant account established under AS 14.43.915(a), from which the Alaska Commission on Postsecondary Education may award grants; and (2) two-thirds for the scholarship account established under AS 14.43.915(b), from which the Alaska Commission on Postsecondary Education may award scholarships. Section 21: Applicability Section  The Alaska Commission on Postsecondary Education may only award an APS to a new applicant if they are determined eligible by their school district and reported as eligible to DEED on or before July 1, 2017. Section 22: Transition  The Departments of: Education and Early Development, Labor and Workforce Development and the Alaska Commission on Postsecondary Education may adopt regulations to implement necessary changes made by this act. The regulations may only take effect after the law is implemented. Section 23: Retroactivity  If Sections 3-5 and 19 of this Act take effect after July 1, 2017, then sections 3-5 and 19 of this act are retroactive to July 1, 2017. Section 24: Effective Dates Sections 2, 9, and 11 take effect Feb. 1, 2021. Section 25: Effective Date Except for Sections 2, 9, and 11, this act takes effect immediately. Section 23: Retroactivity  If Sections 3-5 and 19 of this Act take effect after July 1, 2017, then sections 3-5 and 19 of this act are retroactive to July 1, 2017. Section 24: Effective Dates  Sections 2, 9, and 11 take effect Feb. 1, 2021. Section 25: Effective Date  Except for Sections 2, 9, and 11, this act takes effect immediately. 2:50:52 PM Co-Chair MacKinnon OPENED public testimony. ARLENE RONDA, SELF, HOMER (via teleconference), testified in opposition to the legislation. She said that she was opposed to any provision that would give a tax credit to individuals, businesses, property owners, or any other entity that could claim a tax credit for a donation. She asserted that well-funded public schools were essential for a civil society. She was opposed to the tax credit section of the legislation. 2:53:16 PM AT EASE 2:53:45 PM RECONVENED Co-Chair MacKinnon explained that the bill would not alter or repeal anything in relation to tax credits. She stressed that the tax credits mentioned in the legislation already existed in state statute and were not being repealed or changed. Ms. Ronda was surprised that the credit had been in statute all along. She maintained her concerned that tax credits were going toward anything that was not a public institution. Co-Chair MacKinnon explained how the tax credits worked in relation to the Higher Education Fund. 2:55:41 PM SAICHI OBA, UNIVERSITY OF ALASKA, FAIRBANKS (via teleconference), testified in strong opposition to the bill. He supported the continuation of the Alaska Performance Scholarship. He said that the University opposed the use of funds, identified for APS, to be used for other purposes. He said that APS encouraged students to take rigorous courses, and that recipients took fewer remedial courses than non-recipients. He ruminated on the positive educational aspects of the scholarship. He believed that the greatest challenge facing Alaska was students choosing not to continue to any post-secondary program, which the loss of APS would only exacerbate. 2:58:28 PM STEPHANIE BUTLER, ALASKA COMMISSION ON POSTSECONDARY EDUCATION, JUNEAU, testified in opposition to the bill. She said that the APS was an existing resource that had an extraordinary reach; students and the state benefitted greatly from the program. She listed the various ways in which the APS benefitted the state. She noted that the scholarship provided a pathway to higher education for lower income Alaskans. She noted that many APS recipients are the first members of their families to attend college. She related that the APS was a positive force in addressing Alaska's education and workforce crisis, and the impact was growing. She relayed that the program encouraged all students to aim higher academically. 3:02:11 PM SCOTT MACMANUS, SUPERINTENDENT, ALASKA GATEWAY SCHOOL DISTRICT, TOK, spoke in opposition to the bill. He testified that he supported innovation in education, but not at the expense of the APS. He supported the education commissioner's "Alaska Challenge," which he believed would create an innovative, systemic, long-term solution to Alaska education. He lamented all of the positions that his district was going to lose under the proposed 5 percent cut to education. 3:04:38 PM KEVIN SHIPLEY, KAKE CITY SCHOOLS, KAKE, testified in opposition to SB 103. He stressed that the APS had resulted in students taking more academically rigorous classes. He said that the APS had been a driver in raising the bar for students to challenge themselves academically. He shared that the APS had allowed for innovation in schools because educators had to figure out how to offer the required courses to students. Co-Chair MacKinnon asked whether the Kake school board adopted curriculum. Mr. Shipley replied that the school board had adjusted and adopted curriculum, and he lamented that the curriculum was largely driven by textbooks. Co-Chair MacKinnon asked if the local school board set the parameters for education qualifications. Mr. Shipley replied in the affirmative. 3:07:35 PM Senator von Imhof asked whether the school district offered information on various scholarships to seniors. Mr. Shipley replied that the district had a college and career counselor, paid for by a grant, and that students were constantly seeking additional ways to fund their higher education. He said that the counselor was funded for the next three years through a federal grant. Senator von Imhof asked how many seniors lived in the district. Mr. Shipley replied that he had 5 seniors in his district. 3:08:52 PM TONY HABRA, HAINES BOROUGH SCHOOLS, HAINES, testified in opposition to the bill. He shared that his daughter would be receiving the APS in 2017. He said that the APS would allow her to receive her degree and stay in Alaska after graduation. He believed that she was representative of many students that received the scholarship. He echoed previous testimony about the APS benefitting lower-income student who may be the first in their family to attend college. 3:11:00 PM TIM BAUER, SUPERINTENDENT, ANNETTE ISLAND SCHOOL DISTRICT, METLAKATLA, testified in opposition to the bill. He echoed the comments of the previous speaker. He asserted that the scholarships provided hope and possibilities for Alaskan students. He relayed that the chance at an APS was used to bolster motivation for engagement by students; the idea that there would be a reward for hard work resulted in students success. He passionately defended the retention of the APS. Co-Chair MacKinnon asked whether Mr. Bauer's students qualified for other University grants. Mr. Bauer answered in the affirmative. 3:13:28 PM JOHN CONWELL, SUPERINTENDENT, UNALASKA CITY SCHOOL DISTRICT, UNALASKA, spoke against the bill. He remembered that the original legislation that established the scholarship had been signed on campus by then Governor Parnell. He believed that the program especially served his diverse district well, and he praised the innovative nature of the program. He shared that the scholarship was often a "safety net" for students seeking financial aid. He thought that recipients of the scholarship were more likely to stay in Alaska for their postsecondary education. 3:17:17 PM LORA JORGENSEN, SELF, JUNEAU, testified in opposition to the bill. She discussed the benefits of the program that extended beyond recipients of the scholarships. She shared that her son was a recipient of APS. 3:19:54 PM HOLLY HOLMAN, UNALASKA CITY SCHOOL DISTRICT, UNALASKA, testified against the bill. She relayed that her child had applied for the scholarship and had decided to go to school in Fairbanks. She said that students in Unalaska were working extra hard in order to qualify for APS, and that these students wanted to go to college and then make a life in Alaska. She believed that the scholarship was an investment in the future. 3:22:05 PM MAXIMILIAN ERICKSON, SELF, FAIRBANKS (via teleconference), spoke in opposition to the bill. He voiced strong support for APS. 3:23:41 PM GRETCHYN O'DONNELL, SELF, JUNEAU (via teleconference), testified in opposition to the bill. She shared that she was a first generation college student in her family. She relayed that the APS became available her sophomore year of high school. She believed that investment in students through the APS gave students hope that their dreams could be achieved. She said that she would not have been able to attend college without the APS. 3:26:16 PM PETE HOEPFNER, CORDOVA SCHOOL DISTRICT, CORDOVA (via teleconference), testified in opposition to the bill. He spoke of the increased academic rigor in his district due to the APS. He said that many students had planned on using the scholarship to go to college. He worried that only having grants available would pit districts against each other because some would be better at grant writing than others. He did not think that districts should compete with each other for funding. He felt that the additional administrative costs of crafting the innovative grants would add more work to the already full plate of the reduced personnel at the Department of Education and Early Childhood Development. 3:28:48 PM JOE NELSON, UNIVERSITY OF ALASKA SOUTHEAST, JUNEAU, spoke in opposition to the bill. He echoed the comments of previous testifiers. He expressed understanding for the fiscal situation in the state. He felt that the scholarship was impacting systemic change and helping to change the culture of education district-by-district. He noted that districts were initially challenged by the requirements of the APS, but that the idea had been proved to be thoughtful and innovative, as it tied the scholarship to the curriculum, standardized test scores, the G.P.A, and took a three tiered approach to qualifying levels. Co-Chair MacKinnon believed that of the 5 percent of students that applied for the grant and received it, only 5 percent of the student graduated in 6 years' time. Mr. Nelson agreed that the issue of persistence should be addressed. He thought that graduation rates could be improved. Co-Chair MacKinnon restated that 5 percent of all Alaska high school freshmen would graduate from college within 6 years. She noted that the statistic was farther reaching than just the scholarship. She wondered whether the dollars were being used to the greatest benefit through the APS. 3:33:33 PM ALYSE GALVIN, SELF, JUNEAU, spoke in opposition to the bill. She believed that the scholarship served students who may not have believed that they could ever attend college. 3:36:29 PM JACK WALSH, SUPERINTENDENT, CRAIG SCHOOL DISTRICT, CRAIG, testified in opposition to SB 103. He recognized that there was a need for innovation in education. He believed that eliminating the scholarship would be harmful to the state overall. He felt that the legislature could craft a fiscal plan while maintaining the scholarship. 3:39:12 PM Senator Micciche asked how Mr. Walsh made the connection of K-12 education and the APS part of his mission. Mr. Walsh responded that scholarships in education provided hope and opportunity to Alaskan students and could lead people out of poverty and into successful livelihoods. He believed that not only K-12 education needed to be encouraged, but also postsecondary education. He felt that education should not end with the 12th grade, and that all of the research stated that postsecondary education was necessary in the future. 3:42:04 PM TIM PARKER, NEA ALASKA, JUNEAU, spoke in opposition to the bill. He believed in innovation in K-12 education, and he stressed that every good teacher in the state was innovating on a regular basis. He said that 2 out of 3 students needed financial aid in order to attend college and that the APS was needed by those students. 3:44:28 PM BRENDA TAYLOR, GREAT ALASKA SCHOOLS, JUNEAU, testified in opposition to the bill. She said that she had initially be against the APS because of the pressure that it placed on school districts to meet the scholarship requirements for class offerings. She said that her mind had been changed and she had realized that the advanced rigor had resulted in students working harder toward the goal of postsecondary education. She said that college counselors at Juneau Douglas High School had been cut, which had resulted in students having less guidance when seeking resources and financial aid for college. 3:47:36 PM KATHY TODD, SELF, VALDEZ (via teleconference), spoke in opposition to the bill. She believed that the APS had proved successful in her district in motivating kids to take more academic classes, and in raising grade point averages. She said that the scholarship had provided much needed funding for financial aid. She added that the scholarship fed the University budget while helping Alaskan students. She believed that the APS was an innovative way to change school culture for the better and give more students a range of postgraduate educational opportunities. 3:51:01 PM SUSAN NIMAN, SELF, VALDEZ (via teleconference), testified in opposition to the bill. She thought that taking away money from a group that did not have the power to vote was unfair. She felt that education funding should take priority over funding juvenile detention centers. She echoed the points made by previous testifiers. 3:52:39 PM MIKE COONS, SELF, PALMER (via teleconference), spoke in support of the bill. 3:55:46 PM TODD SMOLDON, SELF, WILLOW (via teleconference), testified in support the bill. 3:58:15 PM Co-Chair MacKinnon CLOSED public testimony. Co-Chair MacKinnon specified that amendments for SB 103 were due by 5pm, Tuesday, April 11, 2017. Ms. Stephanie Butler, Executive Director, Alaska Commission on Postsecondary Education, Department of Education and Early Development offered to provide further information that supported not eliminating the APS program. Co-Chair MacKinnon reminded the committee and the public that Alaska was facing a fiscal crisis. She explained that a direct draw from the earnings reserve account (ERA) would jeopardize the Alaska Permanent Fund Dividend. She stressed that it was critical to examine important issues in order to address the current budget shortfall. SB 103 was HEARD and HELD in committee for further consideration. Co-Chair MacKinnon discussed housekeeping.